Betting Odds Explained - How Do Betting Odds Work? - Ultimate Guide
All you need to know about betting odds including the various formats they can be displayed, commonly used terminology and more.
Betting Odds Explained – How Do Betting Odds Work?
Understanding betting odds is extremely important and is one of the first things you should learn when entering the gambling world. By doing so, not only will you be able to identify how likely an outcome is to happen, but also how to calculate the return value for a given stake.
What Are Betting Odds?
Betting odds are used to express the likelihood of a given outcome occurring and allow you to determine the expected return from your stake should the predicted outcome become a reality.
There are three different ways that betting odds can be displayed.
Fractional Odds Explained
Favoured by bookmakers in the UK and Ireland, fractional odds quote the amount that will be paid out, should the bet win, relative to the stake.
Example: For odds of 2/1, for every £1 you place, you will make a profit of £2 (should the bet win) meaning the total return would be £3.
Decimal Odds Explained
Decimal odds are popular with many punters because they are easier to work out.
They are favoured by bookmakers in continental Europe, Australia, New Zealand and Canada, decimal odds quote the exact amount that will be paid out, should the bet win, including the stake.
Decimal odds are most common on betting exchanges, but all leading online betting sites allow you to view betting odds in this format.
Example: For odds of 5.0, for every £1 you place, you will receive a total return of £5 (5.0 x £1).
If you want to convert fractional odds into decimal odds and vice versa then you can use our odds conversion calculator.
American Odds Explained
Favoured by American bookmakers, American Odds can be either positive (+) or negative (-).
- A negative number shows how much you have to stake in order to achieve a profit of $100.
Example: For odds of -150, you would have to stake $150 to get a $100 profit.
- A positive number shows how much profit you will make if you stake $100.
Example: For odds of +150, if you staked $100 then you make $150 profit.
Fractional Odds v Decimal Odds
The key difference between the two formats is that decimal odds account for your returned stake to give you your ‘total winnings’ whereas fractional odds do not and only give your potential profit.
Although there is no ‘right’ format to use, there has been a definite upward trend towards the use of decimal odds, for both bookmakers and punters. This is likely to be because they are easier to understand.
Ultimately, it comes down to individual preference and what you are more comfortable with.
Odds are expressed in the for of ‘X’ to ‘Y’ where X and Y are numbers. The word ‘to’ is most commonly replaced by either a slash or hyphen although occasionally you may see a colon. For example, 3/1, 3-2 and 3:1 are all interchangeable.
When the probability of an outcome occurring is greater than 1/1 then this is often referred to as ‘odds against’. In other words, when the potential profit from a bet is greater than the amount staked.
‘Odds on’ is the opposite of ‘odds against. When the probability of an outcome is less than 1/1 then this is often referred to as ‘odds on’. In other words, when the potential profit from a bet is less than the amount staked.
When the probability of an outcome occurring is exactly 1/1 then this is often referred to as ‘Even Money’ (also known as ‘EVENS’ or ‘EVS’. In other words, when the potential profit from a bet is the same as the amount staked.
Bookmakers use betting odds to translate the probability of a given outcome occurring into a more usable form in order to offer betting.
Grasping this concept will lay the foundation for your betting knowledge and can help you be a more successful bettor.