Learning how to understand and calculate sports betting odds will significantly help improve your gambling experience. Typically, odds reflect the chances of your picks winning in the eyes of the bookie. Odd will also dictate how much money you might win or lose if the wager wins or loses.
Though sports odds can seem complex at first glance, this guide will ensure that you have all the requisite knowledge on how odds work. This will help you make informed decisions when placing sports bets at online bookmakers.
Defining betting odds
Betting odds are set by sportsbooks as a means to represent their assessment of the likelihood of specific sports events happening.
The odds are represented in the form of either decimals or fractions. The quality of odds also depends on the bookmaker. Odds Shark Canada has a list of bookmakers with competitive odds you can check out.
The decimal, for example, is more prevalent in the UK and Europe. Moneyline bets in America are different, in that they come with a plus or minus prefix.
Odds are applied to all events that sportsbooks are taking bets on, from football to horse racing, F1 races, and even the Olympics.
From its plain English meaning, probability is the likelihood of something happening. If a sportsbook has a result to an event with a high probability, that means it’s more likely to happen.
A simple explanation of probability would be with a coin toss, in which there are only two possible outcomes, heads or tails. Probability is mostly represented in fractions. The probability of getting a tail or a head is one of the two chances.
The probability is 50%, which can also be represented as ½. This is how punters can use the bookie’s betting odds to work out the likelihood of the sportsbook believing a specific outcome is to happen.
How to calculate probability from betting odds
Now that you understand what odds are and how they are presented, we can now progress to learning how to use odds to calculate the probability of a specific outcome occurring.
Probability calculation, in percentage, from odds is explained by taking the fraction representing the odds and replacing them with letters. If the odds were 2/1, turn them to A/B. Calculation of probability (%) = B/ (A+B).
Below are examples of odds converted into percentages to find the outcome’s probability.
- 4/1 will be calculated as 1/ (4+1) = 0.20. This means that there is a 20% chance of the outcome happening.
- 10/1 is calculated as 1/ (10+1) = 0.09. There is a 9% chance of this outcome occurring.
How to read sports betting odds
With an understanding of how to work out the probability of an event occurring, it’s possible to use the odds to work out the potential returns on your wager.
Odds represented in fractions dictate the potential winning in relation to your wager stake. For instance, if you place a $1 wager on Liverpool to beat West Ham at 4/1, your wager will pay $5 if successful ($4 in profits, plus your $1 stake).
Below are further examples:
- 7/2 for each $2 wager = $7 profits plus $2 stake ($9)
- 10/1 for each $1 bet = $10 in profits plus $1 stake ($11)
Odds where the first number is bigger than the second are odds against, while those with a small first number are odds on. Odds-on outcomes are considered more likely to occur than not by sportsbooks and vice versa for odds against events.
How do decimal odds work?
When represented in decimals, the potential winning will automatically include the stake. Therefore, calculating potential winnings is as simple as multiplying the odds with your stake.
Decimal odds are more commonly used by betting exchanges since the user is the one in control of the odds and not the bookie. Below are examples of how decimal odds work.
- 4.5 odds for every $1 bet would return $4.5, inclusive of the stake
- 11.00 odds, for every $1 bet, would return $11, inclusive of the stake.
Understanding American odds
Although the decimal and fractional sports betting odds are the most common ways for sportsbooks to showcase their prices on sports events, it is still important to understand how the American moneyline betting odds work.
Let’s get back to our coin toss example, where the odds for tails and heads are even or 1/1 (fractional) or 2.0 (decimal). This means that every $1 stake will return $2 ($1 profit plus $1 stake)
In American moneyline odds, the tails and heads outcome would be expressed as +100 or -100. The 100 number in the odds is the key figure, which we will illustrate with yet another example. This time, let’s take the American football match with the moneyline odds as follows:
- Miami Dolphins @ +130
- New England Patriots @ -145
If you believe that Miami Dolphins will win the game, the +300 means that each $100 you stake on them, will essentially win $230 ($130 profits plus $100 stake). A $10 wager would mean that you will win $23 ($13 in profits plus your $10 stake), calculated as $10/100 x 130.
The minus sign on the New England Patriots odds typically means that they are the favorites, and the calculation is different. The -145 connotes that you will win $100 for every $145 stake. Therefore, if you place a $10 wager it would return $16.90 (your $10 stake plus $6.90 in profits), calculated as $10/$145 x 100.
For both cases with a $10 stake, the calculation formula is (actual stake/ American odds stake) x American odds winnings.
A summary of how odds work
We have given you a full rundown of how betting odds work. You now know how odds work, how to read them, what probability means, and how to calculate your potential winnings from the odds.
With this information, you are ready to get started with your sports betting journey. You only need to register a real money account with the online bookmaker of your choice to get started.
Upon registration, be sure to take maximum advantage of the welcome offers, which often include free bets, no deposit bonuses, and deposit match bonuses among others.