Using Betting Odds to Calculate Probability
Probability and Value Bet
You might not be particularly familiar with the notion of a value bet, so we’ll try to explain things in order.
By setting odds, the bookmaker determines the probability that an event will occur, in their opinion. By analyzing the matches with different parameters, we may arrive at very different probabilities from the bookmaker’s.
Sometimes, a bookie underestimates the probability of an event and gives it a high odds.
This is the case that is the most interesting. In sports betting, this will be called a value bet. That is to say that the odds offered by the bookmaker are higher than what you had estimated.
It is obviously in this case that it is interesting to bet. Since there, you will make a bet that you feel is a “good bet.”
Generally speaking, when you want to win in sports betting. You have to aim for the values and concentrate your stakes on those bets. Surebets have almost disappeared since different bookmakers offer similar odds for the same match.
But as we have seen previously, the odds reflect a probability that the event will occur. However, for the calculation to be relevant, it is also necessary to consider the rate of profit to the players.
Remember To Subtract The Bookmaker’s Margin
Indeed, you should know that sports betting sites do not redistribute all of the stakes. In your calculations, you must therefore consider the total amount redistributed to bettors by the bookmaker.
Only by subtracting this margin taken by the bookmaker will you know the probability associated with the odds.
In most countries, even India, bookmakers have a return rate to players of around 85%, which means 15% of the total amount of the stakes for a bet not paid to the winning bettors.
It is, therefore, this percentage that is used as a basis to evaluate the chances that a bet will pass or not.
Explanation On Calculating Odds Based On Probabilities
For example, let’s calculate what probability corresponds to a odds of 1.50 fixed by a bookmaker.
The probability calculation is as follows: probability = 1/odds x 0.85 (the bookmaker’s reversion rate) x 100 (if you want to have a percentage).
For our odds of 1.50, we therefore obtain 1/1.50 x 0.85 x 100 = 56.7%
Therefore, it is about this probability value that must be taken into account for a possible value bet.
Using Betting Odds to Calculate Winnings
The odds also represent the probability of an event: the higher the odds, the more improbable the outcome. In our example, Burnley is not a favorite, and the odds associated with their victory are relatively high.
You can also easily convert the odds into percentages by operating (1/odds) x 100. For example, with the odds of 1.45, the calculation gives you (1/1.45) x 100 = 69%. The betting site, therefore, estimates that Chelsea has a 69% chance of winning the game. Note that if you add the percentage values of the 3 results, the total always exceeds 100% because the operator’s profit margin must be considered.
This margin, which varies slightly from one bookmaker to another, makes this theoretical calculation more approximate. However, to keep a few references in mind, here are examples of odds with the corresponding percentage of chances:
- Odds at 1.10: 91% chance of winning, a bet that is almost “safe”
- Odds at 1.50: 66%, or 2 chances out of 3
- Odds at 2.00: 50%, 1 in 2 chance
- 5.00 odds: 20%, 1 in 5 chance
- 10 odds: 10%, 1 in 10 chance
- 1000 odds: 0.1%, 1 in 1000 chance.
Now Let’s Analyze a Match
We go with Manchester United vs. Leicester City. As we can see, there are three possible outcomes: Manchester wins, draw, or Leicester wins. If you bet 100 INR on a Manchester win, you multiply 100 x 1.45, giving us 145 (you get back the 100 bet and add 45).
How Do Negative Odds Differ?
Don’t be intimidated by the brackets and parentheses. They want to change the symbol on the negative US odds.
It looks to be far more straightforward when we utilize actual numbers. We can determine Pittsburgh’s (-130) implied chance of winning the game using the scenario above. Remember that we can’t use this to figure out Ottawa’s since they have a positive odd
According to the bookies, Pittsburgh has a 56.5 percent chance of winning the game.
Bookmakers compete on several things but mainly on prices, such as shops in the main streets. Those who make the odds can observe, or the liabilities can be weighed on an area, and this is reflected in the odds to be offered for each event to be wagered. If every bookmaker offered the same odds on every market, it would be boring and take away the possibility of shopping in various parts. When things concern money, everyone likes to bargain and believe they’ve got a good price. The information bettors use must be accurate and up-to-date to ensure they stay one step ahead of odds movements and fluctuations.
The odds show construction in bookmakers’ profit margin, which can be anywhere between 1% and 50%.
A key weapon in the battle to beat bookmakers is odds comparison. Some bettors are purely price-driven, and in a saturated market, they will always bet at the best odds. The internet has sparked the growth of many odds comparison sites that compare the odds of the major players and highlight discrepancies. Free bets and promotions serve just that, to maintain the loyalty of their customers who would otherwise bet at the best possible odds.
What Is a Push?
A push is the outcome of a draw between the player and the bookmaker in sports betting. The gambler receives a refund and does not lose any money.
On a Point Spread
The final-score margin must be the same as the spread taken by the bettor for a stake to push on a point spread, as shown in the example below.
- The stake: USA -20
- The result: USA win, 41-21
- The stake: India +6
- The result: Pakistan loses, 76-70
On a Moneyline
Two conditions must be met for a stake to push on a Moneyline.
- The game finishes a draw.
- A tie was not among the bet alternatives.
The second is most prevalent in football, where a standard Moneyline wager issued by a bookmaker contains an option for each team and the tie – a three-way Moneyline.
In this situation, if you picked one side to win, the tie will count as a loss because you had the choice to stake on the tie.
A tie game results in a push on a two-way Moneyline (when the only alternatives are to bet on either team). However, be aware that the payouts for a two-way Moneyline are much lower due to this.
Is a Push Considered a Loss?
No. It’s also not a victory. When a bet pushes, the bettor receives back the amount placed and does not have to forfeit any stake.
In other to be successful in sports betting, here are few tips you must master:
- Follow sports news
- Read books or watch movies about sports betting
- Make simple bets
- Stop believing in fairy tales
- Find your style
- Learn to speak sports betting
- Choosing the right tipsters
- Choosing the right bookmaker
- Knowing how to manage your budget
- Take advantage of free bets
It is critical to comprehend and evaluate all forms of odds if you wish to enter the betting or gambling sector. Once you’ve mastered the three most common forms of odds (fractional, decimal, and American), you may go deeper into the subject and learn how the bookies always win, but it would help you make informed bet decisions.