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How do sports betting odds work?

We all love participating in the thrills, spills and drama of our favourite sporting events. But if you’ve always wanted to add a little spice by betting on the outcome of a match, race or fight it can be frustrating if you’re not sure where to start. Sure, you could go in blind. But you’re savvy enough to know that though there’s always an element of chance at play, the more you know when betting the better.

With that in mind, you might have a vague idea what seasoned sports bettering enthusiasts are talking about when they mention “the odds” but you may need to learn a little bit more before you feel comfortable having a flutter yourself. And if you have always felt a little insecure about your ability to read betting odds you might not feel comfortable asking your more seasoned friends to explain it to you.

Fear not, dear reader. Here we’ll explain the basic things you need to know about sports betting odds so you can place your bets with confidence and hopefully come out a winner!

What is a probability?

When you walk into a bookmakers or hang out with people who do a lot of sports betting you’ll most likely hear a lot of talk about probability or implied probability. But while you may have a pretty good idea of what this means in general terms, what does it mean in terms of sports betting or how to bet on sports?

An implied probability is the likelihood of a particular outcome as suggested by the odds (e.g. a horse, team or fighter winning). To figure out a probability you need to convert the decimal odds (don’t worry, we’ll get to those shortly) into a percentage indicating the likelihood of that outcome against another outcome. So in its simplest term, there might be a 60% chance of your team winning which leaves a 40% chance that they lose (the only other available outcome).

Implied probability can be very helpful when placing a bet because if your estimated probability of an outcome is different to what your bookie says, you should consider adjusting your bet accordingly. Let’s say, for example, that you’re betting on a Manchester derby. Let’s say that you calculate that there’s a 60% chance of Manchester United winning. If the odds offered by the bookmaker have an implied probability of between 52-55% that’s likely to be a good bet.

What are American odds vs decimal odds?

The waters are muddied a little by the fact that, depending on where you place your bet, the odds might be expressed in different odds. Whether you place your bet with a UK bookmaker or via a website or app you may find that they use either fractional, decimal or American odds.

While the odds will be the same and calculated based on the same factors, the way in which they’re presented will be different.

Decimal odds are used throughout Europe as well as Canada and the land down under. They’re also the easiest to understand so if you’re new to betting you can get off to a nice easy start. Just to be confusing, however, you may also hear them referred to as European odds.

Calculating your payout with UK odds

Fractional odds quote the net total that will be paid out you if you win relative to the stake you put down. So, let’s say you bet £20 on a horse with odds of 5/1. This would be expressed decimally as 5.0. If the horse wins you’ll get 5x20 or £100. Plus your original £20 stake which makes £120. If those odds are reversed, this would be expressed decimally as 0.2 meaning that you’ll get £1 back for every £5 you bet, so you’d get back £6.

American odds- American odds are expressed in a slightly more complicated way. You’ll usually see a three figure number with either a + or a - indicating whether the team or sportsman you’re betting on is a favourite or an underdog.

Calculating your payout with American odds

Let’s say you’re in the states and you feel like betting on an NFL game. You see that the Atlanta Falcons are -110. The three figures indicate the stake you would have to place to win $100. So, if you place your bet of $110 and they win, you’ll get your $100 plus your $110 back with a total payout of $210.

A + however indicates and underdog and so things work a little differently. Here the numbers indicate the figure that you’d win if you were to bet $100. So, let’s say you want to place another bet on the Denver Broncos who are placed at 220+. In this instance you’d get your $100 stake back plus the $220 for a grand total of $320.

Vegas betting odds

Finally, you may also see Vegas betting odds which many bookies use as their benchmark. After all, Sin City is the home of betting, right? You might see Vegas odds used all over the world as a sort of universal language of betting odds.

How to calculate implied probability

So, how can you use these different odds to calculate the implied probability of the outcome (and, of course) your payout. It can be tricky, but the general formula is;

Stake / Return = Implied Probability

This is easier to calculate with decimal odds rather than american odds as american has positives and negatives. To keep things simple, let’s say we have a £100 stake betting on the Atlanta Falcons who, as above, are listed as favourites.

£110 is our stake and our £100 winnings make £210. If we divide this by our stake (£110) we get 0.523 which expressed as a percentage is 53.2%.

Let's do the same with our underdogs the Denver Broncos. We take our £100 stake and divide it by the overall potential reward which is £320. That would be 0.31 or 31%. Again, if your implied probability is higher this can make for a good bet.