Understanding betting odds is one of the first things any punter should learn before they begin to wager.
Different bookmakers sometimes use different odds and American bookmakers in general have their own way of writing odds- which is known as Moneyline odds!
The three main types of odds are fractional, decimal and american odds which have been developed between the UK, Europe and the United States. Theses numbers and systems are really not as complicated as they first appear.
Read on to learn the difference between the systems and how to wager with confidence as we explain how to calculate the implied probability of the odds, your winnings and how to converter from one betting system to another .
What is the difference
Fractional odds are also known as “British odds” as they are the preferred system in Great Britain and in Ireland. Fractional odds are written in the following way – 20/1 or 4/5 or 3/1.
The fractional odds are relative to the stake of the punter, so for example if a punter places a $20 bet for a team to win at 20/1 odds and they team wins the receive $400. The concept of fractional odds is written like 20/1 and which means you recieve $20 for every $1 you bet.
Decimal odds are also known as “continental odds” as they are preferred in Europe and Canada and are considered the most popular odds currently in use. The decimal odds are expressed in the following ways – 2.0 , 1.60, 5.00 etc.
Understanding decimal odds system is simple as the odds state clearly how much money will be gained for a bet of 1 unit.
For Example, if you place a bet for a football team to win at decimal odds of 1.60 will return $160 in total if they win.
Moneyline or American odds
Moneyline or american odds are probably the most difficult to use and are very different from the others. American odds are based on $100 stake and tell a positive or negative outcome for example the odds are written in the following ways: -180, -220, +210 etc.
If it is written positively, then the American odds tell how much profit punters will make on a 100 stake but if it is written negatively, then American odds tell how much of a stake is needed to make 100 on the bet.
Furthermore, the minus sign is used for the favourites (the team most likely to win) and the plus sign for the underdogs. This way players have to bet more money to win money if they bet on the favourite team.
How to calculate the implied probability of the odds
Implied probability in sports betting is simply a conversion of traditional odds into a percentage but it also takes into account the house edge and eliminates it to express the odds as the “true odds” of an outcome.
By knowing how to convert betting odds into their respective implied probabilities you can increase your chances of coming away as the winner of many sports bets as it offers a key to assessing potential value in a particular bet.
To convert fractional odds into their respective probabilities the following conversion is used:
For example if the odds are 5/2
Therefore Implied Probability = 2/5+2
Implied probability = 2 / 7
Implied probability = 0.286
Multiplied then by 100 to express as a implied probability percentage of 28.6%
To convert decimal odds the following conversion is used:
For this example the odds are 1.65
Therefore Implied probability = 1 / 1.65
Implied probability = 0.606
Multiplied then by 100 to express as an implied probability percentage of 60.6%.
“Minus” American Odds
If you want to convert from American odds or “Moneyline odds” use the following conversion:
So for this example the American odds are -120.
Implied probability = (- (-120) / ((- (-120)) + 100)
Implied probability = 120 / (120 + 100)
Implied probability = 120 / 220
Implied probability = 0.545
Multiplied then by 100, we get the implied probability percentage of 54.5%.
“Plus” American Odds
There is a different conversion method for American odds that are “plus”.
For this example the odds are +180
Implied probability = 100 / (180 + 100)
Implied probability = 100 / 280
Implied probability = 0.357
Multiplied then by 100, we get the implied probability percentage of 35.7%.
How to calculate your winnings
Calculating your winnings is simpler then it sounds and is extremely important to understand when you want to place a big money bet.
This type is mainly used in the UK and is considered the old English way of betting. The fraction represents the net gain/amount wagered.
For example, if we have a bet of 4/1 it signifies that for each 4 euros we bet we earn 1 euro return if our bet is successful.
As this is the most common form, it is quite easy to understand. The decimal odds are always equal or greater than 1 and be no more then 2 or 3 decimal places.
This represents the gross gain you receive if you win a bet.
Gross Profit = Quantity stake x odds
Net income = Gross Profit – Number bet
For example if I make a $20 bet on a particular team with odds at 1.3 the gross profit (GB) and net income (NI) will be the following:
- If my team wins: 20 X 1.3 = $26GB 26 – 20 = $6NI
The american system can be can be positive or negative, depending on whether the fee is higher or lower than the equivalent of 2 in the decimal system.
If the fee is greater than or equal to 2 will have a positive sign. The fee shall indicate the net gain we can achieve if we bet 100 units .
Imagine that the fee is +150. If you bet € 100 and win the bet, the amount that you would get would be 150 €.
If the fee is less than 2 will have a negative sign. The share indicate the amount we risk to make a profit of € 100 .
For example, if the fee is -300, you earn € 100 for every € 300 wagered
How to convert from one system to another
To converter from fractional odds to decimal odds the procedure is quite simple. You can convert this in 3 easy steps which are illustrated below. For the purpose of the conversion will we use the fractional odds of 20/31.
- Divide 20 by 31 (20 ÷31 = 0.64516129)
- Round the 0.64516129 down to two digits (0.65)
- Add 1 to 0.65 (1+0.65 = 1.65)
Therefore the decimal odds are 1.65.
In order to converter from fractional odds to moneyline odds following the instructions below. For the purpose of the conversion the fractional odds we will use is 27/20 for the Bulls to win again the Rangers.
As the 27 is the bigger number this means that the Bulls are favourite to win. There it is already illustrated that the American or Money line odds will be positive. Follow the steps below:
- Multiply the 20 by 100 ( 20 X 100)
- Divide the answer by the number 27 (2000÷ 27 = 74.0740741)
- Round down to two digits (74)
- Put the positive sign +74
Therefore 27/20 is +74 in moneyline odds.
For the most popular odds, conversions and for their implied probability consult the table below: