How do Betting Odds Work? The Complete Guide

Betting odds can be confusing for those who are new to the world of gambling. In this article, we will explain how do betting odds really work and provide a few examples to help you understand the concept. We will also discuss how to calculate your potential winnings when placing a bet.

Let’s get started!

How do Odds Work?

To put it simply, betting odds work by calculating how likely an event is to happen. This is usually done by using statistics and probability theory. Once a bookmaker has calculated these odds, they will then offer them to their customers.

So how do you know what the betting odds are for a particular bet? It can be a little tricky at first, but it basically boils down to how likely the bookmaker thinks an event will occur.

Say for example you want to bet on a football match between Manchester United and Liverpool. The odds of that happening might be given as 50/50 or one in two because the bookmaker thinks there’s a 50% chance of the match happening.

The bookmaker is betting on how likely it will be for an event to happen, which means that there are two possible outcomes: either United win or Liverpool wins (or if you’re a neutral fan – a draw). This makes predicting games quite tricky. However, we can use maths and statistics to help us out!

Understanding betting odds

Now that we’ve covered what betting odds are, let’s take a look at how they work. When you place a bet, the bookmaker will give you odds for each potential outcome of the event. These are expressed as either fractional or decimal odds.

When you see fractional odds, this shows how much money you would receive if you placed a $100 bet on that outcome. With decimal odds, the number shown means how much money you would receive on a $100 bet.

What is the difference between positive and negative odds?

Positive odds represent how much money you can win from a bet, whereas negative odds show how much money you need to stake in order to win $100.

Why are betting odds important?

Betting odds play an important role in the gambling world as they provide a way for bookmakers to communicate how likely they think an event is going to happen.

However, the odds that are on offer from a bookmaker will not always reflect how likely it is that the outcome of an event will occur, as the bookmaker may be trying to attract customers by offering more attractive odds on an event that they think is unlikely to happen.

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How to read odds

The most common way to express betting odds is as a decimal. This is how much you will win if you bet $100 (or your currency equivalent). So, for example, if the odds are decimalized at $11.00 then for every dollar you stake you will receive back $11 plus your original stake – giving a total return of $12.

Another way to express betting odds is as a fraction. The second number represents how much you will win plus your original stake, while the first number indicates how much you need to bet in order to make that return – again with this expressed as multiples of $100 (or your currency equivalent).

So using our same odds example, the fractional odds would be 11/100 which means for every $11 you stake you will receive back $12 (plus your original stake). 

Some punters might also see betting odds expressed as a percentage. This is how much money you will win on a winning bet as a percentage of how much you stake. So using our same odds example, if you stake $11 at the 11/100 decimalized rate then you will win $12 – which is 100% of your original stake.

How are betting odds used to calculate probability?

Betting odds are used to calculate how likely it is for an event to happen. You can do this by dividing one number by the other and multiplying that result by 100%. 

Betting odds will also tell you how much money you can win from placing a bet. These numbers can be displayed in different formats, but the most commonly seen ones are decimal and fractional. The first number indicates how much you would win on a £100 bet should your chosen outcome happen.

What are the different types of betting odds?

There are three common formats for displaying betting odds – fractional, decimal and American. The most popular format in the UK is decimal odds, whilst Americans typically use the Moneyline system. Fractional odds are mostly used in horse racing. Read on to see all sports betting odds explained:

Fractional betting odds

Fractional odds (also known as “British” odds, “U.K.” odds, or “traditional” odds) are most popular among British and Irish sportsbooks. They’re generally written with a slash (/) and are favoured by some of the world’s top bookies.

A fractional listing of 6/1 (six-to-one) odds would mean that you win $6 for every $1 you wager, in addition to your dollar back.

This is the amount of the profit over the original bet, which means that you will get your stake ($1) in addition to the profit ($6), resulting in a total payout of $7. As a result, if you wager $10 at 6/1 and win, your total return is $70 ($60 profit + $10).

Decimal betting odds

In continental Europe, Australia, New Zealand, and Canada, Euro odds (often known as “European” odds, “digital” odds, or “continental” odds) are widely used. These are a tad easier to use and comprehend. The figures of the favourites and underdogs can be seen immediately by looking at the numbers.

The decimal odds number indicates the amount won for each $1 bet. In this case, the number represents the overall payout instead of the profit. This means that if your stake is already included in the decimal number (there’s no need to add it back), calculating the overall payout is simple.

American betting odds

The moneyline odds (often known as American odds or “U.S.” odds) are popular in the United States. The chances for favourites are accompanied by a negative sign and indicate how much you must wager to win $100.

On the other hand, underdog wagers are accompanied by a plus (+) indication and show how much money is won for each $100 staked.

In both situations, the money won is returned in addition to the original wager. As the chance of winning for the favourite rises, the odds gap between the favourite and underdog grows.

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Let’s get Betting!

So, now you know how to read and understand different types of betting odds. This is an important skill for any punter as it will help you to identify good value bets and make the most out of your gambling activities. Remember, always gamble responsibly and never bet more than you can afford to lose!

For the best online betting odds, take a look at our list of the best sports betting sites in Canada!

FAQ

What does 3 to 1 odds mean?

If you’re looking at a betting slip and see odds of three to one next to a particular outcome, that means for every dollar you bet, you can win $3 plus your initial stake back. 

How to read odds in sports?

When you’re looking at betting odds, whether it’s in a physical form or on a website, you’ll see two numbers separated by a colon. The number on the left is how much money you need to bet in order to win $100 (or your currency equivalent), while the number on the right is how much money you can potentially win.

How do Vegas odds work?

When it comes to sports betting, bookmakers in Vegas use what’s called “the point spread” to even out the chances of winning for both teams involved in a game. This number is how many points one team is favoured to win by. So, if you see a spread of -14, that means the favourite is expected to win by more than 14 points.

How do betting odds work?

In essence, when you bet on an event, the odds are a way of quantifying how likely each potential outcome is. For example, if there’s a horse race with eight runners, the bookmaker might offer odds of three to one against any particular horse winning.

ABOUT AUTHOR

I am a psychologist working as a freelance writer. My texts mainly revolve around mental health, psychopathology, and psychotherapy. There are so many interesting things in this world, but to me being human and what it means to be a human are perhaps the most interesting questions of all. I’m also interested in history, philosophy, and geopolitics. It may not seem so, but these three fields work very well with psychology, if you have the right mindset.

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