How Do Betting Odds Work?
Odds refer to the likelihood of winning. For example, someone may tell you that your odds in a lottery are one in a billion. What this means is that out of a billion possible outcomes, you only have one chance of winning.
Betting odds do not work this way. If you go to an online bookmaker, you will realize that odds work differently. Read on to make it clear.
The Three Types of Betting Odds
First, you have to know that there are three ways that odds are shown. The first is called fractional, the second is decimal, and the third is Moneyline.
- Fractional – British
- Decimal – European
- Moneyline – American
There is no difference in how the payouts are calculated. These three types are only different in how the numbers or the odds are presented. It also means that the probability is the same, no matter what type of betting odds is used.
Fractional odds are also called traditional. Typically, they are written with a slash symbol (/). Sometimes, betting kiosks and online bookies use a dash.
An example is the odds that say “6/1” or “6-1”. What it means is that you would win $6 for every dollar that you bet. If you wager $2 and your chosen team wins, your prize will be $12. The prize of $6 in this example is in addition to the wager you placed. So, overall, you will get back $7. In this case, the profit is $6 out of your investment of $1.
Take a look at the examples of odds of who will be the NBA champion for the current season:
- Cavaliers – 10/1
- LA Lakers – 10/11
From these numbers, you can see that the LA Lakers team is heavily favored, which means that the sports bookies “believe” that they are really going to win. If you bet $11, you will get it back and win an extra $10, provided that the Lakers become champions.
Now, if you place a wager on Cavaliers, you will get paid $10 for every $1 you bet. If they win, you will get back your $1 and then receive an extra $10. The thing is that they are not really likely to win, and this is why the bookmaker is willing to risk paying you $10 for your $1.
The other names that this goes by are digital, continental or European odds. They are mostly used all over Europe, Australia, Canada, and New Zealand.
The numbers tell you how much money you could win for every $1 you bet. However, the money shown is the total payout, not the profit. Your stake is already included in the payout.
Here is an example:
- Donald Trump: 5.00
- Joe Biden: 2.3
If you wagered $1 that Trump would win the election, and he did, you would get back $5. Your profit is $4 only because the $5 already includes the $1 you invested.
If you wagered on Biden and placed a bet of $1, and he won, you would receive $2.30. Your profit is $1.30 only. As you can see, Biden was the favored candidate. Bookmakers believed that he would win, so they did not want to risk a lot of money.
The last type is also called US odds. In this presentation, you will see a positive or a negative sign (-/+). The favorites or those that the bookie believes will win have a negative sign. The underdogs have a positive sign.
- For a negative sign, it indicates the amount of money you need to stake to win $100.
- For a positive sign, it indicates the amount of money you will win if you wager $100.
Here is an example:
- Trump: +580
- Biden: -700
In this case, you needed to bet $700 on Biden to win $100. As you can see, it is not a good bet. You were to betting $700 to win $100. The reason behind this is that the bookie really thought that Biden was going to win.
For Trump, you had to bet $100 if you wanted to win $580. Pretty much, you quadrupled your money. However, the chances that Trump would win were also low.
Now that you know how to read betting odds, you can put it into practice. Go to online betting sites and read the odds. From there, you will be able to figure out if betting is worth it or not. You will also understand if one player or one team is heavily favored over the other. Good luck!