When I was introduced to sports betting, the first thing that made me nervous was what seemed to be the enormous barrier of understanding what odds were. Odds are simply bookie language of what the probability is of a certain outcome of a particular event. Whether it be a football match or a presidential election, the outcomes can be predicted to a degree by learning and gauging historical statistics and past outcomes.
Betting is all about taking what we know from the past and making an educated decision to try and predict what is going to happen with the added excitement of a financial incentive.
What is probability?
So let’s get started with simply breaking down what probability is. Probability is how likely something is going to happen. For instance, what are the chances of a coin landing on heads (or tails) if you toss it into the air? This example can only ever have two outcomes, so the probability of either outcome is 50/50. Half of all the times it will land on heads and the other half will be on tails. Now this is not an exact science, hence the outcomes will only be probable not certain. This is one of the many drawbacks and exciting parts of sports betting, no matter how certain the stats and pundits say a games’ outcome will go, anything can happen.
However, we can express the probable outcomes in a mathematical format.
Probability = favourable outcome / all possible outcomes
In betting, you will hear the term ‘odds’ very frequently. This is the way that the bookmaker (and the bettor or punter) will price a bet and work out how much could be won if the outcome goes the right way.
To make things more interesting there are several ways to write odds and often this is due to where you are in the world or simply what you are used to using. For example, here in the UK bookmakers and most bettors will use the fractional method, in Europe they use the Decimal method and in the US they use American odds. Everyone has to be different!
Most online bookmakers will have tools on site to allow you to bet using the odds you are most familiar with. For instance, I am from the UK where fractional odds are predominantly used but I prefer to use The Decimal method, so on the bookmaker sites that I use I simply find the option to change the entire site to what I know best. This gives me the peace of mind that I am laying the right bet without having to convert numbers to what I am used to.
Anyway, here is what they mean and how you can easily work out what you will stand to win if the bet goes your way.
How to understand fractional odds
Fractional odds are always displayed in the following way; 4/1, 7/5, 13/5. The best way to think about how to calculate what this means is; How much I will Win/How much I Wager. So if you wager £10 to the above odds you stand to win;
4/1 = £50 (£40 in winnings + £10 wager)
7/5 = £24 (£14 in winnings + £10 wager)
13/5 = £36 (£26 in winnings + £10 wager)
To put that in to a mathematical format;
((Wager amount/denominator)) x numerator) + Wager amount
So for the 4/1 example;
((£10/1) x 4) + £10 = £50
How to understand decimal odds
Using the same odds as above converted into decimal, we will get;
4/1 = 5.00
7/5 = 2.40
13/5 = 3.60
The reason that I prefer to work with decimal is that is much more simple to work out the winnings. We have to use the following; Wager amount x Odds
So if we use the same £10 example as above we will get;
£10 x 5.00 = £50
£10 x 2.40 = £24
£10 x 3.60 = £36
However, there may be a time that you need to convert fractional odds into decimal and it is fairly straight forward. All you need to do is divide the fractions and add one (to the figure that stands for your wager amount), so for the 7/5 odd we divide 7 by 5 and add 1, which will give us 2.4.