Betting Odds Explained: Beginner’s Guide 2022
Published on Monday, August 29th, 2022, Updated on Tuesday, August 30th, 2022
If you want to place bets with your eyes open so that they can deliver on your expectations, you should understand the process in its finest detail. One of the most important and, at the same time, most confusing moments in this activity is betting odds. You‘d better know what they mean and how they work in order to foresee your potential winnings and avoid making silly mistakes.
If you want to succeed, you should comprehend sports betting odds to compare variants and make the most beneficial bet. This subject is certainly worth investigating. And we are going to do it in this article.
What Are Betting Odds?
Betting odds are parameters showing how much a bettor will win if he puts $100 on the outcome. You can find its brief definition in our glossary. So, you can calculate your payout by bringing the odds into correlation with the amount of your bet. Whether you prefer spreads or totals, sportsbooks will represent the odds, saying what they will pay if you guess the outcome of the event.
There are three key types of odds used in various national heritages. They are British odds (fractional odds), European odds (decimal ones), and, at last, the American (or USA) odds, also known as Moneyline odds. These versions are built in their particular manner and should be read differently. Let’s start to study each type.
What Is Probability?
First, you should know what probability is. You should not bet, keeping your fingers crossed. The art of betting is about a precise prediction of the end of the game, considering numerous impact factors, and understanding the sport as a whole. If your assumptions are right, you will win and get your payout.
It is clear that you can predict several outcomes for any game or sports event. The simplest example of calculation of the probability is a coin toss guess. You can take a coin and toss it. But before you predict, you get heads or tails. The probability of every outcome is 50%, which means that, if we divide one by two, we get either 50% or 0.5%.
How to Read Betting Odds?
As we have mentioned, in different countries, odds are represented in different ways. But all of them show the value of your bet and your potential winning amount.
If we consider the American odds, we’ll take, for instance, Team X (+100). So, there is always a number in 100, coming with a plus or minus sign. This number is the 1:1 ratio, which should be understood as follows: every $1 of your bet will bring $1 of your payout. “Plus” means that you can win over $100 by betting $100, while “Minus” means that you are expected to bet more than $100 if you want to win $100.
An example of a money line bet.
The Team 1 (+120). The Team 2 (-160).
You should read the above odds as follows:
- you will get $120 if you bet $100 on Team 1 and this team will be a winner;
- you will get $100 if you bet $160 on Team 2 and this team will be a winner.
How Do Betting Odds Work?
You’d better comprehend all types of betting odds: British, European, and American. We hope it is clear that they come with information about the amount of your bet and your potential payout. Also, sportsbooks guarantee their own income by incorporating it into these rates.
Let’s look at them in more depth now.
How Do British or Fractional Odds Work?
The British odds are known as fractional odds. You can find them named “traditional odds” too. They are mostly used in Great Britain. They come with a slash. For instance, 5/1 (five-to-two). It means that a bettor is expected to bet $1 if he wants to win $5. More to the point, every dollar of the amount a bettor is going to wager will bring $5. It goes without saying that the sportsbook will return your $1 in addition to the amount of your prize.
The Team 1 (9/3). The Team 2 (6/2).
- If you choose Team 1, you are expected to bet $3 in order to win $9. Here, $1 will bring you $3. If you bet $100, you will win $300 (100 x 9/3). The payout is $400 ((100 x 9/3) + $100).
- If you choose Team 2, you are expected to bet $2 in order to win $6. Here, $1 will bring you $2. If you bet $100, you will win $200 (100 x 6/2). The payout is $300 ((100 x 6/2) + $100).
How Do European or Decimal Odds Work?
The European odds are known as decimal odds. You can also find them named “digital” or “continental” odds. They are used in Europe, Canada, Australia, and New Zealand. They are the easiest type to grasp, showing the amount that the bettor gets for every $1 that he bets. It is suggested that a bettor should multiply the amount of his bet by the odds to get an idea of the payout (win + bet).
The Team 1 (5.00). The Team 2 (1.2).
If you bet $100 on:
- the Team 1, you get $500 (100 x 5). This sum consists of your bet ($100) and your winning amount ($400).
- the Team 2, you get $120 (100 x 1.2). This sum consists of your bet ($100) and your winning amount ($20).
The higher the probability is the lower the win you get. It means that Team 2 is the favorite to win the game.
How Do American or Money Line Odds Work?
In the USA, sports betting is legal in 30 states. Here, American odds are used. The example provided earlier in this article is quite comprehensive. The American Odds are always represented in 100. The odds for favorites come with a “-“ sign, informing you that you are expected to bet the indicated amount to get $100 in case of your win. The odds for the underdogs come with a “+” sign. It means that the specified amount is a payout that you may get for every $100 of your bet. If you win, the sportsbook returns your bet and pays the amount of your win.
The Team 1 (+560). The Team 2 (-630)
You may decide on any of these teams. In the case of your win:
- The former will bring you $560, and you will get back $100 of your bet. The payout will be $660.
- The latter will bring you only $100, and you will get back $630 of your bet. The payout will be $730.
The higher the probability, the lower the winning prize you have. It follows that Team 2 has more chances to win, and the bettor accepts the lower risk when he bets on it. As a result, the sportsbook offers to put quite a large sum on Team 2 to get only $100.
To understand the nuances deeper, we recommend learning betting rules.
What Are 7 to 2 Odds?
7 to 2 is British or fractional odds. It should be read in the following way: every $2, which you bet on the outcome, will bring you $7 if you win. For instance, if your wager is $200, your payout will be $900 if you win, including $200 (your bet) and $700 (your prize).
What Does +200 Mean for Odds?
+200 is American Money Line odds. You should read this parameter in the following way: you are expected to bet $100 on the outcome, and if you win, you’ll get $200 in addition to your $100. The whole payout will be $300.
How Does Plus/Minus Work in Sports Betting?
If the odds come with the “-” sign, they show you the amount that you should bet on the outcome to get $100 when you win. In such a way, the favorites are marked.
If the odds come with the “+” sign, they show you the amount that you will get if you bet $100 on the outcome. In such a way, the underdogs are marked.
What Does It Mean When Odds Are Negative?
Negative odds can be met when you deal with American odds. They mean that a bettor is expected to put the indicated amount on the outcome in order to win $100. Commonly, this amount exceeds $100. Thus, when your stake exceeds the amount of the potential winning amount, it means that you have good chances of winning, but the sum will not be as large as it could be if you accepted a higher risk.
What Are Vegas Odds?
Vegas odds are used in the US sportsbooks. They consist of a point spread and a money line. The point spread is predicted by a sportsbook and shows, how many points the team is going to lose or win. Just as with American odds, the favorite comes with a negative point spread, while the underdog comes with a positive point spread. The bettor can wager over or under the bookmaker’s prediction.
The Team 1 (-8). The Team 2 (6)
The former comes with a point spread -8. If you bet on it, you should expect the team to win by more than 8 points. The latter comes with a point spread 6 and is expected to win or lose by 7 points or less.
Calculating Betting Odds
Using Odds to Calculate Implied Probability
The odds help you calculate how likely a given event is to happen with a calculation.
For example, let’s take fractional odds, represented as the numbers with a slash. In order to know what the chances are that the assumed outcome is going to happen, you should multiply the denominator by the sum of the numerator and denominator.
If the odds are 8/2, the probability will be 2 / (8 + 2) = 0.20 or 20% (0.20 x 100).
Let’s take the decimal odds represented as the numbers divided with a comma. In order to know, what the chances are that the assumed outcome is going to happen, you should divide “1” by the number.
If the odds are 2,6, the probability will be 1 / 2, 6 = 0.38 or 38% (0.38 x 100).
Let’s take American odds coming in 100 with a “-” sign next to the number. In order to know, what the chances are that the assumed outcome is going to happen, you should divide the odds by the sum of the negative odds and 100.
Now, let’s take the American odds coming in 100 with the “+” sign next to the number. In order to know, what the chances are that the assumed outcome is going to happen, you should divide 100 by the sum of the positive odds and 100.
- The odds are – 500.
500 / (500 + 100) = 0. 83 or 83 % (0.83 x 100). The probability that this sports event will have the predicted outcome is 83%.
- The odds are + 500.
100 / (500 + 100) = 0. 17 or 17 % (0.17 x 100). The probability that this sports event will have the predicted outcome is 17 %.
Using Fractional and Decimal Odds to Calculate Winnings/Payouts
Betting odds show you what amount you will win if your prediction is right. You can calculate your prize in the following ways:
- In the case of fractional odds, you should know that you will get the value of the numerator for every value of the denominator. The whole payout should be increased by the amount of your wager. Example: 8/1 means that for every $1 you will win $8.
- Decimal odds mean that the amount of your win is calculated in accordance with the formula: odds x bet. For example: if you bet $100 on the outcome with 7, 8 odds, you should multiply $100 by 7, 8 and take the amount of your bet from the result. If you win, you will get 100 x 7,8 = $780, which includes your bet. Your pure gain will be $680 ($780- $100).
Who Sets the Odds for Sports Betting?
The odds for sports betting are calculated by the so-called oddsmakers. These specialists do research considering the statistics in the analyzed sector, historical data including previous outcomes, and building trends, which allow predicting the current outcome. Indeed, there are plenty of impact factors. Even weather conditions and the health state of the players are considered. The calculations are made with the help of computer algorithms and other tools. You should know that in addition to the probability of the outcome happening, the odds include the margin of the sportsbook.
How Do Bookmakers Set Their Odds?
Bookmakers calculate odds with their margin, which is referred to as an “over-round”. There are various approaches to running a bookmaker’s business. That is why you are recommended to compare the odds on various online sportsbook websites and choose the most favorable ones. They can apply different margin rates and that impacts the winning amount. For instance, if the probability of a win is 80% and the margin of the sportsbook is 3%, then the implied probability will be 83%.
Why Do Odds Change Before Events?
Different bookmakers may offer different odds because they calculate the probability considering various facts taken as the basis (there are no strict rules here) and/or because they add different margins. These are the key reasons for the variety of sports betting odds.
Which Odds to Choose?
The format of the odds is a matter of preferences and availability. Some sports betting sites provide their bettors with a choice. If so, it is commonly believed that decimal odds are the simplest to understand and apply. American odds are the most confusing ones. However, you can compare the amounts of your win by converting between all types of odds available. Some online platforms deliver online odds calculators.
In fact, it doesn’t matter which type of odds you use. Your winnings do not depend on the way of the viewing odds. Choose the most simple and understandable one for you.
We hope that you’ve learned a lot of useful information about betting odds, which will help you to bet money on some outcomes and have a comprehensive idea of your potential winning amount. The odds are also used to calculate the probability of the wanted result. When considering various methods, you can choose between high risk and high gain, over/under in betting. By balancing all the parameters, you’ll place a stake that will meet your expectations.
Why do I need to understand sports betting odds?
An understanding of different types of odds will help you succeed in sports betting. Actually, they are different on various sports betting sites depending on the sport and the registration country of the sportsbook. So, when you understand the way the sports betting odds work, you can avoid making false steps leading to low wins.
What are better, decimal or fractional odds?
The choice depends on your preferences. The decimal odds are supposed to be the simplest odd type to apply. You will find them on almost all online sportsbooks. But, still, this is for you to decide.
Why are decimal odds used more commonly these days?
The answer is in the simplicity of this type. They allow you to calculate your potential winnings quickly and easily. Just multiply the value of the decimal odds by your bet and you will get an idea of your payouts.
Can the odds offered by a bookmaker vary?
Yes, the betting odds for a particular event can vary. The reasons are unforeseen circumstances like injuries to a player, weather conditions, and others, which impact the chances of winning that have been calculated before.
Are betting odds different from sport to sport?
The answer is yes. If the sport is popular, attracting a lot of bettors, the betting odds here will be higher compared with the odds for a sport that is not among the favorites. For instance, in football, you can get really huge winnings provided that you are well grounded in this activity.
Which sports have fixed odds?
Football, baseball, hockey, and many others have fixed odds.
Can you lose money on a winning bet?
Yes, it is possible. If you place the wrong bet, you will not win and you lose your bet. To avoid it, you should understand the odds, be knowledgeable about the subject (a sport which you bet on), and refuse to place multiple stakes.