How Do Odds Work?

If you are an experienced bettor, you are certainly aware of such crucial things as odds. However, are you an expert in those numbers available for each sporting event? Frankly, I was often puzzled with the question ”how does betting odds work?” and was confused about them even after several years of wagering, as odds might differ from one operator to another. This mostly depends on the targeted country, but there are also some other peculiarities. Thus, regardless of whether you are a newbie or a seasoned gambler, you might still puzzle yourself with the question, “How do odds work?”. Luckily, I am here to give you a detailed explanation of those special numbers that show how much you can win in each event!

What Are Betting Odds?

Betting odds are numbers offered by bookmakers that show what are the chances that an event might happen or not. Yet, showing the possibility of something happening is not their main function for many players. Bettors are often interested in odds because they can help them calculate what the potential win could be. Thus, odds should never be ignored, as they are a valuable element of your prediction. 

When the odds are small, you can see that bookmakers are certain that something will happen (e.g. Manchester City will defeat Chelsea in their home match with 1.1 vs 3.4 odds in European bookmakers). However, the higher the odds are, the lower the possibility of something is.

What Is Probability?

Probability is the percentage that shows you how likely something is to happen. Yes, it sounds very much like odds. So, what is the point in probability when we already have odds? Expressed with percentage, probability is easier to perceive and understand by many new bettors.

The essential thing for understanding odds is not to forget that there is also probability. A mistake of many newbies is that they often consider odds and probability to be the same thing. Well, those terms are similar but not identical.

If I tell you that the odds for Chelsea to win in a match with Manchester City are 7/2, you might be confused at first. Some might not even know if it means that Chelsea has more chances to win or to lose. That is when probability becomes handy! Thanks to a simple calculation, which I will explain to you further, it becomes clear that there is a 22.22% chance that Chelsea will gain a victory. Your chances of making a good bet are much clearer with probability than with odds, aren’t they?

How to Use Odds to Calculate Probability

Now that you know how to understand odds and probability, let’s learn how to make your life easier with the conversion of odds into probability percentages. Luckily, you need just one simple calculation, and the odds become readable and clear!

However, there is always a little “but”. In the case of probability, your calculation depends on the type of odds you see. I will not show all of them. Just demonstrate the formula for the three most common odds types, namely:

• If you are a bettor at American crypto sportsbooks, you would like to calculate the probability the following way: 100/(Odds + 100) x 100. Let’s say the odds for Chelsea to win over Manchester City are +300, so the probability of it winning will be the following: 100/(300+100) x 100 = 25%.
• British bookmakers would like you to memorize the following formula: Denominator/(Numerator + Denominator) x 100. Given that the odds for Chelsea to win are 9/3 in the British format, the calculation would look like this: 3/(7+3) x 100 = 25%.
• Finally, any European sportsbook will give you the easiest formula to calculate probability: (1/odds) x 100. Using the 4.0 vs 1.5 odds in  the Chelsea vs Manchester City match, the calculation to find out the probability of Chelsea’s victory would be the following: (1/4) x 100 = 25%.

How to Read Betting Odds

How do odds work? A key to understanding is the ability to read them. After reading this section, you will be able to tell what is the probability of a certain event happening regardless of the sportsbook that you choose. At this point, you might be confused by the fact that the choice of a bookmaker matters when it comes to reading odds.

Fortunately or not, bettors in different parts of the world have to face different types of odds. To ensure that you are comfortable with reading odds at any sports betting site and know how odds work, I will explain all the types in this article.

Before you start panicking about how challenging reading odds can be, I can assure you that it is not that difficult as soon as you remember several unique features for all types. Some good news for this part is that odds are calculated the same way for all bet types. Thus, you can place a spread or a prop bet…it truly does not matter! All that does matter is the type of odds that are used in your sportsbook.

British/Fractional Odds

Let’s begin with the fractional odds. Those are some of the most challenging for all newbies. I personally struggled with those for some time, too. They become obvious with time, but you would need to spend some minutes to understand which team is a favorite and which is the underdog when fractional odds are used.

If you are not betting on a sports event in the UK or Irish sportsbook, most probably, you would never even need to know how to understand those odds. As you might have guessed already, fractional odds are often called Brish odds, given the area where they are most popular.

Getting to the essence of that type, the odds look like a fraction. Most commonly, you would see them written the following way: 7/3 or 5/2. Rarely, you can encounter them in this format: 7-3 or 5-2. Those odds show you the ratio of your potential win to your bet. For example, with 7/3 odds, you need to wager $3 to win $7.

One essential detail to keep in mind with fractional odds: they show you only your profit and do not include the initial stake. Why is it important to remember this? Because when you see odds like 1/2 (meaning you need to bet $2 to win $1), you might consider that you would lose even if you won.

European/Decimal Odds

Decimal odds are those that you might have encountered in many European sportsbooks. Given their popularity on the old continent, they got their name from it. Thus, you can often see that decimal odds are often called European odds. However, they are used not only in Europe but also in Australia, New Zealand, and Canada. Given how widespread they are, make sure you understand how to read odds in betting sites located in the above-mentioned countries and continents.

I should say that they are much easier to understand than British odds. Woohoo! Let’s take a quick look at the example: 

The odds in a match between Barcelona and Real Madrid are 1.3 and 1.1. Just after having a quick look at those odds, you might tell that one of the teams has a slight advantage. However, it is not Barcelona that has more chances of winning even though its odds are higher.

With decimal odds, you should remember that the smaller the odds are, the higher the chances of something happening will be. In the example above, Real Madrid has lower odds, so bookmakers believe that it has more chances to have a victorious match.

One more thing you would certainly find useful about decimal odds is how to calculate odds payout. Luckily, it is quite straightforward, and you can find out your potential win in seconds. Just multiply your stake by the odds size. If you would like to wager on Barcelona’s victory $10, you can win $13 if luck is on the side of this team.

American/Money Line Odds

If you are a fan of American football or simply prefer placing wagers at American sports betting sites, I would recommend you learn everything about American odds, which are also called Money Line odds. For those who have never seen those or got used to decimal odds in Europe, those +100 and -100 odds might be truly confusing. However, do not worry. You will consider them very easy and convenient when I explain how to calculate odds payout at American sportsbooks.

As Money Line odds come with plus and minus, they hit you on how much you need to bet to win $100 (odds with a “-”) or how much money you can make when you place $100 on stake (odds with a “+”).

What I truly like about American odds is that they do not include your stake and show just a pure profit. For example, when you place a bet that a team with +150 odds will win, and your prediction is correct, you would receive $150 profit + $100 (your initial bet), which totals $250.

I truly love the American odds system for this feature of not including the bet size in the odds, as that is when you can enjoy the pleasant surprise of having more money credited to your account than you expected!

7 to 2 Odd

Sometimes, you might come across 7 to 2 odd mentions in different articles or sportsbook blogs. Well, do not get scared, as this is not a new type of odds that you need to understand and find out how to calculate odds payout using them. 7 to 2 is actually just another name for fractional odds. Most probably, this name was made up by bettors to make it easy to memorize how to read fractional odds.

Here is a trick to it: 7 stands for the left number in a fraction, and 2 stands for the right number. Thus, you can easily remember that the left number gives you an idea of how much you can win, while the right number tells you how much you should place on stake to win that sum.

Vegas Odds

The situation with Vegas Odds is similar to 7 to 2. Bettors have just decided to give an alternative name to American odds. And I would agree that naming them after the gambling capital of the world is quite a good idea.

Anticipating your question about how odds work and whether there is any slight difference between Vegas odds and American odds: there is no difference between them.

How Do Positive and Negative Odds Differ?

Before I close up this blog article, I would like to answer one more question that might be essential for understanding odds. It puzzled me for quite a long time when I was a newbie in betting, so I would like to make sure that you have a clear picture of positive and negative (“plus” and “minus”) odds at American sportsbooks.

Contrary to what you might have expected, “plus” odds show you the underdog in the match, while “minus” odds give you an idea of who is the favorite. At least if you believe the predictions of a selected bookmaker. Therefore, you should keep in mind that your chances of winning are higher when you bet on a team or a player with “minus” odds, but your chances of having a bigger win are higher if you opt for “plus” odds.

Here is also a real-life example of how to read odds in betting on “positive” and “negative” teams. There is a match between Liverpool and Nottingham Forest. The odds are as follows:

• Nottingham Forest: +461
• Liverpool: -188
• Draw: +364

Given those odds, you can tell that bookmakers believe strongly in Liverpool’s victory, while the victory of Nottingham Forest or a draw is unlikely to happen. Yes, you can win $461 if you bet $100 on Nottingham Forest’s victory, but the probability that this team wins is only 18%. Thus, placing a “plus” bet in this match might be too risky.

Conclusion

Now that you have a complete answer to the question “How do odds work?” you can start analyzing them and calculating your profits confidently. Just one last piece of advice from an experienced bettor: select only a reputable and trustworthy sportsbook, as some bookmakers can confuse players with different types of odds to hide unfair odds.