How do Betting Odds Work?
Betting odds tell you how much profit you can receive from a bet. There are many different odds formats, from fractional to decimal odds and even American style. But how do betting odds work exactly? And how much will my bet win?
Our 'betting odds explained' guide answers those questions and more, while also taking you through the various odds formats you'll find at the best betting sites.
How do Betting Odds Work?
Betting odds allow you to work out your potential profits from a bet and allow the bookmakers to make their money by gaining an edge on the punter.
When punters can find an edge on the bookie, however, the roles are reversed and winning bets are made.
In the majority of cases, the math is simple and you should be able to roughly work out your profits at a glance. In fact, most established bookies and new betting sites will automatically do this for you when you add a stake to your online bet slip.
With that said, understanding the most popular types of odds and how to use them will make betting easier for you.
Understanding how betting odds work also allows you to compare prices across bookies, ensuring that you get the best value out of your bets. For example, you might find a price for England to win the World Cup and find different odds across several bookies.
All betting sites have their own nuances for how betting odds are displayed, so understanding all formats is a good idea before your make punts online to ensure you're getting bang for your buck.
How to Read Betting Odds
If you're not familiar with how to read betting odds, there are only a few things you need to know. Odds are represented on betting sites by different formats, although the most common ones are fractional, decimal and American odds.
If you're concerned about how to understand betting odds, don't worry. These systems are simple to comprehend, even for beginners.
For example, with fractional odds, the number on the right of the fraction tells you how much you need to wager to win the amount shown on the left.
You can change your stake, which requires more consideration, but getting an idea of the value of your odds is still simple.
Types of Betting Odds Formats
To help you understand how betting odds work, we've listed the three most common odds formats, with simple explanations alongside each of them.
Remember that if you want to go from fractional to decimal odds or vice-versa, betting sites and betting apps will allow you to change the format to suit your preferences.
By the end of reading our breakdowns you will be fully versed in how betting odds work across different formats.
- Fractional Betting Odds
- Fractional Betting Odds
- Decimal Odds
- American Odds
Fractional odds are the most commonly-used odds format in the UK and Ireland and you’ll find them available with most online bookmakers worldwide. These odds will display your potential profit as a fraction, such as 3/1 or 1/1.
The number on the right of the line indicates how much you need to bet to get a profit equal to the top number.
For example, say you're on one of our recommended horse racing betting sites and you want to bet on a horse. You see your pick is 3/1 to win the race. That means you'll need to wager £1 to win £3.
You’ll have your £1 stake and £3 profit in your account after a successful bet, giving you £4. 1/1 odds, also known as evens, will provide you with a profit equal to your stake.
Odds Conversion Table
If you have a particular preference for which odds format you prefer and need to convert fractional to decimal odds or even American odds to fractional, you can use the below table to see some of the most common price conversions.
How to Convert Odds Manually
You can use our conversion table to convert betting odds or find a site to convert odds. However, the best way to understand odds and use them to boost your betting is to be able to convert between odds formats manually.
Here, we’ve explained how to convert between the most common odds formats.
- Convert Fractional Odds to Decimal
- Convert Fractional Odds to Decimal
- Convert Decimal Odds to Fractional Odds
- American Betting Odds vs Decimal Betting Odds
It's actually quite straightforward to convert fractional to decimal odds with simple maths.
All you need to do is divide the top number by the bottom number and add one to the decimal you get. For example, to get 1/2 odds in decimal, you need to divide 1 by 2 to get 0.5. Add 1 to 0.5, and you get decimal odds of 1.50.
You need to add 1 to all fractional odds to decimal odds conversions, because decimal odds include your stake, unlike fractional odds.
How to Calculate Winnings with Betting Odds
While everyone wants betting odds explained, they aren’t designed to be challenging to read.
Once you understand how betting odds work, you can determine your profits just by glancing at the betting lines.
If you want to understand your odds and how much you can win quickly, we've put together a detailed explanation on how you can read the betting odds and decipher your potential winnings.
Fractional Odds
Using odds of 3/1 as an example, you can easily work out what you could win by looking at these fractional odds.
For example, if you are wagering £1, you can win £3. If you wish to bet £5, you will make £15 profit.
Where fractional odds can be harder to determine is when the number on the right is different to one.
In the case of 10/3, you can simply divide the two numbers to determine what the profit value would be for a £1 bet.
Decimal Odds
Seeing your profits with decimal odds is simple. All you have to do is subtract 1 and multiply the number by your stake.
For example, take away 1 from the odds of 4.00, and you get 3.00. If you want to bet £1, you’ll make a profit of £3. If you wish to wager £12, you’ll get a profit of £36.
American Odds
With American odds, there are two types to consider with minus and plus odds available, depending on the value of your bet.
If you're betting on (-) odds, you just divide your stake by the odds and multiply by 100 to calculate your potential profits. If you’re wagering on (+) odds, multiply your stake by the odds and divide by 100.
If you are betting £100, £10, or £1, you can also see your potential profits at a glance.
This format is less used than the others, although if you feel more comfortable using this method, betting sites accomodate all three options.
Betting Odds and Implied Probability
The best way to find value while betting is to convert odds into implied probability.
Implied probability is a percentage which tells you how likely something is to happen.
You can find betting value if you think something is very likely to happen, but a bookmaker’s implied probability doesn’t reflect this. We’ve listed the formulas to work out implied probability with the three most common types of odds.
Fractional
Bottom number / (top number + bottom number) x 100 = Implied Probability
Example (1/2):
1 (top number) + 2 (bottom number) = 3
2 (bottom number) / 3 = 0.66
0.66 x 100 = 66.6
Implied Probability = 66.6%
Decimal
(1/decimal odds) x 100 = Implied Probability
Example (4.00):
1/4.00 = 0.25
0.25 x 100 = 25
Implied Probability = 25%
American
(-) Odds: odds / (odds + 100) x 100 = Implied Probability
(+) Odds: 100 / (odds +100) x 100 = Implied Probability
(-) Example: -250
250 +100 = 350
250/350 = 0.714
0.714 x 100 = 71.4
Implied Probability = 71.4%
(+) Example: +400
400 + 100 = 500
100/500 = 0.2
0.2 x 100 = 20
Implied Probability = 20%
How To Work Out Betting Odds
Bookmakers use implied probability to work out betting odds for every event you see at a betting site.
Betting sites will assign every outcome a probability by analysing past results and statistics to get the most accurate number. The bookie will also add a 'vig' or 'juice' to every probability to ensure it makes a profit.
Many bookmakers will adjust betting lines to encourage bettors to back both sides and guarantee a profit. Doing so can lead to some betting lines having a lower or higher implied probability than you think is fair, which is where you find value in your wagers.
How Do Odds Work in Betting
Once the bookies have devised the probability of an outcome they then produce betting odds for their markets. Betting odds can change very quickly depending on the sport or event, especially for live betting.
However, being able read and understanding betting odds across different formats can allow you to make bets with informed decision-making.
There are occasions when your winnings could be affected by your stake. When using free bets, the money you receive back from the bookies will not include your stake unless you placed a real cash sum in the same bet with your free bet credits.
How Do Betting Odds Work - The Final Word
So, the next time you find yourself asking, 'how do betting odds work?' you’ll have all the answers.
After reading this page, you should better understand how sports betting sites use odds to display your potential profits.
You can use this knowledge to compare the odds at top bookmakers and to select the bookie with the best odds. Better odds means better potential payouts.
Thankfully, most bookmakers will calculate your potential profits for you and display them on screen once you've added a stake to your bet slip.
Before placing any bet, always ensure the odds accurately reflect the probability of the prediction.
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