Understanding Betting Odds

The world of sports seems as far removed from maths as you can get, but when you enter the world of online sportsbooks, the two worlds collide.

Sports betting in the US is a multi-billion dollar industry, and the best offshore sportsbooks provide markets on different sports and fixtures from around the world for all bettors, even those living in states where online betting is restricted.

The betting odds offered by these sites determine how much consumers could potentially win, but the way odds work can seem confusing to first-time bettors.

Market Probability

The betting odds provided by operators reflect the market probability on specific selections. Odds compilers make the most of statistics, teams and player data, and other factors to determine the odds of different markets.

The probability of selection is shown as a percentage and takes into account a variety of factors including a team or player’s form, ability, and injuries, as well as looking at external factors including how the weather could impact events or how the market is betting on certain events.

Probability is worked out as a percentage, with all probabilities adding up to 100%. By working out the probability, operators are then able to create betting odds that work in a house edge to guarantee them long-term profits.

Odds Types

Depending on which operator you choose to bet with, your betting odds can be shown in a variety of different ways. While they all amount to the same thing, it can be confusing if you are used to a particular system.

Fractional

Fractional odds are most commonly used in the UK and express the odds as a ratio. An example of this could be 10/1, meaning that a better would have to place a £1 bet to win £10.

Decimal

Decimal odds are more commonly used in Europe and work in the same way as fractional odds, they just look slightly different. While fractional odds are displayed as 10/1, the same odds in decimal form would show as 10.00.

Moneyline

US Moneyline bets use a plus or minus sign to indicate the favorite or underdog in a particular selection. Favorites are shown using a minus (-) sign and odds of -150 would mean the customer would have to stake $150 to win $100.

Underdogs are represented by the plus (+) sign and odds of +150 would mean a $100 stake wins $150.

Format Conversion

Consumers who use a betting site with odds displayed in a certain can use conversion tools to show the odds in their preferred format or convert them in the following ways.

Converting fractional odds into the decimal format requires the user to divide or solve the fraction and add 1. Converting fractional odds into the US moneyline style follows the same formula as conversion to decimal, but after the fraction is solved, answers greater than 1 receive a plus sign and those below have a minus.

Decimal conversions into fractional odds must have 1 deducted from the total before being converted to a fraction. Conversion to the US format uses the formula, (decimal odds – 1) * 100 to convert to American odds. Decimal odds between 1.01 to 1.99, The following formula must be used: -100 / (decimal odds – 1).

Conversion from US moneyline odds to decimal sees positive odds divided by 100 and then adding 1. An example of this is +400 divided by 100 plus 1 creating odds of 5.00.

Minus moneyline odds need the consumer to take 100 and divide it by the moneyline number before adding 1.

The House Edge

Math does not lie, and those who do the math on sports betting sites might be confused by the results they get. This is because betting operators always implement a built-in house edge.

The house edge works as a built-in fee that guarantees the bookmaker comes out ahead, regardless of the winning selection. As a business, betting operators are not there to gamble, instead, they provide the odds that give players an opportunity to win while guaranteeing long-term profits.

The house edge is usually worked out as a percentage that guarantees a return based on what is wagered. This is factored into the betting odds, with operators offering slightly less than the genuine probability. This percentage is usually quite small, and a 3% house edge would see the operator earning $3 for every $100 wagered.

This can be more difficult to see in sports betting with very few markets offering absolutes, but it works in the same way as casino betting. The house edge refers to the house being the casino. In the case of roulette, a wheel has 36 numbers so odds of 36/1 might seem fair. However, the addition of a zero and double zero to the wheel moves the odds in favor of the house over time.

Market Changes

Market changes will also impact betting odds, with operators regularly updating the odds based on information regarding selections or on how much is being spent on a particular selection.

In markets like horse racing, late changes can affect the market, but there might not have been time to alter the odds. In this case, Rule 4 can be applied which affects the winnings paid out by operators.

If a horse is withdrawn at the last minute, it could result in a Rule 4 being announced where an amount is taken from the winnings to reflect the altered field. This will only occur when the horse withdrawal would have impacted the odds on other horses.

For example, a rank outsider being withdrawn would not affect the field, whereas the withdrawal of one of the favorites would mean that every horse ranked below it would have a better chance of competing.

In the event of this happening, a deduction is made from the winnings with the amount determined by the odds of the horse withdrawn. A 10-cent Rule 4 would see 10 cents from every dollar won deducted from the eventual winnings.

Parlays and Related Contingencies

Parlay betting sees the consumer place a bet on several selections, with all selections having to win for the bet to succeed. This type of bet can be a great way for bettors to increase their odds by adding more selections to a bet, and the odds will reflect the risk involved.

If a bettor wants to place a bet with more than one selection that could impact the other, this is known as a related contingency. For example, placing a bet on the NBA final and choosing a player to finish as top scorer and MVP would be considered as a related contingency because the result of one gives the other a much better chance.

Many bookmakers will not create special odds that consider these factors.

Conclusion

Bettors do not have to be mathematicians, but a good understanding of math can help with how betting odds work, helping consumers identify the best opportunities and value when betting on sports.

Shopping around the top betting sites can provide excellent value, and knowing how to compare different odds types to get the best will improve your chances of walking away with more winnings.