Knowing exactly how betting odds work is a key factor you need to know in order to bet successfully, with it definitely being worth taking your time to get yourself clued up on the ins and outs of betting odds.
The odds themselves are used to show exactly how likely a certain outcome is to happen in the eyes of the bookmakers, with the odds also used to show how much you stand to win if your bet’s successful.
Betting odds can be somewhat difficult for newcomers to understand, which is why we’re here to offer up our comprehensive guide on how to understand betting odds.
What are betting odds?
Betting odds are used by bookmakers as a way to represent the likelihood of something occurring.
They are also used to signify how much players can potentially win if they bet on a certain market.
Low odds signify that an outcome is likely to happen in the eyes of the bookmaker, with high odds implying that the outcome is less likely to happen.
All UK bookmakers will display their odds as fractional or decimal, with this being the case for all of the sports they offer markets on.
What is probability?
Probability is how likely or unlikely it is for an outcome to occur. If an outcome has a low probability, then it is less likely to occur, whilst if an outcome has a high probability, it is more likely to occur.
For example, if someone was asked to choose a number between 1-10, with you then tasked to guess which number they’ve chosen, you have a 10% chance of getting it right, as there are 10 possible outcomes/numbers to choose from.
However, if you had to guess whether the person has chosen an even or an odd number between 1-10, you’d have a 50% chance of getting it right as there are only two options to choose from.
Bookmakers use probability to influence their odds, with the bookies then using this information to decide the price of each market.
How to use odds to calculate probability
Probability can be calculated via the odds of an outcome happening, with you being able to use probability to work out how likely an outcome is to happen.
Fractional odds are the most common type of odds you’ll come across in the UK, with these being used by almost all top UK bookmakers.
The formula to work out probably can be written as: Probability (%) = B / (A+B), thus for the below examples, we’ll be replacing both A and B with numbers to make the examples easy to understand:
- 9/1 becomes 1 / (9+1) = 0.10 - There is a 10% chance this will happen
- 4/1 becomes 1 / (4+1) = 0.20 - There is a 20% chance this will happen
- 1/1 becomes 1 / (1+1) = 0.50 - There is a 50% chance this will happen
- 1/4 becomes 3 / (1+3) = 0.75 - There is a 75% chance this will happen
Decimal odds are also used by UK bookmakers, however they’re less popular than fractional odds.
Probability can be calculated by replacing the numbers with letters, similarly to fractional odds, with the formula for this being: (10 / A) /10 = Probability.
The below examples can be used to help understand how decimal odds can be used to work out the probability of an outcome occurring:
- 10.00 becomes (10 / 10) / 10 = 0.1 - There is a 10% chance this will happen
- 5.00 becomes (10 / 5) / 10 = 0.2 - There is a 20% chance this will happen
- 2.00 becomes (10 / 2) / 10 = 0.5 - There is a 50% chance this will happen
- 1.25 becomes (10 / 1.25) / 10 = 0.8 - There is a 80% chance this will happen
How to read betting odds
Odds can be used by players to work out the profits you’d make from a winning bet, with you able to do this, for both fractional and decimal odds
For fractional odds, if the odds are displayed as a top-heavy fraction, such as 10/1, this is an ‘odds against’ bet, with the probability of this occurring being low.
If the odds are displayed as a bottom heavy fraction, such as 1/2, this is an odds on bet, with the probability of this occurring being high.
When using fractional odds, you can work out your winnings by just using the numbers included in the fraction.
The first number of the fraction indicates how much profit you would make if you staked the second number of the fraction.
- At odds of 10/1, a £1 stake = £10 in profit + £1 stake = £11 returned
- At odds of 5/2, a £2 stake = £5.00 profit + £2 stake = £7 returned
- At odds of 1/2, a £1 stake = £0.50 profit + £1 stake = £1.50 returned
Decimal odds are also fairly easy to work out, with you just needing to multiply the odds by your stake to work out your winnings.
- At odds of 11.00, a £1 stake = £11 returned (11 x 1)
- At odds of 2.50, a £2 stake = £5.00 returned (2.5 x 2)
- At odds of 1.50, a £1 stake = £1.50 returned (1.5 x 1)
How do fractional odds work?
Fractional odds are the most popular in the UK and are used by most bookmakers, with it proving to be fairly easy to understand how fractional odds work once you’ve got used to using them.
Fractional odds are used to show how much you can win when you stake a certain amount, with.
The numerator of the fraction shows how much you stand to make as profit should you stake the denominator.
You will also have to add your stake back into the final amount to work out how much you’ll be returned in total.
For example, a bet with odds of 7/2 will return £4.50 from a £1 stake, as 7/2 x £1 = £3.5, with you then needing to add your £1 stake back onto this.
They can also be used to show the probability of a bet, with top heavy fractions being less likely to occur, whilst bottom heavy fractions are more likely to happen.
A bet with odds of 9/1 odds has a 10% probability of occurring, whereas a bet with odds of 1/2 has a 50% probability.
How do decimal odds work?
Decimal odds are less commonly used in the UK, however they do prove to be much easier to understand.
The number itself shows the amount your bet will return for every £1 staked, as well as the probability of the outcome occurring.
To work out your potential returns, all you have to do is multiply your stake by the decimal odds, with your stake then automatically being included in this total payout.
For example, if you stake £1 on a bet with odds of 5.00, this would return £5, whilst if you stake £2 on a market with odds of 1.75, this bet would return £3.50.
If the odds for a market are priced above 2.0, this implies that the bet is odds against, whilst if the odds are below 2.0, the bet is odds on.
How do American odds work?
American odds are available with most UK bookmakers, however they are not commonly used.
American odds are displayed with a + or - sign to indicate if the bet is odds against or odds on.
The best way to understand this is: if the odds of a bet are accompanied by a positive sign (+), the bet is odds against.
Alternatively, if the odds of a bet are accompanied by a negative sign (-), the best is odds on, with the further away the number is from 100, the more/less likely it is to happen.
For example, if Manchester are playing Man City, and Man United are +250 to win the game, these odds imply that they’re the underdog, whilst Man City, whose odds are -170 in this example, are the favourites.
The odds of +250 imply that for every £100 staked, you will make £250 profit, with your bet returning £350 total as this includes your original £100 stake.
Man City’s odds of -170 shows you how much you need to win to turn a £100 profit, with this example needing you to stake £170 to make £100, with the total returns for this bet being £270.
How do odds work summary
That's our complete guide on explaining betting odds and how they work, helping you know exactly why bookmakers use odds, as well as how to use odds to work out probability.