Even though betting odds can seem confusing at first, knowing what chances your selections have of winning is crucial if you want to improve your betting success.
We’re going to explain each type of odds so next time you go to place a bet on your sports betting app you'll be sure you know exactly what they mean.
First, let’s see what betting odds even are:
Betting odds are the chances of events happening, and they’re compiled by bookmakers.
There are three main types of betting odds: fractional, decimal, and American.
In a nutshell, they represent different numerical formats for the same thing and make no difference in terms of payouts. Event predictions can be given in any of the three types of odds.
Understanding Fractional Odds
Fractional odds (or British odds) are the most commonly used odds, typically written with a slash or a hyphen. For instance, they can be written either as 5/1 or 5-1 and pronounced: “five-to-one”.
That said, if you have “five-to-one” odds of winning, it would mean that you’d get back your stake (for example, $1) and your stake multiplied by the odds as profit (in this case of $5) – $6 in total if you win the bet.
If you have odds aligned as follows – team X: 10/11, team Y: 9/5, and team Z: 6/1 – it’s easy to determine that team X is the favorite, while the remaining teams are thought to be less likely to win the game.
On the other hand, these odds mean that betting on one of the other two teams might bring a more financially tempting prize. With good reason – it’s less likely they’ll win. In other words, size up your chances before placing any money!
Understanding Decimal Odds
Decimal, or European odds, are usually easy to understand. Underdogs and favorites can be spotted instantly, just by looking at the numbers.
The logic is simple: The odds show every dollar won for every dollar invested, taking into consideration the total payout – stake included. To calculate your potential winnings, just multiply the stake by the odds.
For instance, if we have a bet like this – X: 4.0 and Y: 1.3 – you would get $4 if you bet $1 on X, and $1.3 if you bet on Y. Since the quota for Y is lower, we can deduce that Y is more likely to win.
Understanding American Odds
American odds are, obviously, popular in the United States. The odds for favorites are preceded by a minus sign, showing the amount you need to stake to win $100.
Underdog odds will have a plus sign in front of the amount, showing how much every $100 winning stake gets. Don’t worry – whichever team you favor, winning means you get back both the money you bet and the money represented in the odds.
For instance, if we have the odds X: +585 and Y: -760, those who place a $100 bet on X will get $685 in case they guess right, while those who bet on Y will need to bet $760 to win $100, for a total payout of $860.
How to use odds to calculate probability?
American odds are a popular way to express betting odds in the United States.
They can be either positive or negative, and the way they are interpreted depends on this sign.
Here's how you can calculate the probability from American odds:
Positive American Odds
For positive odds (e.g., +200):
Probability = 100 / (American Odds + 100)
Negative American Odds
For negative odds (e.g., -150):
Probability = -American Odds / (-American Odds + 100)
Examples
Positive American Odds (+200)
Using the formula for positive odds:
Probability = 100 / (200 + 100) = 100 / 300 ≈ 0.3333
So, the probability is approximately 33.33%.
Negative American Odds (-150)
Using the formula for negative odds:
Probability = 150 / (150 + 100) = 150 / 250 = 0.6
So, the probability is 60%.
Converting Probability to American Odds
For a probability greater than 50% (i.e., a favorite):
American Odds = - (Probability * 100) / (1 - Probability)
For a probability less than 50% (i.e., an underdog):
American Odds = ((1 - Probability) * 100) / Probability
Wrapping Up
Now that you know how betting odds work, you’ll be able to make more shrewd betting decisions, and possibly even have better luck in your endeavors.
Make sure to use a safe and legal sports betting site or app that offers fair odds, we've written comprehensive guides for both:
