Understanding Betting Odds

If you have even the slightest interest in betting then you will need to know at the least the basics about betting odds. Bookmakers will express the odds in a number of ways – fractional, decimal and moneyline (or American). But they all mean the same thing and that is a reflection of how much you can expect to receive from a winning bet.

There is a lot of information that you can take from the odds – or the price – of an event’s outcome and when you understand how to read the format and what that means you can work out whether the bet is a good one to pick.

Basics of Odds

At their most basic betting odds are either odds on or odds against. It doesn’t matter in which format they are expressed (although some will seem more obvious than others) but these two terms will be able to tell you how much you can make in winnings.

If the price of the betting odds are odds on the amount you will be able to win on that event will be less than the amount you stake. On the other hand, if the price is odds against then the potential winnings will be greater than the amount staked. With an event that is heavily favoured you will be offered odds on betting odds – it is more likely that you will win but you will receive less back in profit.

The important thing to remember with both odds on and odds against is that whatever your betting odds are you will still make a profit, because you always receive your stake back on top of any winnings.

Betting Formats

One thing that might sometimes put off newcomers to betting is how the odds are expressed. The fact that there are a number of ways that the same odds are shown can add extra confusion. It depends on the bookmaker – and where in the world you are – but all the betting odds will always relay the same information, they will just look different. Although the following should explain how the various formats work a lot of sites will have their own betting odds calculator to help you work out your potential returns.

Decimal is fast becoming the most popular way of expressing betting odds, possibly due to the number of online betting sites. Here you will see the odds written in decimal numbers with the amount shown referring to how much will be won per unit stake.

For example, if William Hill is showing decimal betting odds of 1.50 for Manchester United to beat Huddersfield then a £10 stake will return £15. As you can see, with decimal odds the total return includes the stake.

The same betting odds shown in the fractional format would have Manchester United ½. This would be referred to as two to one on – an example of an odds on bet. Fractional odds denote how much you will receive in winnings for every unit of stake. In this example it would be 1 for every 2. So, if you were to make the same bet of £10 you would receive £5 in profit. But you also get your stake back so the full amount of the winnings would be £15.

Fractional odds have traditionally been more popular in the UK and, although this is changing slightly, you are more likely to see betting odds expressed in the fractional format in bookmakers and at racecourses.

Another way odds can be expressed is the moneyline format. This is sometimes referred to as ‘American’ as this is more commonly found in the United States.

For any non-Americans this may seem like the most complicated way of showing betting odds but once you get the hang of it moneyline odds are just as easy to understand as all the other formats.

Moneyline odds can be either a positive or a negative – for example +150 or -200. Positive odds tell you how much a winning bet of $100 would make. You also get to add the stake to the winning return as well. If the betting odds are negative it shows you how much you would need to bet to make a $100 profit. So that -200 odds example means that you would get $100 if you staked $200. Again, you would get your stake back so you would receive a total return of $300. With our original example for a Manchester United win the moneyline odds would be shown as -200.

These are all examples of how odds can be displayed by bookmakers but they can also change before – and during – an event. We will look at how the bookmakers set the odds in a moment but all potential bettors should know that the odds are liable to change depending on the probability of an event happening changing as well as how many people decide to bet on a certain outcome.

How the Bookmakers Set the Odds

In a perfect world bookmakers would look at the implied probability of an event happening and set the odds accordingly. For example, in a football match between Chelsea and Arsenal they would work out the possible outcomes from a total of 100%. In a football match it may be Chelsea to win 65%, the draw 20% and an Arsenal win as a 15% likelihood. They would then convert these percentages into betting odds.

But bookmakers are in the business to make money so they will alter the implied probability to give themselves a margin. They would ideally like to cover every single eventuality and make sure that they would still make money but as long as they cover enough of the market they will still make a good return for themselves.

With the Chelsea v Arsenal example they would price the odds with an implied probability totalling greater than 100%. The extra is where they make their money. So they might set betting odds with a Chelsea win at 68%, the draw at 23% and an Arsenal win at 18% – giving a total implied probability of 109%. The larger the margin the less that bettors will make as the odds will be reduced and that is why those more experienced in the world of betting will shop around for better prices.

How to Understand the Odds and How to Use Them

We have already looked at how to calculate your potential return on a winning bet – either using an online betting odds calculator or by working it out by simply reading the odds. But just because a price promises to pay out a particular amount of money doesn’t make it worth your while. The added element you should take into consideration is the value.

Understanding the odds is one thing but understanding value is the real key to long term betting success. When you can spot the value in the odds you should be able to potentially win more money.

The trick for any bettor is finding a bet where the likelihood of an outcome is greater than the odds that the bookmaker is offering. Of course, understanding probability is also vital to finding the value but when you can use your knowledge and insight to discover a value bet then you have a chance of bigger returns.

Many casual bettors will not take into consideration the value of a bet and that is exactly what the bookmakers want. But there is a simple formula you can use to discover the value.

Using the same event as before but with odds of 2.00 that might be found at Amazing.Bet for Manchester United to beat Chelsea – with an implied probability of a United win at 55% – we can work out the value as follows:

  • Value = (Probability x Decimal Odds) – 1
  • Value = (0.55 x 2.00) – 1
  • Value = 1.1 – 1
  • Value – 0.1

Whenever the value of bet is greater than zero then you will have found a value bet. In this case, given the probability of a Manchester United victory, odds of 2.00 represent good value.

As it is not always easy to know the implied probability of an outcome it is a good idea for bettors to specialise on particular sports, leagues or tournaments as that knowledge can then inform the bet. It is no good betting on an outcome just because the odds are 40/1 if you have no idea whether those long odds offer any value at all.

What are Betting Markets?

At its most basic, a betting market is a specific bet on a particular event. The market is where you will find the betting odds on a particular outcome. Just one football match may have over a hundred different betting markets depending on the popularity of the teams involved.

The betting market is where you can find out whether the odds offered result in a value bet – and as we have seen, that is when experienced bettors and those in the know have the potential to be successful in the long term.

An example of a betting market can be found at on online site such as 10Bet where the 1×2 betting market for the Champions League match between Ajax and Benfica offered the following betting odds:

  • Ajax to win – 1/1
  • The draw – 53/20
  • Benfica win – 59/20

By working out the implied probability of each of those outcomes you would be able to discover if any of those are value bets.

Understanding Betting Odds

As you can hopefully see, when you understand how bookmakers express their odds – whether it is decimal, fractional or moneyline – and how they end up at those odds in the first place, you have a greater chance of being successful with your selections.

What may seem initially confusing and overwhelming can be digested and understood – and then inform how you go about choosing which betting markets to make your selections. Getting betting odds explained can really make a difference.

The art of betting still has lot of luck and chance involved but when you understand the betting odds fully you will always have a greater chance of winning.