How Do Betting Odds Work? – 2024 Guide to Understanding Odds

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Written by Adam Haynes

Updated: 05:07 am EST, 11/07/2024

Our guide to how do betting odds work explains everything you need to know about the subject. To achieve long-term success with your wagers, understanding betting odds is essential. Our experts break down how lines and prices are created, different odds formats, implied probability, and everything in between.

How do Odds Work in Betting?

Sportsbooks use odds to express the likelihood of an outcome occurring. For example, who wins between two teams in the Super Bowl. Displayed numerically, lower numbers next to a market represent a higher probability of a favorable outcome for that bet, while higher odds indicate a lower probability.

One of the main tenets of sports betting is implied probability. As such, top online sportsbooks use this concept to articulate the likelihood of a bet being successful.

Implied probability applies to all types of odds and lines, converting odds to percentages. For example, a 50% implied probability corresponds to Evens (+100), while a wager with an implied probability of 16.7% works out at +500.

Betting sites operate as businesses that ensure a profit from each bet taken. For this reason, implied probabilities for both “to win” wagers in a game will add up to more than 100%, which is something arbitrage betting fans look to exploit. Oddsmakers factor in the vig, also known as the “juice,” or “margin” – this is a small percentage taken on each bet. Unlike a coin flip, which has a 50/50 probability, odds might be adjusted to -110 for both outcomes to account for the vig.

You may also encounter odds expressed in different formats. The three main types are American odds (also known as US or Vegas odds), decimal odds, and fractional odds formats. We discuss different formats and implied probability in more detail below. Essentially, this is how betting odds work explained in simple terms.

How to Read Odds in Different Formats

The three types of betting odds used at online betting sites are in American, fractional, and decimal formats. Some sites, like BetWhale, also offer Hong Kong and Indonesian formats. US odds are pretty much the default option at offshore bookies for US players, while many European and Australasian punters use decimal. Fractional formats are typically preferred in the UK and Ireland.

How do American Betting Odds Work?

Approach a sportsbook in Vegas and ask what are betting odds for any event – you will be provided with prices in the American betting odds format. Commonly known as US / money line odds, they are plus and minus betting options, or positive and negative odds.

  • Positive / Plus Odds (+): American odds with a positive sign next to them indicate how much profit you can win from a $100 wager. For example, a $100 wager at +400 returns $500 ($400 in profit and your $100 stake).
  • Negative / Minus Odds (-): A strong favorite in a game or fight is generally assigned minus odds. The number after the odds indicates how much you need to stake to win $100. For instance, -320 requires a $320 stake to win $100 profit.

Understanding US odds is usually as simple as remembering the $100 stake rule. But it also pays to know the formulas for positive and negative odds.

Positive Betting Odds Formula

Negative Betting Odds Formula

If you are staking less than $100, bet calculators can help with understanding betting odds. But our recommended offshore sportsbooks calculate payouts when you input your stake.

Fractional Odds Explained

The standard format used in the UK and Ireland is fractional. You will find this odds format everywhere from online bookmakers to horse racing meets across both islands. Nevertheless, they can sometimes look tricky – so, here’s a simple formula involving a numerator and denominator for working them out.

Fractional Odds Formula

To help you further, here’s a table showing the profit made on different stakes against fractional odds.

Odds Numerator Denominator Profit Made on a $100 Bet
13/2 13 2 $650
6/1 6 1 $600
9/2 9 2 $450
2/1 2 1 $200
1/2 1 2 $50
8/13 8 13 $61.54

Using fractional odds when betting in the US is rare. But if you are in Britain or Ireland, for example, this knowledge may come in handy.

Understanding Decimal Odds Format

We understand why some learning how do betting odds work in the decimal format prefer to stick with them. In short, they are just as simple – if not even more so – than their American or fractional counterparts.

Here’s the formula for working out decimal odds.

Formula for Decimal Odds

The formula for decimal odds is decisively simpler than with the other two main types. This is one reason it is often the default option for both American and fractional formats at online sports betting sites.

Different Types of Betting Odds Compared

Here’s how odds look when converted to different formats.

American Odds Decimal Odds Fractional Odds
-450 1.22 2/9
-275 1.36 4/11
-140 1.71 5/7
-105 1.95 20/21
+120 2.20 6/5
+200 3.00 2/1
+400 5.00 4/1
+500 6.00 5/1
+1200 13.00 12/1
+2500 26.00 25/1

Knowing how to convert odds in different formats is not essential. Offshore bookies often allow you to switch between odds formats. If not, you can use free online software or calculators. Alternatively, acquiring as much knowledge as possible is never a bad idea.

Converting Odds to Winnings – Examples Using a $100 Wager

Online sportsbooks calculate potential winnings when you input your stake, displaying how much profit you stand to win. Rather than relying on that, we explain how do odds work in sports betting with some $100 wager examples. Additionally, we use the formulas from the previous section to convert odds to winnings.

San Franciso 49ers to Win the Super Bowl

This football futures market pays out at +550 in US odds. A good visual representation showing the total returns from a $100 wager may help.

Odds Format Odds Payout for $100 Bet
American Odds +550 $650 ($550 profit + $100 stake)
Fractional Odds 11/2 $650 ($550 profit + $100 stake)
Decimal Odds 6.5 $650 ($550 profit + $100 stake)

A successful $100 stake returns $650. This is comprised of your profit and your stake – assuming it is not a free bet where the stake is not included in returns.

Given this, we should also note that American and fractional odds rely on multiplying the $100 stake by the odds – and subsequently adding the stake – to arrive at the total payout. Decimal payouts are even easier as stakes are already included in the odds number, meaning you can simply multiply $100 by 6.5.

Boston Celtics -7.5 Point Spread

In this hypothetical scenario, the Celtics head west to face the Indiana Pacers. You’re betting on them beating a 7.5-point spread at fractional odds of 4/7.

Odds Format Odds Payout for $100 Bet
Fractional 4/7 $157.14 ($57.14 Profit + $100 Stake)
American -175 $157.14 ($57.14 Profit + $100 Stake)
Decimal 1.57 $157.00 ($57 Profit + $100 Stake)

Decimal odds are usually rounded up or down depending on how they relate to the rough fractional equivalent price. In this case, payouts from decimal odds are $0.14 shorter for every dollar staked.

Shakur Stevenson to Win His Fight

In this example, Shakur Stevenson is 2.5 in decimal odds at boxing betting sites to move up in weight and beat the champion. Here’s how to work out total payouts across the three different odds formats.

Odds Format Odds Payout for $100 Bet
Decimal 2.5 $250
American +150 $250
Fractional 6/4 $250

Working out positive odds is typically more straightforward. However, using the right formulas makes converting odds into payouts takes away any headaches.

How to Choose Odds and Place a Bet Online

You can find sports betting odds by signing up for a top offshore bookie. The registration process takes around five minutes from picking your site to being ready to place your initial wager. Follow these five steps to get started.

1. Sign Up for an Offshore Sportsbook

Choose the site you want to bet with and hit the “Join” (or equivalent) button to get started.

2. Complete the Online Form

Here’s where you provide basic details such as your name, email address, telephone number, and zip code.

3. Claim Your Sportsbook Bonus

All of our top-ranked online sports betting sites provide a welcome offer for new customers – some have different ones to choose from!

4. Deposit Funds

Choose your payment method from the list of options available – this usually includes cards, cryptocurrencies, and a couple of others.

5. Find Your Betting Odds

If you want to bet on football, horse racing, basketball – or most other popular sports – you should find the odds to make it happen.

Betting Odds and Probability Explained

Probability is the fundamental principle used to set odds in sports betting. Above all, oddsmakers can’t predict the future, so assessing potential outcomes relies on analyzing what they do know.

For instance, by evaluating one football team’s recent performances and NFL news, injury reports, and influential players against another, they can estimate a probable outcome. By using this simple formula, you can, too.

No one game, fight, or event is the same as another. However, the implied probabilities and their relationship to the odds will be consistent. Although subject to price fluctuations, a horse running in the Kentucky Derby as a -325 favorite carries an implied probability of 76.46%. Here are some other examples using different odds.

American Fractional Decimal Implied Probability
-500 1/5 1.20 83.33%
-200 1/2 1.50 66.67%
-125 4/5 1.80 55.56%
+100 1/1 2.00 50.00%
+170 17/10 2.70 37.04%
+340 34/10 4.40 22.73%
+500 5/1 6.00 16.67%
+1200 12/1 13.00 7.69%

Let’s imagine one of your friends asks, “How do odds in betting work?” You can explain it clearly as you understand implied probability. Basically, this can be calculated once you account for the bookie’s vig. This is what separates a 50/50 wager between you and the bookie when it comes to defining sports betting odds.

Indeed, if you agree to bet the same friend on a fair, 50/50 coin toss, no margin (vig) should be necessary. As long as you are not acting as the bookmaker, you don’t take juice on the action.

How Do Sports Betting Odds Work at Online Betting Sites?

Online sports betting odds at American sportsbooks follow the same principle as betting sites elsewhere. You place a bet at the odds offered by your favorite sports betting sites, choose your stake, and hit the button to place your wager.

What may differ are the odds formats, which can often be changed from options menus at online betting sites.

The next natural question is how do odds in betting work online vs. at a land-based establishment – well, in truth, there’s little difference. While various markets exist for different sports, odds are expressed the same way. As we see it, this explains how odds work as a numerical language between you and the house.

How Do Betting Odds Work in Boxing

It’s not as simple as asking what are betting odds for the big fight tonight, as that depends on the specific market. Despite that, in boxing, the outright winner market is often displayed first and center. This is the foundational market to bet on and is often popular in a pick ‘em betting scenario, featuring two boxers of the same quality.

  • Moneyline Odds – Gervonta Davis (-275)
  • Method of Victory – Gervonta Davis by KO/TKO (-325)
  • Round Betting – Davis to win in Round 8 (+600)
  • Totals – Over 5.5 Rounds (-450)
  • Fight to Go Distance – No (-700)

How Do Betting Odds Work in Football

If you find yourself asking how do odds work in football, always remember they hinge on numbers and implied probability. These factors underpin the odds you’ll see for specific football spread bets and other wagers. Understanding these concepts before comparing lines – especially for wagers similar to the examples below – can help you identify the expected value in prices.

  • Moneyline Odds – Green Bay Packers to Win (-175)
  • Spread Betting – Green Bay -7.5 (-104)
  • Totals – Green Bay vs. Pittsburgh Over 75.5 (+120)
  • Player Props & Specials – Aaron Jones Over 100 Rushing Yards (+140)
  • Team Props – Green Bay to Win Most Quarters (-160)

How Do Betting Odds Work UFC?

UFC fights, like horse betting odds explained, rely on determining one winner to settle bets. When the action inside the cage is concerned, MMA is not a team affair. Ultimately, you are betting on a fighter to either win or for a specific outcome to occur between the two competitors. Our experts outline some examples, below.

  • To Win the Fight – Max Holloway (-200)
  • Method of Victory – Holloway by Decision (-110)
  • Total Significant Strikes – Over 280.5 (+140)
  • Round Betting – Alexander Volkanovski in Round 1 (+420)
  • Parlay – Holloway -200, Jones -150, and Font +220 (+600)

How Do Horse Betting Odds Work?

You can bet on horses to win a race or to finish 2nd or 3rd. There are also plenty of other types of wagers available, such as futures and combination wagers. Here are some examples to consider.

  • To Win – Seize The Grey  (+980)
  • Place – Mystik Dan (Determined by Dividends)
  • Show – Forever Young (Determined by Dividends)
  • Trifecta – 2, 5, and 7 (Determined by Dividends)

Horse racing wagers work differently from most other sports and deserve a little more attention. The examples above are just a simple indication to get you started.

More of the Different Types of Odds You Can Bet On

If you like to wager on sports, there are several types of bets. Popular wagers include futures, moneyline bets, and spread betting. But the sport you are wagering on will always determine the kinds of bets you can place.

FootballBasketballBaseballSoccerIce HockeyCollege SportsHorse RacingVolleyballRugbyMotorsports

Compared with an average betting site, excellent sportsbooks cover everything from NFL futures, college football money lines, and totals to player props, team props, touchdowns, teasers, pleasers, and other parlay bets available.

Betting sites cover most popular team markets such as futures, spreads, and totals, along with NBA over/unders and specific basketball wagers like total free throws scored.

The opportunity for successful wagers in baseball is huge, with the chance to bet on MLB World Series winners, in-game props, run lines, first 5 innings, Same Game Parlays for larger payouts, and more.

The world’s most popular sport has a wide range of different bets to place from, with straight bets, spreads, totals, and futures including English Premier League winners, cards shown, half-time and full-time props, and more.

From the NHL to the KHL, hockey odds include Stanley Cup futures for strong favorites and underdogs, goals, fouls, puck line bets, Grand Salami bets, live betting opportunities, etc.

One of the greatest perks of wagering with offshore betting sites is access to various college football and basketball odds – these include everything from the Heisman and March Madness to matchups and totals.

Horse racing odds are available for key races in the US and around the world, including Kentucky Derby odds and Triple Crown futures, as well as trifectas, superfectas, trixies, and exotic wagers for big races.

We love the number of odds available for sports like volleyball, which features a sizzling array of markets for World Championship matchups, props, spreads, and a few appealing extras.

From rugby union to league, these teams sports have superb varieties of wagers with the potential to increase your chance of success – bet on the winner of the Six Nations or the World Cup, in-game props such as first try scorer, team spreads, and a hat full more.

NASCAR Cup Series and Formula 1 futures are hugely popular at offshore betting sites, but you will also find driver matchups, props, and championship odds for other auto racing events around the world.

These sports serve to show the variety of odds available at sites. Thus, you should have plenty of options to ponder. In any case, you can compare odds and markets across different offshore bookies to find what you want to bet on.

Using Online Odds Converters and Betting Odds Calculators

We’ve answered a lot of questions relating to how do betting odds work. All things considered, we recommend building your knowledge base around the subject to the best of your abilities. Still, it is important to point out the effectiveness of betting odds calculators, if things get too tricky to perform manually.

Depending on the type of betting calculator, you may be able to perform one or more of the following basic commands.

  • Work out potential winnings by entering odds and stakes
  • Convert to and from American, decimal, and fractional odds formats
  • Calculate the implied probability of a wager

All offshore sportsbooks we recommend automatically calculate potential payouts. Furthermore, you can adjust figures by toggling or switching between different stakes for that bet. However, implied probabilities are not something that is typically displayed for you before placing a bet.

FAQs

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Resources

  • 1. https://www.britannica.com/topic/sports-betting
  • 2. https://www.nfl.com/news/
  • 3. https://www.cfainstitute.org/en/membership/professional-development/refresher-readings/probability-concepts