Now that sports betting is legal in many states, some of us will have to learn how to bet on sports and how to read odds. Plus, you will need to learn about the different types of odds out there. So, keep reading to learn about odds and how to understand them. Once you’ve done that, you’ll need to calculate your chances of winning with a bet calculator.
What are Betting Odds?
So, the first question to be answered is: just what are betting odds? And, how are odds used to place wagers? These are the two most important factors when using odds to determine how to place your bets.
Betting odds represent the probability of a specific outcome. And, odds show the profit, or return, that you can get if your bet wins. This likelihood of a certain outcome is additionally known as the implied probability.
You need to know what implied probability is if you are going to bet on sports. Then, you can make an informed bet if the probability of an event occurring is larger than a predetermined implied probability.
Simply put, converting betting odds into probability is the implied probability. When sportsbooks set the odds on a bet, they first determine the chance of winning that bet. This way, a bookmaker hopes to avoid paying out too much in order to still make a profit.
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The Kinds of Odds
Hopefully, you are following along. Any time you look at sports betting websites, you’ll see odds listed. But, they may not be the same type of odds from sportsbook to sportsbook.
And, that is because there are multiple kinds of accepted odds on sportsbooks. The three most common odds formats are:
- Fractional odds
- Decimal odds
- American odds
So, it is really imperative to learn how to read all three kinds of odds. Then, you can understand most of the odds you will find on sportsbooks worldwide. And that will help you place more informed bets no matter the odds!
Fractional Odds Explained
You will most likely find fractional odds in Europe, not the U.S. Fractional odds are most common in the UK in connection with betting on horse races. These odds are used to demonstrate that a bettor will get their winnings proportional to their wager/stake.
In order to make things more clear, here’s an example to fully show how fractional odds work in practice. Assume the Yankees have fractional odds of 5/2. Put plainly, with each $2 that is bet, a profit of $5 is possible.
To figure the math our for yourself, use this formula:
Profit = (Stake/Denominator) x Numerator
So, if the stake is $50, then P = (50/2) x 5.
P = (25) x 5
P = $125
Fractional odds can be a bit complicated to understand compared to other kinds of commonly used odds. But, since they are not the preferred choice in America, you will not encounter them often. However, it is still good to know how they work.
Decimal Odds Explained
A widely used type of odds worldwide is decimal odds. If you are familiar with a variety of sportsbooks, you will have encountered decimal odds. So, here is an in-depth explanation of what decimal odds mean.
Boiled down, decimal odds illustrate what a bettor would receive in profits for a one-dollar wager. But, it is a little more complicated than it sounds. Below, you will find an example used to explain exactly how decimal odds work.
In this example, the New York Yankees have 2.0 odds to win against the Boston Red Sox. So, for every $1 that is bet on them to win, a bettor will get $2 in profits. That means the bettor will not only get back the $1 stake but also $1 in profits.
For you to be able to figure it out mathematically for yourself, use the equation below.
Profit = (Stake x Odds) – Stake
If we use the example from above with a $50 stake, that means:
P = (50 x 2) – 50
P = 100 – 50
Profit = $50
Decimal odds are not all that complicated when it comes down to it. The formula is maybe the easiest to do on your own. Hopefully, you will be an expert at understanding decimal odds from now on!
American Odds Explained
American odds will also sometimes be referred to as moneyline odds. In the US, naturally, American odds are the most widely used types of odds for sportsbooks. You will see them as either positive or negative odds.
It is easiest to understand American odds if you have an example. So, here is an illustration of American odds in action:
In this example, the Boston Red Sox are again playing the NY Yankees. Let’s give the Red Sox +150 odds and the Yankees -120.
Positive odds represent the profit a bettor will potentially receive if they bet $100. That means if they placed a wager of $50 on the Red Sox to be the winners, the profit the bettor would get if the Sox win is $75.
Negative odds numerically represent what a bettor would need to bet to win a profit of $100. That means if we use the example from above, they would have to wager $120. Plus, the New York Yankees need to win for the bettor to win a profit of $100.
American odds are very easy to understand when broken down like that. Plus, you will find these odds in most US sportsbooks. So, you should now be able to read most sportsbooks and understand their odds.
How to Figure Out Implied Probability
Now, you have learned how to understand the most popular kinds of odds. But, that is not all you need to know to place the best bets possible. If you figure out the implied probability of an event, you can place your best bets.
Figuring out the implied probability using positive American odds is pretty simple. To demonstrate this, we will use the same numbers and teams from above. This is how you would calculate the positive odds implied probability:
Implied Probability for Positive Odds
Implied Probability = 100/(Positive Odds + 100)
IP = 100/(150 +100)
IP = 100/250
Implied Probability = .4
So, the implied probability that the Boston Red Sox will win is .4 or 40%. Thus, the bookmakers for the sportsbooks will think the Red Sox have a 40% chance of beating the Yankees. You can use these odds to figure out what you want to bet on and how much.
Implied Probability for Negative Odds
Now, you need to learn how to calculate implied probability when it comes to negative American odds. Luckily, it is as easy as it is for positive odds. We will use the same numbers from the moneyline example. So, the Yankees have -120 odds in this example.
Implied Probability = Negative Odds/(Negative Odds – 100)
IP = -120/(-120 – 100)
IP = -120/-220
Implied Probability = .5454
That gives us an implied probability of .5454 or 54.54%. So, the New York Yankees will have a 54.54% chance of being the winners of the game against the Red Sox.
Calculators for Betting Odds
Well, now that you know the most common odds that are used, you can calculate them yourself. But it always makes sense to check your math using a betting odds calculator. This is to double-check that you have done it correctly.
You do not want to place bets with the wrong odds. Obviously, you want to place the best bet possible. A betting odds calculator can help you make sure you are using the right facts.
There are a lot of sportsbooks that have betting odds calculators. However, feel free to use our convenient odds calculator.
Final Tips on How to Read Odds
So, now that you know how to read and calculate the most popular odds, you should be ready to place your bets. Knowing how to read odds makes it so you can place the most informed bets. Likewise, you will have a better chance of having your bet pay off. Remember, however, that no bet is a sure thing.
And, now that you can calculate your own odds, compare multiple sportsbooks’ odds. Some may have different odds for the same event. But, you can still get a general feel for what the odds are for each outcome.
Finally, now that you are an odds expert, you can calculate implied probability. Implied probability is a great tool for bettors. So, you can be the best at placing bets and hopefully win!