How Betting Odds Work
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The betting odds are probably one of the most popular parts of gambling, so much so, that 'odds' have become a household term. Have you ever wanted to truly understand how odds work, though? That's right, despite the fact that the term 'odds' is being used vastly in our daily lives, the majority of people really don't know how the betting odds work. As part of our Betting Guide series, here we will explain in great detail how the odds work, how one can take advantage and what's the difference between 'betting odds' and 'betting lines'.
In the simples form of speaking, betting odds are the probability of an event correlated to a wager (also called a 'bet'). Right away one must realize the difference between simple probability of an event to happen (or not), which is usually expressed as 'percentage', i.e. '50% chance of the event occurring' vs. the betting odds, which are always correlated to a wager, i.e. 2/1 or 'will pay two for every 1 wagered if the event happens'.
Why is this part so important? Because one must adjust their way of thinking if they plan on engaging into sports betting. If we take a simple example, a flip of a coin will yield tails 50% of the time, that's simple math, but there is no math when two football teams meet on the field and the odds are set. Every sportsbook will most often post different betting odds, based on many factors which influence the decision of the odds maker, i.e. a guy working for the sportsbook setting the odds for the event. So 2/1 odds for one team and 4/1 for the other doesn't mean that the first team has 50% chance to win the game, but that the sportbook believes that the team is more likely to win the game and will pay out $2 for every $1 wagered on that team. Bottom line in understanding how odds work here is that: odds are not simple probabilities, but a payout on a wager.
Now that we've understood the most basic part about sports betting odds, time to move on to the most important part - reading the odds, i.e. what the odds numbers mean. There are three types of betting odds: American odds (lines), fractional odds and decimal odds ( also called 'European odds' or'coefficient'). The American and fractional odds are the two types of betting odds one is most likely to encounter in the USA, especially when betting online, although most online sportsbooks will give you the option to set the odds to be expressed in any way you want. Let's take a closer look at each type and how the odds work:
Understanding how betting odds work is crucial for success in gambling, whether you want to win at slots or place bets on sporting events. By knowing the odds of potential bets you can calculate your expected winnings and build an entire strategy for a successful session. You can work it out by dividing one by the decimal odds. Let’s say the bookies give Stoke City odds of 2.5 (3/2) for winning a match against Huddersfield Town. Divide one by 2.5 to get the probability, which is 0.4 or 40%. If you put £10 down on Stoke to win, you stand to gain £25 including your £10 stake.
American Odds: Called this way because this form of betting odds is used exclusively in the United States. Another term for American odds is 'line' or 'betting line', which has been misused a lot, but we will get to this a bit later into our article. The form American odds (or lines) take is a plus '+' sign or a minus '-' sign in front of a number. For example, the line on the New York Giants to win the game against the Green Bay Packers is '-150', while the odds on the Packers to win are '+230'. Here is the simplest way to read the betting odds from this example, which also covers the American odds in general: If there is a minus sign in front of the number, the number indicates how much you have to wager to win $100, while if there is a plus in front of the number, the number itself indicates how much you will win if you bet $100. As you can see there is a clear difference in reading odds with minus sign (favorite) and plus sign (underdog).
As an exercise, let's take the odds from the above example and read them. The -150 on the Giants means that the bettor will have to bet $150 to win $100, i.e. if you have $150 in your bookmaker's account and you bet them all on the Giants, after winning you will have the total of $250 in your account ($150 wager + $100 winnings). The +230 odds on the Packers on the other side show that if a bettor wagers $100 on Green Bay, the winnings will be $230. If your sportsbook account had only $100 and you bet them on the Packers and they won, your bankroll will be total of $330 ($100 wager + $230 winnings). What if you bet $150 on the Packers odds? Then you will win $345 for a total in your player's account of $445.
Fractional Odds: These are the most popular form of odds and unless you've lived under a rock you've heard someone mention fractional odds. Naturally they are expressed as a fraction of two numbers, for example 2/1, which should be read as 'two to one' and means that the sportsbook will pay 'two' to every 'one' bet by the customer. Clearly these are the easiest odds to read and understand how odds work - the 'first number' (in our case '2') shows how much the sportsbook will pay for every 'second number' (in our case '1') wagered. So, if the sportsbook says that Boxer 1 has 3/1 odds to win against Boxer 2, it means that for every $1 bet by the customer the bookmaker will pay $3. Keep in mind, however, that the $3 will be the total payout, i.e. you would actually make only $2 profit. Let's have a real money example to better understand the correlation. Imagine you have $10 in your sportsbook account and you bet them all on Boxer 1 to win the match at 3/1 odds. If this happens, your account will be credited back with only $30 ($10 wager and $20 winnings) and NOT with $40 ($10 wager + $30 winnings). Luckily, this is the only iffy aspect of the fractional odds.
Decimal Odds: Also called European odds or referred to simply as a coefficient in some parts of the world, the decimal odds are the easiest to work with. These odds take the form of a simple decimal number, for example 1.25, which is simply multiplied by the wager to give you the total for the bet (winnings + wager). Often used in Europe and Asia, an example would be a 2.45 odds on a soccer team to win the game. If you bet $100 you simply multiply it by the odds, i.e. 2.45x100=$245 or in other words, $100 wager + $145 winnings.
And there we have it about how odds work. After reading this you should not only understand how odds work, but be able to perform simple winnings calculations with the betting odds at the sportsbooks. As always, we welcome feedback and if you have an idea how we could improve our guide to how the betting odds work, you are more than welcome to contact us below. And don't forget to bookmark this page for a quick reference when you need it.
Kansas City Chiefs (-250), Las Vegas Golden Knights (-110), Toronto Raptors (+125) – the chances are that you’ve come across these sorts of options in your sports betting journey. If you don’t know what these numbers mean, you’re not the only one.
A large number of betting newbies have no idea what the figures are representing. If you want to learn, you’re at the right place. We’re now going to show you how Vegas odds work. We will also explain the process of making the odds. We’re even going to show you how to use this knowledge to your advantage.
What Are Vegas Odds?
Vegas odds a.k.a. American-style odds are the ones you will see in the land-based sportsbooks across Nevada. Caesars, Wynn, Golden Nugget – all these bookies are using the Vegas odds format.
The trouble is that they may seem strange to the inexperienced eye. However, everything becomes clear once you learn more about them. So, how do Vegas odds work?
These odds come in the form of three-digit numbers, which can either be positive or negative. If the number is negative, it means that the team is the favorite. If it’s a positive number, it’s the opposite. If the number on each potential outcome is -110 (or sometimes -105), it means that each team has an equal chance of winning.
The big question is how can you use these odds to figure out how much money you’re going to cash in if your bet wins? That’s the question we’re going to answer next.
How You Calculate Vegas Odds?
You calculate your potential win based on whether the odds come as a positive or a negative number. If the odds are positive, e.g., +150, it practically means that this is how much you can profit if you bet $100.
Let’s say you want to bet Justin Gaethje at Vegas odds of +150. If you put, $100, you’re going to make a net profit of $150 if he wins. But, what if you’d like to bet a different amount?
In that case, you need to use the following formula:
Vegas Odds/100 x Your Stake
So, let’s say you wish to put $70 on Gaethje, your potential net profit is calculated by dividing his odds by 100, then multiplying the number with 70.
Use your calculator and you will see that 150/100 x 70 equals 105. That is how much you will make if Gaethje wins. Note that $105 is your net profit, while you’ll also get your $70 stake back. So, your total win would be $175 on a $70 bet.
An important thing to remember is that the aforementioned formula only works if odds are displayed as positive numbers. If the number is negative (e.g., -150), you need to go with a different formula. In that case, this is what you got to use:
Your Stake/Vegas Odds x 100
This is because, with Vegas odds, the negative number represents the amount of money you need to bet in order to win $100. So, if the odds are -150, you will have to bet $150 to get a net profit of $100.
Is There a Simpler Alternative?
Vegas odds are traditionally used in land-based sportsbooks across Nevada. It’s been like that for decades, and when online sports betting became legal in other US states, most operators decided to embrace this format.
The same was the case with offshore sportsbooks that cater to American customers, with one important difference – BetOnline.ag, MyBookie.ag, SportsBetting.ag, and many other bookies let the players decide on the odds format.
So, if you find Vegas odds too complicated, you can always use decimal odds in offshore sportsbooks. How they work is that your stake is multiplied by the odds. The result you get is your gross profit (your net profit + your stake). For example, if the odds on Tampa Bay Buccaneers are 1.65 and you wish to bet $90, your potential win is $148.5.
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Who Sets the Odds in Vegas?
When speaking about Vegas odds, there’s another question that pops out – who decides them? Some sportsbooks employ teams of oddsmakers to come up with the odds, while some hire independent companies to do the work for them.
In both cases, the goal is to set the odds in such a way that they attract equal action on both outcomes. This way, the sportsbook is going to make profits regardless of the outcome. As a result, the Vegas odds on the favorite are always negative numbers, while underdogs get positive numbers.
Oddsmakers take into account various factors to decide who’s the favorite/underdog. What we’re talking about are power rankings, game locations, the form of the teams, and so on. However, this doesn’t necessarily mean that Vegas odds equal the true probability.
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Using the Odds Knowledge to Your Benefit
How Betting Odds Work Uk
The thing about odds is that they change all the time. For example, there might be some big news coming from a team’s roster, such as an injury of a key player. You can be sure that the sportsbooks will adjust the odds in that case in order to protect themselves.
How Betting Odds Work Football
Still, the #1 reason why odds change lies in the behavior of the bettors. If the players suddenly start betting on one outcome, the sportsbook will have to react by adjusting the odds. They will move the odds on the outcome in question (e.g., from -128 to -175), while moving the odds against the opposite outcome (e.g., from +108 to +155).
How Betting Odds Work +
This way, they are making sure they aren’t going to have to pay out too much money if the favorite wins. At the same time, they are encouraging bettors to put their money on the underdog with the odds more lucrative than earlier.
How can you use this knowledge to your benefit? You can go on an odds hunt. If you compare all the odds available, you will be able to find the best value for your bets. It may be at a Vegas-based sportsbook or it could be at an offshore website, you’ll find out only after you’ve compared them!