How Do Betting Odds Work?

How Do Betting Odds Work?

Betting odds and the differences between decimal and fractional odds may seem confusing at first if you’re not familiar with these things. We all have to start out learning about a subject before we can begin and betting is no different. Here at Sporticos we’re no strangers to betting and have written up his handy guide to help explain betting odds. Once you’ve finished you’ll be an expert and can get started on making your bets!

A Short Introduction to Betting Odds

If you’re looking to get started with a betting account you’ll need to know all about odds and how to use them. Betting odds are used by bookmakers to represent the possibility of an event occurring. You’ll see betting odds used to show the likelihood of a particular thing happening, either in sports, TV or politics. 

How much you make in winnings off a bet will directly depend on both your stake and your odds. Once you understand betting odds you’ll be able to quickly work out in your head how much you will win from the bet based on how much you have to bet.

Betting odds are usually either displayed as a fraction such as 1/5 or a decimal such as 0.2. You may also see Moneyline odds such as +150 which are typically used in American sports. If you’re having trouble understanding exactly what odds mean, they’re not quite as complicated as they first seem. 

Although betting odds may seem confusing at first, don’t worry, this guide will cover the main points regarding odds and how to use them. We’ll fully explain the key points of the different types of betting odds you’ll see. We’ll go over the best way of reading betting odds and how to work out how much you’ll win from a bet. And finally, we’ll share with you some tips and tricks which will help you understand betting odds and how to make the most out of your bets.

How Does it Work?

Betting odds are used to determine the winnings of a bet and are a display of the probability of an event. There are generally three main categories of odds when talking about probabilities, even, long and short. We’ll go over each type and explain how betting odds work.

Even odds are given to events which have a 50/50 chance of occurring. In other words, these are events which have an equal chance of happening to not happening. An example of even odds would be a coin toss, there’s an equal chance of both heads and tails. 

When it comes to betting, even odds are displayed as 1/1 using fractional odds or 2.0 in decimal odds. It’s the easiest type of odds to calculate your winnings from as a successful bet will have winnings the same as your stake. For example, if you had bet £10 on 1/1 odds, you would win £10. In total, you’d get £20 back since you’d win £10 and also have your £10 stake returned to you.

Long odds is the name given to odds on an event which isn’t very likely to happen, these are riskier bets to make but you also have the chance to win a lot more. Statistically improbable events such as Leicester winning the Premier League are examples of long odds.

When making bets, long odds are displayed with a larger number above or in front of the smaller number for fractional odds for example 10/1. When using the decimal format, long odds are displayed as a larger number, for instance, 11. In both formats, the larger the number, the more unlikely it is for the event to occur. With odds of 10/1, you would win £100 from a £10 bet. In total, you’d receive £110 since you’d get your winnings plus your £10 stake.

If an event has a high chance of occurring, it’s given short odds. Short odds are given for events which are more likely to occur, meaning a greater chance of winning. Although there’s a higher chance of winning, the amount you win will be smaller. To win big on short odds, you’ll have to make a much larger bet.

When looking at the odds for an event, short odds will have a smaller number in front or above a larger number if the odds or fractional, for example, 1/10.  If you’re using decimal odds, short odds will be a number no greater than 1.90. With fractional long odds, the higher the difference between the two numbers, the more likely the event is to occur. With decimal long odds, the closer the number is to 1, the more likely the event is to occur, with 1 being an event that is 100% guaranteed to happen.

Some bookmakers will also take “each way” bets. What is an each way bet? Well, this is something usually seen when betting on horse racing. It allows you to have a kind of insurance to protect your winnings if your selection narrowly misses out on the win. Each way bets are made up of two equally sized bets, one on your selection to win and the other on your selection to place in any of the top positions, usually the first 4 or 5. When you place an each way bet, you are betting on two separate outcomes on the same race, so although you can lose your initial bet if your horse doesn’t win, you can still come out on top with some winnings if it places.

Fractional Odds

Fractional ones are displayed using fractions such as 3/1, 4/5, 2/7. You might remember fractions as being confusing from your time at school but we should be able to explain them better than your maths teacher did! 

To use it and calculate how much you win, you have to examine the two numbers. The number on the right is how much you will need to stake to win the number on the left. So for instance with odds of 3/1, if you stake £1 and your bet wins, you’ll win £3. Pretty simple right? 

Of course, if you want to make a stake that isn’t the same as the number on the right you still need to be able to calculate your odds. For ⅘, if you, if you wanted to bet £20 that would be 4 times bigger than the number on the right. This means if you win, your winnings will be 4 times bigger than the number on the left, £16 in this case. 

Here are a few more examples for you if you’re still stuck: 
With odds of 2/7, a bet of £14 would give you £4 in winnings as the stake is double the number on the right.
Fractional odds of 5/2 would give you £25 if you won a bet of £10 as the number on the stake is 5 times the number on the right. 5 times 5 is 25, so that’s your winnings.

How do Decimal Odds Work?

Alongside fractionals, decimal odds are one of the most common ways of representing betting odds. They’re displayed using a simple number usually with two decimal places, for example, 11, 1.15 and 3.2. 

Some people find fractional ones easier to use but decimal odds are even easier to use once you know how. To find out how much you’ll win, all you need to do is multiply your stake by the number, simple! The number you get will be the total amount of money you get back from a winning bet. So for instance, if you want to bet £20 on odds of 3.2, you would receive back £64. That’s £44 in profit plus your £20 initial stake. 

The advantage of decimals odds over fractional is that they’re often easier to calculate. The decimal odds also have the advantage of showing you the total amount you’ll receive back, rather than just showing you your winnings.

Here are a few more examples to help you understand how decimal ones work:

For odds of 1.15, a bet of £20 would give you £23. You would win £3 and receive your £20 stake back.

If you want to bet on an event which has odds of 11, a bet of £10 would give you £110. You’d win £100 in profit and receive your £10 stake too.

Moneyline Odds

Typically used to display odds for American sports, Moneyline odds are another way of representing the probability of an event. You can recognise Moneyline odds by the use of either a plus (+) or minus (-) figure in front of the number.

Events that are less likely to happen and have bigger winnings are represented by the plus sign. Outcomes that are more likely and pay out lower are represented by the minus sign.

Moneyline odds are a bit trickier to use than decimal odds and lots of people also find fractional odds easier to use in comparison. There is a fairly simple formula you can use but it will depend on whether the odds are negative or positive. To calculate how much you’ll receive for a winning bet that has positive odds use this formula:

Your stake multiplied by (odds/100) + your stake.

So for example, if you wanted to bet £10 on odds of +200 you would calculate it like this:
£10x (200/100) + £10 = £30 

For shorter odds you’ll see a minus sign, to calculate the amount you’ll receive from a winning bet on this type of odds, use this formula:

Your stake multiplied by (100/odds) + your stake.

For example if you wanted to bet £10 on odds of -200 you would calculate it like this:
£10x (100/200) + £10 = £15

What is Probability?

Probability is, as the name suggests, the measure of how probable an event is. All betting is based around probability and determining how likely an event is to occur. The bookmakers determine the probability which they base the odds around. If you think an event has a good chance of occurring you make the bet after judging whether the risks are worth the potential reward.  

When talking about probability and chance we assign percentages to talk about how likely an event is to happen. Something that’s guaranteed would have a 100% chance whereas something impossible will be a 0% chance.

To give us a better understanding of how probability works, we can look at dice as an example. Each time you throw a die there are six possible outcomes, one for each number represented on the faces of the die. Any bet on each of the numbers, therefore, would carry the same probability chance of 16.67%. That’s the total chance of 100% divided by six, for each potential outcome. 

For bookmakers, this probability chance will be written as the betting odds, in the case of the dice throw, each face would be given odds of 4/7, 1.57 or -175.

Calculating odds - how to do this?
You can also calculate the given probability of an event by looking at the betting odds. When using fractional odds we use the following formula to calculate the probability of an event.

First, to represent the formula better, we have to replace the numbers with letters. So odds of 5/2 will become A/B.
Probability % = B/(A+B) x 100

So for odds of 5/2, the probability will be 2/(5+2) x 100 = 28.6%

10/1 will have a probability of 1/(10+1) x 100 = 9.1%

If you want to find the probability of an event by looking at the decimal odds use this formula:

Probability % = (1/decimal odds) x 100

So for odds of 5.5, the probability would be (1/5.5) x 100 = 18.2%

1.15 will have a probability of (1/1.15) x 100 = 87%

Finally, we can also calculate the probability of an event by looking at American Moneyline odds. As with calculating your winnings, the formula you use will change depending on whether the odds are negative or positive.

For positive moneyline odds we use this formula:

Probability % = 100/(positive odds + 100) x 100

So for odds of +150 we would get 100/(150+100) x 100 = 40%

For negative moneyline odds we change the formula to this:

Probability % = negative odds/(negative odds + 100) x 100 

So for odds of -200 we could get 200/(200+100) x 100 = 67%