Odds are one of the most widely recognizable characteristics of sports betting. They show you how likely something it’s to happen, how much can you win and how big of a risk a certain wager is. They are the basis of placing sports bets with any online gambling platform (and the offline betting shops, too), so any punter who’d like to get started with wagering on various events needs to know what they represent and how to read them.
Well, if you’d like to learn more about how to calculate the probability of something happening, how do different odds impact your potential returns and what they mean for the likelihood of an outcome, read on our comprehensive beginner’s guide to understanding odds in simple terms.
How do betting odds work: All you need to know about odds and probability in sports betting
Betting odds are the numbers that show you the probability of an event occuring. In the realm of sports betting that means they also detemine how much you’ll be able to win if you place a certain wager. For instance, if you place a £1 bet at lower odds, that will have a higher chance of bringing you some winnings but they won’t be as huge. If you place a £1 bet on higher odds, on the other hand, the chances you’ll lose are higher but the potential returns if you win are much bigger.
Usually the bookies offer odds in several different formats (which you’ll see mentioned below) and they calculate those depending on how likely they consider a given outcome to be. And you can also consider them as a ratio which shows your potential profit in respect to the potential loss.
Main formats of betting odds explained and how to read betting odds
There are three main types of odds format. The most popular ones used within the UK and Europe are decimal or fractional but you might see odds show in the American way.
Decimal odds
Decimal odds are presented as numericals of the sort of 2.00 or something of the kind. The idea here is that they show you the potential return on the given market. With this format it’s quite simple to determine how much of implied probability a given event has. The higher odds mean a lower chance and the lower odds mean higher likelihood. For instance, a £10 bet at odds of 3.25 has low chance of happening but can return £32.50 whereas a winning bet placed on 1.5 is much more likely but will return only £15 (with £5 in profit and your £10 stake back).
Fractional odds
With the fractional format the odds are displayed as two numbers separated by a slash (/), such as 7/1, for instance. The first number here is the amount you can potentially win whereas the second one shows how much you need to bet for that to happen. If we take into account the example above, the 7/1, if you place a bet of £1, you can win £7 for a total payout of £8 (£7 in winnings plus your initial £1 stake).
If the number on the left is higher, that means the odds of something happening are lower and you need a small stake amount for potential higher winnings. If the number on the right is higher, that means this outcome is more favorable and you’ll need to place more for a lower return. For instance, on 5/10 odds you’ll need to wager £10 to win £5.
American odds on favorites and underdog
Even though you’ll most commonly see those mentioned for American football and NBA events, American odds are also used in fighting sports, predominantly UFC. They’re also known as moneyline odds and are much different than the other two kinds mentioned above, mainly because they’re seen less often across Europe. Those are also the odds which come with positive and negative signs. The latter (those with the ‘-‘ sign) are for the favorites.
And after the sign you’ll see a number which shows you how much you have to wager on the given market to get $150. On the other hand, the positive ones are for the underdog and those odds tell you how much can you profit on a USD 100 bet.
Converting odds in different formats: From fractional to decimal to American
If the odds listed for any sports market online aren’t exactly what you prefer using, you can easily switch between different formats, as long as you know how to. So, let’s take a look.
How to convert fractional odds to decimals?
Using decimal odds is one of the easiest ways to play and it’s preferred by many UK punters. So, if you see fractional ones shown and you’d like to understand what their decimal equivalent is, simply add one.
How to convert decimal odds to fractional?
Whenever you’d like to use the other kind of conversion, you need to simply:
- take the decimal representation
- subtract one from it
Or you can easily see how the odds would change from decimal to fractional format by using our free odds converter.
How to convert fractional or decimal odds to American and vice versa?
Let’s take a look at the different scenarios:
- for positive american odds to decimal ones you need to take the american odds divided by 100 and add one.
- for negative american odds to decimal ones you need to subtract 100 divided by the odds by one.
- for positive american odds to fractional divide the odds by 100
- for negative american odds to fractional divide minus 100 by the american odds
- for decimal odds to positive american ones subtract one from the decimal and multiply that by 100
- for decimal odds to negative american ones take negative 100 and divide that by (the decimal minus one)
- for fractional odds to positive american ones take the fractional and multiply it by 100
- for fractional odds to negative american take negative 100 and divide it by the fractional
Of course, if you don’t want to go through all the hassle of switching between fraction or decimal or american moneylines, you can simply use an odds convertor which will do all the work for you.
| Fraction | Decimal | American (Moneyline) | Implied Probability |
|---|---|---|---|
| 1/100 | 1.01 | -10000 | 99% |
| 1/5 | 1.2 | -500 | 83.30% |
| 2/9 | 1.22 | -450 | 81.80% |
| 1/4 | 1.25 | -400 | 80% |
| 2/7 | 1.29 | -350 | 77.80% |
| 3/10 | 1.3 | -333.3 | 76.90% |
| 1/3 | 1.33 | -300 | 75% |
How to use odds to determine your potential winnings: Determining the possible payout with different formats of odds
Whether you’ve got decimal or fractional odds or you’ll be using the moneyline format, you can just as easily calculate your potential returns if you know how to:
- for decimal odds the total return is your stake multiplied by the odds and if you’d like to see the winnings, from the total amount that you end up with you can simply subtract how much you’ve wagered
- for the fractional odds you simply take your stake multiply it by the first number and then divide the result by the second number
And, as we already talked about above, with the moneyline odds, the positives show how much you need to bet to win £100 whereas the negative ones show how much you can win on £100 staked.
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