Understanding The Odds: How Do Sports Betting Odds Work

Betting Odds Meaning

There is nothing more important to sports betting than understanding betting odds. The name of the game when trying to win money betting on sports is to either find odds that give you a favorable chance to win or value in odds you are confident in. Therefore, understanding how betting odds work is the first step in learning how to bet. Let’s discuss.

Betting Odds Explained – How to Read Betting Odds 

If you are looking for betting odds explained in an easy-to-understand fashion, you have come to the right place. Understanding betting odds is the most crucial factor in sports betting and is paramount if you want to bet on sports effectively. Odds represent how likely a team or player is to come out ahead in a game or match. They can be listed in various forms, including American odds, fractional odds and decimal odds, and all essentially represent the same concept, though formatted differently.

Money line odds represent whether a team/player will win the game/match outright. In contrast, point spread odds introduce a point differential to even the playing field. When betting on a considerable underdog, if the team or individual athlete wins, you will receive considerably more money on the money line than when betting on a successful favorite. With point spreads, the point differential takes care of this, and you will more likely receive close to even money on either side. Here, we look at the various betting odds and break them down in detail.

How do American Odds Work?

If you are betting in the U.S., you generally see American odds. These are easy to identify as they come in a plus/minus format. You will see a plus (+) sign next to the odds for underdogs and a minus (-) sign next to the odds for favorites. Even with point spread betting, you will see odds since sportsbooks must still receive vigorish, or “vig”. Let’s go into it in further detail.

On the money line, you might see an NFL favorite in any given game, like the Kansas City Chiefs, are -140, while an underdog might be +120. This means you need to bet $140 on the favorite to win $100, whereas a $100 bet on the underdog wins you $120 dollars. With point spread betting, you generally see both sides at -110, which is how the house receives vigorish. This means that on either side you need to bet $110 to win $100.

How do Fractional Odds Work?

You will generally not see fractional odds in the United States, outside of horse racing or futures markets. They are more common in the UK and throughout Europe. Still, they work the same as American odds and are just represented differently. Whereas in American odds, you might see +200, the fractional equivalent is 2/1.

Some may consider this method of representing odds to be simpler. Fractional odds are the amount you would win divided by the amount you are wagering. The fraction’s numerator (the amount you would win) is listed first, while the denominator (what you are wagering) is listed second. In the case of 2/1 odds, the numerator is two, while the denominator is one.

How do Decimal Odds Work? 

Decimal odds represent the same thing as American odds and fractional odds, but again they are formatted differently. With decimal odds, you will see the amount that is factored into one all-inclusive number. You will generally only see decimal odds in Europe, and they are a quick way to ascertain how much your bet will pay out.

There will not be a plus or minus sign next to these odds, and it will always be a positive number. They simply tell you how much you will win for every $1 you wager, and from there you multiply the number based on how much you are betting.

What is Implied Probability in Sports Betting?

Implied probability is an important concept to understand in sports betting. When looking at sports betting odds, regardless of whether they are in American, fractional or decimal form, you will want to understand what they represent. 

The odds tell you how likely the oddsmakers believe one side is to win the matchup compared to the other. Using implied probability, you can calculate how often you would need your wager to cash to profit. This process can give you a good idea of whether the odds are efficient or exploitable.

To calculate implied probability, convert odds into a percentage. Depending on the odds format, a different formula must be used.

• American odds: For American odds, the equation must be calculated differently depending on whether it is for a favorite or underdog. For favorites, it would be odds/(odds + 100) x 100. This means that if a team/player is -200, the equation is 200/(200 + 100) x 100, which equals 66.66. This means that the implied probability of a -200 chance winning is 66.7%. In contrast, for an underdog, the equation is 100/(odds +100) x 100. A +150 underdog would be calculated as 100/(150 + 100) x 100, equaling 40. This means a +150 underdog has an implied win probability of 40%.
• Fractional odds: Since you will most commonly see fractional odds in horse racing in the US, let’s use this as an example. For fractional odds, the equation is denominator/(denominator + numerator) x 100. So, if a horse is 7/2, the equation would be 2/(7 + 2) x 100. Since this equals 22.22, a horse that is 7/2 has an implied win probability of 22.22%.
• Decimal odds: Decimal odds are simple to calculate. The equation is (1/odds) x 100. This means that if the decimal odds are 3.10 you would calculate (1/3.10) x 100 to arrive at 32.26%.

What are Las Vegas Betting Odds & Las Vegas Betting Lines 

The concept of Las Vegas betting odds is somewhat outdated. There was a time when Vegas was king in setting odds, but in our modern landscape of ubiquitous online sports betting, Vegas operators are no longer synonymous with the most relevant betting odds. Still, Vegas is a major factor, and much of the sharpest money is being placed at top Vegas casinos.

Despite the fact odds are less spaced with Vegas operators than they once were, you will often hear the term “Vegas” used when referring to odds or the opinions of oddsmakers. Nonetheless, this does not necessarily mean that these odds are originating in Vegas. It is still good to understand this as common sports gambling parlance.

How to Use a Betting Odds Calculator?

While it is good to have a grasp on the math of betting odds if you are a serious sports bettor or just a curious individual, in the modern age we have betting odds calculators that will do the work for us. We offer an excellent free betting odds calculator. Let’s take a look at exactly how our betting odds calculator functions in step-by-step form.

1. The first step is to add your wager amount into the top field for “Bet Amount”.
   
2. Next, populate the odds of your pick. We offer American, fractional, decimal and implied probability. Upon entering the odds into one of these fields, not only will the calculator tell you what you would stand to win, but the odds for each type also populate. Hit the reset button at the bottom if you would like to see what you would stand to win with a different bet amount on different odds.

FAQs 

Is Plus or Minus Better Odds?

Minus (-) odds refer to odds on favorites, while plus (+) odds apply to underdogs. You win more money compared to your wager when you bet on underdogs (+) than on favorites (-). Neither represents more advantageous odds on any given bet as it depends on the efficiency of the odds on that sporting event. Still, in terms of the simple return in the case of a win, plus odds are more favorable.

What do Odds of +200 Mean?

Odds of +200 mean that you stand to win double what you bet. If you bet $100 on any of our MLB picks at +200, you could win $200 and collect $300. Any time you see a plus number, it represents what you will win on a $100 bet on that selection.

What Does 3 to 1 Betting Odds Mean?

3 to 1 odds mean that if the selection wins you will win three times your stake, so if you bet $100, you would win $300 at 3 to 1 odds.

Who Sets the Odds for Sports Betting?

Odds are set by sportsbook operators. Opening lines are based on advanced sports analytics in an attempt to be as accurate as possible. They are then moved based on breaking news in relation to the sporting event in addition to the betting public and which side money is being placed on. Operators attempt to even odds based on bet volume, especially when much of the money bet involves the sharp betting public.

What are American Odds?

American odds refer to how sports betting odds are generally delineated in the U.S. You will see a plus (+) or minus (-) before the number for underdogs and favorites, respectively.

What are Fractional Odds?

Fractional odds are mostly used in the UK and Europe but are standard in horse racing even in the US. These use the fractions such as 5/1 to express the odds and payout on wagers.

What are Decimal Odds?

Decimal odds are more common in Europe and use a single number to express what you would win on a $1 wager.