How to Read and Calculate Betting Odds

By Benson Chikezie, Senior Author

The main fear of any person when starting in the world of sports betting is the concepts.
There is an obvious fear of seeing numbers or signs that they might not understand naturally. It is something that happens to all of us who are newbies, without any discrimination.
The first time I learned about betting odds, I thought it was about investing, picking the team to win the match, and getting paid. On many occasions, it is that simple; in others, not so much. However, the world of sports betting is not as complex as many think.

Betting odds on Bet365

The following paragraphs will dispel the myth that only a certain population can read the betting odds. It will also serve to understand betting concepts, and thus you can start in the world of gambling without any fear.

Example of betting odds: Chelsea Vs. Burnley with 1X2 (Where 1= home team, X= draw, and 2= away team) odds of:

  • Chelsea: 1.60
  • Draw: 3.05
  • Burnley: 4.50 

Do you know how to read what the odds above mean for this match? Read on; we provide all information you need in this sports betting odds guide.

What is Probability?

Betting odds on Bet365 #2

Probability has several synonyms throughout the world. They are also known as odds, betting lines, or probability. Any of the three names refer to the number bookmakers choose to determine which team is the favorite in a match and by how much.

This number is not determined by a computer but by a human with the help of data. This makes the game beatable. Those dedicated to creating the betting odds fail on many occasions, which opens the possibility of winning large amounts of money.

There are three types of betting odds or probability worldwide: the American, used in most American countries; the decimal, which is common to see in bookmakers in Europe; and the fractional, which is a simple alternative to the American.

How To Read Betting Odds

Odd is an assessment of the likelihood of an event. The probability of an event is between 0 and 1, which is generally multiplied by 100 to speak as a percentage.

In the case of sports betting, the bookmaker determines the probability of the various possible outcomes. This is why your analysis of the odds of a match is essential. You must associate a probability with your prognosis and compare it to the bookmaker following your event analysis.

It happens that the bookie offers you a bet too early or that you are more reactive than him to a piece of last-minute information. You will be able to estimate if the bookie has undervalued a market, and therefore a probability.

We then speak of a value bet, a boom for us bettors.

Example: After analysis, you estimate that Chelsea has about a 65% chance of winning, which would mean odds of around 1/0.65 = 1.53.

If the bookmaker offers odds of 1.60, we have a value bet, and if you bet INR100 on Chelsea to win, you’ll have a potential profit of INR60.

What Are Decimal, Fractional & American Odds? And How Do They Work? 

How Do Decimal Betting Odds Work?

Decimal odds are usually used in old content and are often preferred by most bettors. We will explain how the decimal betting odds work.

To determine how much money you will win for a bet of $100 on a decimal odds, you must multiply the bookmakers’ odds by your staking amount. I know that maybe you already lost interest at this point, and that is why the American ones are much easier to understand. However, look at the example to understand more easily.

  • NY Jets 2.40 | New England Patriots 1.61

The base bet will always be $100. In this case, if you bet $100 on either of the two NFL teams, you must multiply by the bookie’s odds to find out how much you will win.

  • NY Jets: 100 x 2.40 = $240
  • New England: 100 x 1.61 = $160

If the decimal betting lines seem a bit complicated to you, you can always choose any other options. Anyway, all bookmakers have automatic calculators when you place a bet, so they will immediately tell you how much your profit will potentially be.

How Do Fractional Betting Odds Work?

Fractional betting odds are used, in most cases, in future scenarios that define the outcome of a season or a team.

For example, let’s look at the betting lines to win the European Champions League:

  • Liverpool 4/1
  • Manchester City 5/1
  • FC Barcelona 5/1
  • Real Madrid 8/1

The numerator represents the number of times you will be paid a $100 bet. Liverpool, in this case, will pay you $400 for a bet of $100 if they end up winning the Champions League.

The same with Manchester City $500, FC Barcelona $500, and Real Madrid $800. The team that pays the least is the one with the best chances of winning the bet in the future, as it is considered the favorite.

If you have ever heard “Barca is the favorite to win the European title,” many of these statements are tied to what the bookmakers dictate.

Remember that you are not limited or forced to bet $100 on each bet. You can choose a larger or smaller stake according to your capabilities. The higher the stake, the higher the return, that is clear.

How Do The American Betting Odds Work?

American odds are presented in whole numbers, accompanied by positive (+) or negative signs (-). This is where most people get confused, but it is straightforward if you read the full explanation below.

The first thing you should know is that American lines have a standard number of $100. It’s about investing $100 or earning $100.

The team with the negative sign (-) will always be the favorite, and the number next to it will be the amount that must be staked to win $100.

For example, you find this odds in a bookmaker:

  • Chelsea -125 | Burnley +200 | Draw +100

According to the bets, Chelsea is the favorite team (it has a negative sign), and to win $100 with them, you must stake $125. The reason you have to put in more money than the $100 standard is precise that you are investing in the team with the best chance of winning.

It is a fair relationship with the betting house, and then, you enter the game with the advantage of supporting the one which, in theory, is better. If the bets do not vary in this way, we would have the whole planet betting on Barcelona and Real Madrid every week without consequence, winning tickets from top to bottom.

To clarify, if you win the bet of Chelsea -125, the bookie will pay you $100 and return the $125 you invested in Burnley.

The team with the positive sign (+) is considered the underdog. However, it does not mean that it does not have a chance of winning. In fact, being the underdog has a higher return on investment, which makes it a more attractive play.

Here is an explanation with the same example:

  • Chelsea -125 | Burnley +200 | Draw +105

The number next to the plus sign (+) indicates the money you will win for a standard bet of $100.

You choose Burnley +200 to win the classic against Chelsea. This means that if Burnley wins the match, you will win $200 for an investment of $100. As in the previous example, the bookmaker will pay you $200 and return $100 of the initial investment.

Note: The Draw is the third possible option in football, but it only happens in this sport. Leagues like the NBA and MLB do not offer the possibility of a tie because there is no such outcome in them. In the NFL, teams can tie, but sportsbooks don’t provide it as it is highly unlikely.

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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.

Comparing Odds

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.

For example:

  • 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.

Tips

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

Summary

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.

Frequently asked questions

Decimal, American or fractional odds: which is better?
When it comes to odds format, there is no right or wrong answer. It would help if you only used what is more familiar to you and easier to comprehend.
What should I do if the odds are in decimal and I’m used to fractional odds?
You may always use a calculator to convert odds. However, most online betting companies will provide you with this choice.
Why are decimal odds becoming more popular these days?
Traditionally, Indian bookmakers utilize decimal odds because they are more popular. This could be because calculating prospective winnings is easier for them. Alternatively, they are more widely employed in many parts of the world.

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