Sports Betting Odds Explained

Content Team 2 years ago
Sports Betting Odds Explained

Understanding betting odds is crucial to mastering online sports betting. The array of numbers, symbols, and formats can make you wonder how to approach it. Our objective is not just to explain the betting odds but to equip you with the knowledge to use them to your advantage.

What Are Betting Odds?

Betting odds provide a numerical representation of the likelihood of various outcomes. Essentially, odds refer to both the chance of a particular outcome occurring and the potential financial return on a bet placed in anticipation of that outcome.

When a bettor places a wager, the odds at that time dictate the potential payout. Higher odds indicate a lower probability of the event happening, reflecting a higher reward for bettors willing to take on the risk. Conversely, lower odds suggest a higher likelihood of occurrence, offering smaller rewards for more probable outcomes. 

The concept of odds is not just about predicting winners or losers but understanding the value proposition behind each bet. Odds in betting reflect the bookmaker’s assessment of the probability of each outcome, but they also include a margin to ensure profitability. As a result, savvy bettors look beyond who they think will win and consider the odds’s value. By comprehending the nuances of odds, bettors can better strategize and manage their bankrolls. This kind of strategizing applies to everything from the most popular and niche sports betting to less common esports betting.

Calculating Odds

Sports betting odds are calculated based on the probability of an outcome, adjusted by the bookmaker’s margin and other market factors to ensure profitability and reflect the betting market accurately. Bookmakers utilize complex algorithms and expert knowledge to assess all factors that could influence the outcome. By grasping the basics of sportsbook odds and how they reflect the probability of outcomes, punters can assess the value of each bet more effectively.

How to Read Odds

Understanding how to read betting odds is crucial for making informed decisions on where to place your bets. By familiarizing yourself with the following formats, you can strategically plan your wagering to maximize potential returns:

  • Decimal odds of 2.00 mean you double your money if you win (your stake plus the same amount as profit).
  • Fractional odds of 1/1 (even money) also mean you double your money.
  • American odds of +100 are the equivalent of decimal odds of 2.00 and fractional odds of 1/1.

What Do the + and – Mean in Sports Betting?

Minus (-) and plus (+) symbols are key to gauging your potential payout, whether you’re betting on the favorite or the underdog. The minus (-) sign is typically assigned to the favorite, indicating the amount you need to bet to win $100. For example, if a team has odds of -150, it means that a bettor would need to wager $150 to win $100 in profit if that team wins. 

Conversely, the plus (+) sign marks the underdog, showing how much profit you’d make from a $100 bet. For instance, if a team has odds of +200, it means that a $100 bet on that team would pay out $200 in profit if they win, in addition to getting back the initial $100 bet.

Factors Behind Odds Variation

Bookmakers offer varying odds for the same sports event, reflecting their assessments. When you bet on football, for instance, the bookmaker might list a team at +130 while another offers +120 for the same outcome. Odds are subjective, based on the bookmaker’s perception of an event’s probability rather than a precise calculation.

The diversity in odds across bookmakers means savvy bettors can find value, leveraging their knowledge of the sport and betting principles to gain an edge. While sports betting is inherently challenging, understanding these nuances can improve your chances of making profitable wagers.

Advantage of High Odds

High odds in sports betting typically indicate that bookmakers consider an outcome less likely to occur. However, the potential reward for betting on such outcomes is correspondingly higher, offering bettors the chance to win more money relative to their stake. Whether higher odds are more beneficial depends on a bettor’s strategy, risk tolerance, and the specific circumstances of the event being wagered on.

Advantages of high odds:

  • Higher payouts: The most apparent advantage of high odds is the potential for higher payouts. Betting on an underdog or an unlikely outcome can yield significant returns if the bet proves successful.
  • Value betting: High odds can sometimes represent value bets. If you believe the probability of an outcome is higher than what the bookmakers suggest, betting on high odds can offer excellent value.
  • Excitement factor: For some bettors, the thrill of potentially winning a large payout from a small stake makes betting on high odds attractive.

Moneyline or American Odds Defined

Moneyline odds, also known as American odds, is a popular way of representing odds in sports betting, particularly in North America. It shows the odds for a particular outcome in terms of how much you need to wager to win $100 or how much you would win for a $100 wager.

Let’s use a hypothetical example of a basketball game between Team A and Team B to explain how American odds work. The Team A moneyline is -110, while the Team B moneyline is +120. 

The negative odds indicates that Team A is the favorite. A moneyline of -110 means that in order to win $100 in profit, you would need to wager $110. So, if you bet $110 on Team A and it wins, you would receive a total payout of $210 ($110 initial bet + $100 profit).

The positive odds indicates that Team B is the underdog. A moneyline of +120 means that a $100 bet on Team B would yield a profit of $120 if they win. So, if you bet $100 on Team B and it wins, you would receive a total payout of $220 ($100 initial bet + $120 profit).

This means that Team A is considered more likely to win, according to the oddsmakers, but you would need to risk more money to profit from a bet on Team A. On the other hand, betting on Team B carries higher potential winnings because they are considered less likely to win.

Calculating Implied Probability with American Odds

Implied odds suggest the likelihood of a specific outcome happening, expressed as a percentage. This tells us how likely an event is to occur according to the odds. If you think the chance of an event happening is different from what the sportsbook suggests, you might adjust your bet accordingly.

For example, if you believe a team has a 60% chance of winning, but the sportsbook’s implied probability is 52.4%, it might be a good opportunity to bet.

Remember to include the vig or the bookmaker’s fee when you convert odds to percentages. The total implied probability exceeds 100%, showing the bookmaker’s profit margin. Removing the vig helps you see the odds that oddsmakers expect for the game.

Calculating implied probability can be summarized as:

Risk/Return = Implied Probability

While this formula is straightforward in theory, it can be complex to apply it. 

Decimal Odds in Sports Betting

Before the widespread adoption of decimal odds, betting markets in Europe, Canada, and Australia primarily utilized them. Today, nearly all major online bookmakers worldwide use decimal odds as their standard, except for some US-based bookies.

Decimal odds are regarded as the simplest to understand among various odds formats. Unlike American odds, they encompass both the total payout and the stake per unit wagered. For instance, a bet at odds of 1.5 means that for every $1 staked, the total return would be $1.50. Similarly, a bet at odds of 2.25 results in a total return of $2.25 for every $1 staked. A bet at even money, represented as odds of 2, doubles the stake, returning $2 for every $1 wagered.

To calculate your total payout using decimal odds, multiply your stake by the decimal odds of the bet. This calculation gives you the total amount you would receive, including your original stake, making it a straightforward method to determine potential winnings.

Working Out Implied Probability with Decimal Odds

Implied probability: 1 / decimal odds

As an example, the following equation can be used to estimate Tampa Bay’s implied probability of winning:

Implied probability: 1 / 2.40 = 41.7%

And Cleveland’s chances of winning:

Implied probability: 1 / 1.61 = 62.11%

Understanding Fractional Sports Betting Odds

Fractional odds are most common in events like the Kentucky Derby, displayed on sports betting sites as figures like 9/5 or 1/2 and referred to as “nine to five” or “one to two.” These odds indicate the ratio of profit to the stake. The number on the left (the numerator) shows how often the bookmaker expects the outcome to fail, while the number on the right (the denominator) indicates the expected successful outcomes.

Examples of Fractional Odds

Consider a hypothetical match where Gennady Golovkin fights Canelo Alvarez with odds of 8/13. This suggests that for every 21 matches (8 losses + 13 wins), Golovkin is expected to win 13 times, giving him a 61.9% chance of winning (13 wins out of 21 total events).

For Alvarez, imagine odds of 11/2 in a scenario where the fight occurs 19 times. This implies Alvarez would win 8 out of these 19 times, resulting in a 42.1% chance of victory.

Calculating Potential Winnings

  • To calculate potential winnings for Golovkin at 8/13 odds on a $10 bet, you use the ratio to find the profit ($10 * 0.615 = $6.15). Thus, your total return would be $16.15 ($10 stake + $6.15 profit).
  • When betting $10 on Alvarez with hypothetical odds of 11/2, your potential winnings are $10 * 1.375 = $13.75, leading to a total payout of $23.75 ($10 stake + $13.75 profit).

The Concept of Vigorish (Vig)

The total probability exceeding 100% (e.g., 61.9% + 42.1% = 104%) illustrates the bookmaker’s overround or vig, ensuring profit regardless of the outcome. This overround is why the combined implied probabilities of all possible outcomes often exceed 100%.

Maximizing Success with Favorable Betting Odds

In sports betting, discerning what good betting odds are and how odds work is key to long-term success. They are not merely numbers that appear favorable at first glance. They represent a deeper understanding of value, risk, and potential return. Identifying such odds involves a blend of analysis, intuition, and strategy, laying the groundwork for informed and thoughtful betting decisions.

Favorable odds increase your chances of placing a winning bet while providing a satisfactory return on investment. The pursuit of such odds should be at the heart of your betting strategy, guiding your decisions and shaping your approach to sports betting.

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