Sports Betting odds represent the two most important concepts that all bets are based upon. Odds tell you how likely it is that your bet will be successful, and what you can expect to get paid out should it be successful. When placing your first wagers, either through a mobile app like betmgm or fanduel, or a land-based sportsbook, reading and interpreting odds properly is going to be the very first step toward making smart bets.
The Three Main Odds Formats
There are three primary ways that odds are presented. Each one tells us the exact same thing; they just present it differently.
Decimal odds are primarily used throughout Canada and Europe. They provide the total amount of money returned per unit bet. A $10 bet at odds of 2.50 returns a total of $25 ($10 + $15) back to you. To find the Implied Probability of an event using decimal odds, simply take 1 and divide it by the decimal odds. Therefore, 2.50 implies there is a 40% chance of winning.
Fractional odds are still commonly found in the uk, and also in horse racing. As previously stated, fractional odds are expressed as x/y. The top number represents your potential winnings, while the bottom number represents your initial bet. A $10 bet at 5/1 will net you a total of $60 ($50 in profit + $10 in bet).
American odds use positive and negative Numbers. A positive number indicates that the odds are in favor of the favorite. A negative number indicates that the odds are in favor of the underdog. American odds are also referred to as moneyline odds. An example of this would be a line of plus 150. This means that if you place a bet of $100 and win, you will earn $250. An example of a negative number would be a line of -200. This means that if you want to make a $100 wager, you need to risk $200 in order to earn a $100 profit.
Building profit margins
While odds may reflect close to accurate probabilities, they never reflect true probability alone. All sportsbooks and casinos build a Margin, often referred to as the overround (or vigorish), into each sport and/or game played. This Margin provides the sportsbook or casino with a guaranteed mathematical advantage over time.
Casinos operate similarly. A roulette wheel that features a single zero has approximately a 2.7% house edge. Casino games like online slots have a published return to player (rtp) that generally range from 94-97%.
Implied Probability and value Betting
Implied Probability is the chances of an outcome occurring based on the odds being offered. By calculating Implied Probability, bettors can compare a bookmaker’s opinions versus their own. There are several formulas to calculate Implied Probability, but probably the easiest one to understand is for decimal odds: take 1 divided by the odds, then multiply by 100.
Value bets occur when bettors believe the true likelihood of an outcome happening is greater than the Implied Probability reflected by those odds. Using hockey as an example: if you think a particular hockey team has a 40% chance of winning, but the odds are listed as 3.00 – giving them an Implied Probability of 33.3%, then you may feel confident that you’re getting good value for your money.
