How do Odds Work in Betting?
If you are just getting into sports betting, there must be a lot of things that seem intricate. And the first obstacle, any novice bettor encounters, is a great number of incomprehensible figures. And it’s no wonder, as wagering is based on calculations. But no worries! It’s not about advanced maths or complex formulae, it’s just about the calculus of probabilities, meaning, you should have a clear understanding of the question – how do betting odds work in sports wagering? And we are here to give you the full interpretation of betting odds and show how they actually function.
Bet odds explained
If to put it simply, when answering the question “what do betting odds mean”, then, practically, it’s the figure used to compute the potential winnings. But how to understand bet odds theoretically? For instance, let’s flip a coin in the air, heads or tails? The probability of each option is 50%. To express this in coefficients, we should divide 100 by 50%, which equals 2, namely, chances are even. Similarly, we can determine the likelihood for 3 or more outcomes. As easy as pie!
However, all of this applies to events where you can accurately determine the likelihood. But in sports, it is impossible to know the probability of an event. That’s why analysts calculate these ratios based on the statistics of previous matches between the same adversaries. They take into account tournament standings, motivation, organizational and financial problems of football clubs. All of the data are summed up, and they get an average estimate expressed as a percentage, in other words, the numeric equivalent of this combination of statistical data and analysis of the pre-match situation.
How do odds work in betting?
The coefficients show the likelihood of a particular outcome of an event from the bookmaker’s point of view. If the game is predictable, the values for the favorite will be low, respectively, and the winnings are small.
As an example, let’s consider football betting – the matchup with the participation of relatively unknown team X and renowned team Y. Team X is weak, and the likelihood of its winning is little, therefore, the rates increase, so does the potential payout, accordingly. For the strong Y, bookmakers will offer low values because the probability of its winning is high, and it’ll be necessary to pay bettors money they are likely to win. In order to reduce costs, bookmakers lower rates on clear leaders.
In the case of basketball betting, replace the soccer club with a basketball team. The meaning remains the same, the weaker the team, the higher the values, and vice versa.
What are good odds in betting?
Today, in just a couple of clicks, you can get access to an almost limitless selection of various rates, and it’s quite hard to monitor them. However, not all of them are worth wagering on, so which ones are actually decent? As coefficients mean probability, a bookmaker will always offer you high rates for the low-probability outcome and vice versa. Thus, good rates stand for a payout that exceeds the expected probability. Bookmakers do not always give a relevant assessment of a situation and sometimes get their calculations wrong. And this is where you can benefit from!
It is also important to note that, apart from high and low values, there are medium ones, which range from 1.55 to 1.9. In this case, it is easier to identify a winner, and the risk of loss is lower. In addition, in the event of a loss, the amount won’t be significant.
How do decimal, fractional, and American odds work?
The coefficients can be displayed in different ways: in decimal form (1.33, 1.50, etc.), in fractional form (1/3, 1/2, etc.), and in American form (100/300, 100/200, etc.).
The most popular and common form is decimal, it is also the easiest to understand. Going by the name, decimal format implies ratios expressed by decimal numbers. All you need to do is perform a simple mathematical action: multiply the nominal sum by the coefficient, and you’ll get the profit of the bet amount. Say, you stake €100 at 2.3, then your winning will be €230 (€100 x 2.3 = €230). It’s the most convenient type because, by looking at figures, you can identify favorites and underdogs at once.
Calculating probability using fractional numbers (which are popular among British and Irish bookies) seems a bit more complicated. Two actions are needed to perform here:
- Divide the denominator by the result of the sum of the denominator and the numerator
- Multiply the result by 100 to get the desired percentage
As an example, Cristiano Ronaldo won’t score a goal, the coefficients are 5/2, so we need to do the following:
- 2 / (2 + 5) = 0.2857
- 0.285 x 100 = 28.57%, which is the probability of winning
The American format is mostly used in the United States, especially in basketball and baseball. The best way to understand these numbers is to convert them into decimal ones, using the following formulae: (X+100) / X in case of a negative figure and (X+100) / 100, in case of a positive figure, where X – the American coefficients. Say, we have Los Angeles Lakers (-400) vs. Miami Heat (+550) match, the calculations will be the following:
(400+100) / 400 = 1.25
(550+100) / 100 = 6.50
Total odds meaning
Total – the total number of goals, pucks, sets, or other indicators – depending on the discipline. Accordingly, to bet on the total is to try to predict the number of goals scored, yellow cards received, shots, points, games, innings, etc. Total odds work in the same way as in other bet types, only with the difference that the values here will be offered for “over” or “under” options, that is over or under the spread indicated.
