BETTING ODDS EXPLAINED
HOW BETTING ODDS WORK
Betting odds are used by bookmakers to determine the likelihood of a given outcome in a sporting event. The odds quoted determine the probability of a particular outcome occurring in any sporting event. Betting odds also allow punters (the person making the bet) to determine the expected return on their stake should the predicted outcome become a reality.
Here are some of the key terms to note before starting to bet.
- Stake – this is the amount you decide to wager on your bet.
- Odds – this is the ‘price’ you agree to stake your bet at.
- Payout – this shows the expected return on your bet, if you are successful.
BETTING ODDS AND PROBABILITY
Probability reflects the likelihood of any given event happening. Betting odds are designed to do the same thing. The odds displayed on all sporting events on bookmaker site reflect the probability or ‘chances’ of each event they refer to happening.
An outcome at short odds is deemed very likely to happen, while those at longer odds are less likely to become true. Of course, it is important to point out that while probability in mathematics can be worked out scientifically, sport is something entirely different.
The reason we love to bet on sport is that the outcomes are not decided on any formula and the unpredictable nature of sport means that when you back something at long odds, it can still happen even if the odds are implying it is improbable. Equally, backing something at short odds with a potentially high probability does not guarantee it will become true.
As we have suggested, bookmakers use odds to display the probability or otherwise of all outcomes on sporting events. They can do this in one of three ways: fractional e.g. 2/1, decimal e.g. 3.00 or American e.g. +200.
FRACTIONAL VS DECIMAL ODDS
FRACTIONAL ODDS EXPLAINED
Whenever you see two numbers separated by a slash, i.e. 4/1, this is a fractional betting odd. The number on the right is the unit stake you are betting in and the number on the left is the potential return per unit stake.
In the case of a 4/1 bet, your bet is £1 and if it is successful you will win £4. The total return on this bet would therefore be £5 (initial £1 stake plus £4 winnings).
The probability of a 4/1 chance winning is 20% - based on his calculation 1 / (4 + 1) = 0.20
DECIMAL ODDS EXPLAINED
Decimals are an alternative to seeing betting odds in the fractional format. Which option to view odds in is a personal preference for customers. Here is the calculation for decimal odds:
Decimal odds are written as 9.0 (which is the equivalent of 8/1 in fractional odds). When you see decimal odds displayed, remember that these include your unit stake of one.
If you bet £1 at 9.0 and your bet wins, you will get back £9 (initial £1 stake plus £8 winnings). The probability of a 9.0 chance winning is 10% - based on this calculation 1 / (9 + 1) = 0.10
AMERICAN ODDS EXPLAINED
American odds display a positive or negative figure to indicate the likelihood of any given outcome. A negative number indicates a short price while a positive number indicates a longer price. These could be +300 or -200, for example. American odds format uses a baseline figure of £100 for calculation. For example:
-200 means you need to bet £200 to win £100. If your bet wins your return would be
A +300 means you have to bet £100 to win £300. If your bet wins the return would be
ODDS CONVERSION TABLE
Here is a handy resource for comparing and converting odds between the fractional and decimal betting formats:
ODDS ON VS ODDS AGAINST
“Odds on” is the opposite of “odds against”. It means that the event is more likely to happen than not. This is expressed with the smaller number first e.g. one to four (1/4). This means the particular outcome in that event is four times as likely to happen as not happen.
For gambling purposes, “odds on” means that the amount you stand to win is less than the amount staked.
In this scenario, if you staked £40 you will ‘win’ £50 if you have predicted the correct outcome (£40 stake + £10 winnings = £50 total).
The odds percentage chart below will help you consider the chances of any given bet being successful at the odds you have taken:
When the probability that the event will not happen is greater than the probability that it will, then the odds are “against” that event happening. Odds of, for example, six to one (6/1) are therefore sometimes said to be “six to one against”. For gambling purposes, “odds against” means that the amount you stand to win is greater than the amount staked. In this scenario, if you stake £10 you will ‘win’ £70 if you have predicted the correct outcome (£10 stake returned + £60 winnings = £70 total).