How Do Betting Odds Work? Understanding Odds
Sports betting odds can look a little intimidating if you don’t know how to interpret them. But don’t worry, The Sports Geek is here to help. Understanding betting odds is a critical skill for any bettor. To be successful in the long term, you’ll have to learn how to spot value in the lines.
No matter which sport you’d like to bet on, this guide will teach you everything you need to know about how to read betting odds at sportsbooks. You’ll learn what betting odds actually mean, the difference between American, fractional and decimal odds, how to calculate implied probability and much more.
Sports Betting Odds Explained
Sports betting odds display the chances of an outcome happening in a sporting event. The odds determine how much you stand to win after betting a certain amount. The more you stand to win, the less likely the event is to happen. For example, if odds show that you’ll earn $170 from a $10 wager on the Denver Broncos beating the Washington Commanders, it suggests there’s a low chance of this occurring.
However, there is a difference between the odds of something actually happening (the true odds) and the odds given by sportsbooks (the implied odds).
True Odds vs. Implied Odds
You might also come across the notion of true odds and implied odds.
True odds are when a sportsbook sets a price that doesn’t include a take for itself. They reflect the true likelihood of an event happening.
Implied odds still reflect the chances of something happening, but they also include a house take, which in sports is called juice, or vig.
Example of True vs. Implied Odds
Take the Super Bowl coin toss. A bookmaker would calculate the odds of it landing heads up as even, or +100. Those are the true odds. However, the odds you’re offered on site might be -105. These are the implied odds.
In this example, you would earn 95¢ for every $1 you bet. The additional 5¢ is the sportsbook’s juice, and ensures that they will make a profit regardless of the outcome.
How To Read Betting Odds
Learning how to read betting odds takes some time, but all bettors eventually find the type of odds that work best for them.
Being able to read odds means you can quickly spot which teams are favorites and underdogs for events. You’ll also know which outcomes are worth betting on, and where sportsbooks might have made an error that you can exploit.
Sportsbooks and esports betting sites including BetUS, MyBookie and Bovada allow players to choose which odd types are displayed on the sites. There are three common categories of odds: American, fractional, and decimal. Below is a breakdown of how each type works:
American Odds
American odds show the amount you’d win after betting $100 on an outcome. They work like an index, whereby the higher the odds, the less likely your bet is to win (and the bigger your profits if it does win).
The odds are displayed in either a positive (+) or negative (-) format. Positive odds show winnings from a $100 bet. Meanwhile, negative odds show the wager amount needed in order to win $100.
Here are examples of how American odds work at the best sports betting sites:
| Sport | Odds | Stake | Winning Outcome |
|---|---|---|---|
| NFL | +300 on Ravens to beat Colts | $100 | $300 profit + $100 stake = $400 |
| MLB | +175 on Padres 1.5 run line vs Braves | $10 | $17.50 profit + $10 stake = $27.50 |
| NBA | -200 on Heat to beat Knicks | $200 | $100 profit + $200 stake = $300 |
| NHL | -300 on Maple Leafs to beat Oilers | $50 | $150 profit + $50 stake = $200 |
You might think American odds are solely used on American events like NFL betting lines and baseball odds. But in fact, they’re used in all sports. If you’re a big bettor who is likely to place $100 wagers, then American odds are perfect.
Calculating Winnings With American Odds
Calculating winnings with American odds doesn’t require a betting calculator. Here’s an example of how simple it is:
Example Of American Odds:
You want to bet $100 on the Ravens vs Colts game. The moneyline bet has two options:
- Matchup Odds
- Ravens win at +300
- Colts win at -200
Remember, positive odds show how much you win from a $100 wager. Negative odds show how much you need to bet in order to win $100. So, $100 on the Ravens earns you $300 profit. But $100 on the Colts only generates $50, since you’d need to bet double the amount ($200) in order to win $100.
Bettors may therefore ask, ‘Are negative odds ever good?’ Well, yes, they are. Negative odds show the favorite, and so they tend to represent a better chance of winning than odds with positive numbers. Of course, the drawback to this is that your profit potential is smaller when you bet on the favorite.
Determining which odds are better depends on your attitude to risk. Positive odds are riskier but they offer larger payouts. Negative odds are more conservative, but you won’t win as much.
Decimal Odds
Decimal odds show the total return from a $1 bet. The higher the number, the more you win, but your wager comes with more risk.
Your total return is stake + profit, which means decimal odds of 2.00 have a 50% chance of winning. Any higher, and the chances of you winning are less than even. Any lower and your chances of winning begin to increase.
Here are examples of how decimal odds work:
| Sport | Odds | Stake | Winning Outcome |
|---|---|---|---|
| NFL | 4.00 on Ravens to beat Colts | $100 | $300 profit + $100 stake = $400 |
| MLB | 1.75 on Orioles 1.5 run line vs Yankees | $10 | $7.50 profit + $10 stake = $17.50 |
| NBA | 1.50 on Heat to beat Knicks | $200 | $100 profit + $200 stake = $300 |
| NHL | 1.33 on Maple Leafs to beat Oilers | $50 | $150 profit + $50 stake = $200 |
European sportsbooks were the first to use decimal odds as standard back in the 2000s. That’s because in Europe, decimal odds were considered easier to read than fractional odds (which we will come back to later).
Calculating Winnings With Decimal Odds
Decimal odds show the total return of your bet if you stake $1. It means you need to do a little bit of math if you want to stake anything more or less than $1, or desire to know your potential profit.
The smaller the odds, the more likely the bet is to win. That means the favorite will be the lower number, while the underdog will have the higher odds.
Example Of Decimal Odds:
Here’s an example of how a MLB baseball betting moneyline might look for a game between Baltimore and Tampa Bay:
- Matchup Odds
- Orioles win at 1.80
- Rays win at 2.20
Here, a $1 bet on the Orioles earns you 80¢ profit, and $1.80 total return. The same bet on the Rays earns you $1.20 profit, and $2.20 total return.
So, when it comes to calculating your potential profit, just subtract 1 from the odds. If the odds are 5.50, your profit would be $4.50 for every dollar wagered.
Decimal odds never go into the negative. The shortest odds you can get is 1.01, although very few sportsbooks would keep a line open at that price.
Betting on individual sports like tennis and golf is perfect for decimal odds. You can see clearly how short players are to either win an easy opening-round match at a Grand Slam according to tennis betting odds, or the golf betting odds make the cut at a major.
Fractional Odds
Fractional odds are the most complicated odds you can find in a sportsbook. Historically, they were the first odds used for sports betting. Particularly in horse racing in the UK and Ireland more than three centuries ago.
Keep in mind that these are not easy to calculate unless you’re proficient in fractions.
The aim of fractional odds is to show how much profit you’ll make off a stake. The figure on the left of the “/” is your potential profit, and the figure on the right is your stake.
So, you might rightly ask, ‘How do fractional odds work in sports like horse racing?’ Well, here’s how.
Example One: You bet $1 on a horse to win a race at odds of 3/1. It wins, so you win $3 profit + your $1 stake.
Unfortunately, this is as simple as fractional odds get. Using horse racing as an example, here’s what happens when a horse has a better than 50% chance of winning:
Just like with negative American odds of -300, you’d need to wager $3 just to make a $1 profit. This is where the term ‘odds on’ comes from.
What happens, then, when you see a price such as 5/2 or 15/8? The odds work the same and you simply divide the left figure by the right figure. A $1 bet at 5/2 earns you $2.50 profit. A $1 bet at 15/8 earns you $1.87 profit.
Here are some examples of fractional odds in action:
| Sport | Odds | Stake | Winning Outcome |
|---|---|---|---|
| NFL | 3/1 on Ravens to beat Colts | $100 | $300 profit + $100 stake = $400 |
| MLB | 8/11 on Orioles 1.5 run line vs Yankees | $10 | $7.30 profit + $10 stake = $17.50 |
| NBA | 1/2 on Heat to beat Knicks | $200 | $100 profit + $200 stake = $300 |
| NHL | 1/3 on Maple Leafs to beat Oilers | $50 | $150 profit + $50 stake = $200 |
Calculating Winnings With Fractional Odds
You can see at the best sports betting sites which team is the underdog and which is the favorite with fractional odds by the bigger number on either side of the slash.
Example Of Fractional Odds:
You want to bet $10 on the Golden State Warriors beating the 76ers. Here are the odds:
- Matchup Odds
- Warriors win at 1/4
- 76ers win at 7/1
Here, the Warriors are the strong favorites. A $10 wager on the Warriors would earn you a quarter of your stake as profit, so $2.50. Meanwhile, a $10 wager on the underdog 76ers would earn you seven times that as profit, so $70.
So, with fractional odds simply multiply the first number by the second to see your win potential. Even odds would be 1/1, while heavy longshot odds could be 2000/1.
Sportsbooks offer fractional odds on most sports, but not many players use them these days. However, horse racing, dog racing, and harness racing still use fractional odds in many instances.
Sports Betting Odds Calculator
If you find yourself unable to calculate a bet, don’t worry because The Sports Geek has you covered.
Use our sports betting odds calculator to quickly see your profit and risk based on all three odds types. Calculate odds in a flash to help you confidently decide whether to bet or not.
Calculator
How To Calculate Implied Probability (Break-Even Percentage)
Calculating implied probability gives you the best idea of how likely a bet is to win. This can help you put the odds in perspective and weigh up their fairness and value. Implied probability is also known as break-even percentage.
Break-even percentage is how likely you are to win or lose money over time. If your break-even percentage is 50% then you will win half the times you bet, and lose the other half.
The higher the percentage, the better chance you have of winning. However, if you make less profit, the higher your percentage. Bettors therefore need to strike what they feel is a comfortable balance between likelihood and risk.
Implied Probability With Positive And Negative Odds
As we explained earlier, American odds are positive and negative. Here are calculations you can use to work out the implied probability of each:
Positive Odds
Formula: 100 / (positive odds + 100) * 100 = implied probability
Example: You bet on the Cardinals to beat the Reds at odds of +200. Your implied probability is:
100 / (200 + 100) * 100 = 33.3%
Negative Odds
Formula: negative odds / (negative odds + 100) * 100 = implied probability
Example: You bet on the Reds to beat the Cardinals at odds of -180. Your implied probability is:
175 / (175 + 100) * 100 = 63.6%
Implied Probability With Decimal Odds
You can work out implied probability with decimal odds via a straightforward calculation.
Formula: (1 / decimal odds) * 100 = implied probability
Example: You bet on the Giants to beat the 49ers at odds of 2.50. Your implied probability is:
(1 / 2.50) * 100 = 40%
Implied Probability With Fractional Odds
Fractional odds feel more like classic math that you’d learn in school, compared to the other odds types. You need to remember that the numerator is at the left/top of the fraction, and the denominator at the right/bottom. Here’s how to calculate implied probability with fractional odds:
Formula: denominator / (denominator + numerator) * 100 = implied probability
Example: You bet on the Heat to beat the Knicks at odds of 2/1. Your implied probability is:
1 / (1 + 2) * 100 = 33.3%
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