Sports Betting Odds Explained: A Beginner’s Guide to Understanding Betting Odds

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Many bettors, especially newcomers, often find betting odds confusing. Understanding betting markets is crucial for making informed wagers and increasing your chances of winning. To make things clearer, we’ve created a detailed guide that explains how to understand betting odds. To make things clearer, we’ve created a detailed guide that explains how betting odds work and how to understand them.

Understanding Betting Odds

Sports betting odds reflect the chances of a particular outcome in a game or match.

Generally, your potential winnings are tied to how probable the event is. Lower odds suggest that the bookmaker thinks the outcome is quite likely. Betting on these odds means a smaller payout if you win.

Opposite, higher odds indicate the bookmaker thinks the event is less probable. Betting on these odds can lead to a bigger payout if you’re successful.

Betting lines are set by sportsbooks to balance the amount of money wagered on each side of a bet.

The Three Types of Betting Odds Explained

Betting odds come in three main formats: Decimal, Fractional, and American (Plus/Minus).

  • Decimal Odds: Most common in Canada, decimal odds show the total payout for every $1 wagered. For example, if the odds are 3.00, a $1 bet would return $3.
  • Fractional Odds: These are more traditional and show the profit gained on a $1 bet. So, 3 to 1 odds mean you win $3 for every $1 bet.
  • American Odds: American sports betting odds are written with a plus or minus sign followed by three numbers, such as +150, -110, -260. American odds use a plus (+) and minus (-) system to indicate the underdogs and favorites, respectively. Point spread is another common term in American sports betting, indicating the margin by which a team is expected to win or lose.

American Odds explained

Although odds vary internationally, let’s concentrate on American odds that are the most common to find in Canada, categorized into point spread, moneyline, and total. They are based on a 100-unit system, marked with either a plus (+) or minus (-) sign. Moneyline odds indicate the potential payout and distinguish between favorites and underdogs.

The 100-unit system operates on a 1:1 ratio, implying that for every $1 wagered, you’ll gain $1 if your bet is successful. A plus sign indicates you’ll win more than $100 on a $100 bet, while a minus sign signifies you’ll need to wager over $100 to win $100.

Formulas

To calculate potential winnings with American odds, use the following formulas:

  • For favorites (negative odds), divide 100 by the odds and multiply by your stake.
  • For underdogs (positive odds), multiply the odds by your stake and divide by 100.

For example, with -150 odds, a $100 bet would win $66.67, while with +200 odds, a $100 bet would win $200.

Calculating Betting Odds

At their core, sports betting odds tell us two things:

First, they tell us the probability of a specific outcome to occur in a game or event. This is the number you normally see on the sportsbook as odds, showing the bettor how likely they think a specific result is to happen. To calculate implied probability, you can use a formula based on the given odds.

There are various betting tools available online that can help you calculate potential outcomes and implied probabilities.

Second, odds indicate how much money we can win if we bet on that outcome. Which also involves how much a bettor needs to stake to potentially earn a profit. The profit from a bet does not include the initial wager, which is returned to the bettor along with any winnings.

Sportsbooks strive to balance both sides of a bet to avoid significant losses and ensure that all betting lines have active participants.

The outcome of the odds can be calculated either manually or by using specialized betting tools such as Odds Calculators, that provide bettors with the potential outcome of their bets.

The Vig and Its Impact on Sports Betting Odds

Vigorish, also known as vig or juice, is the fee that a sportsbook charges when you place a bet. It’s essentially the cut that the betting site takes for offering its services.

To maximize your winnings, it’s best to choose a sportsbook with a lower vig. A lower vig means you’ll retain more of your earnings. While it can be challenging to figure out the vig just by looking at sports betting odds, we’re here to clarify it for you.

Let’s say you and a friend bet $20 each on who will win a hockey game. In a straightforward 50-50 bet like this, the winner would normally expect to collect $40, doubling the original stake.

However, sportsbooks don’t operate in this simple manner. Instead, they take a percentage of the total $40 payout, leaving you with around $38, depending on the site. This deduction is what’s referred to as the vig or juice.

Implied Probability in Sports Betting

When it comes to sports betting, implied probability is the expected chance of an outcome happening as determined by the bookmakers. This probability is then shown as a percentage after you convert the odds.

To figure out how much you can win from a bet, you need to change the odds into implied probability. For example, if you think a team has a 55% chance of winning, but the implied probability is only 45%, you have an advantage over the bookies.

Converting odds to probability isn’t always simple, but it’s something you need to learn if you want to be a serious sports bettor and minimize your losses. Check our odds converter where you can insert your odds and get a conversion into other formats as well as the implied probability of the odds.

Converting Odds to Percentages

Here’s how you can transform different odds formats into percentages:

Positive odds indicate potential winnings over the initial stake and represent riskier bets.

Decimal Odds

To convert decimal odds to a percentage, simply divide 100 by the decimal odds. For instance, with odds of 4.00, you calculate it as 100 / 4, which equals 25%. This means there’s a 25% chance of the event happening.

Fractional Odds

First, turn the fractional odds into a decimal, then apply the same formula. For odds of 3 to 1, the decimal equivalent is 4 (since you add 1 for the stake). Thus, 100 / 4 = 25%.

American Odds

For positive American odds, use the formula 100 divided by (odds + 100). Positive odds indicate potential winnings over the initial stake and represent riskier bets. For negative odds, divide the negative odds by (negative odds + 100). For example, +200 odds convert to 100 / (200 + 100) = 33.33%, while -200 odds convert to 200 / (200 + 100) = 66.67%.

Reading Betting Odds

To make informed wagers, you need to read betting odds and understand what they mean. Here are the basics to help you understand what the odds mean and how they work:

Understanding betting markets is crucial for making informed wagers and increasing your chances of winning.

Reading sports betting odds is crucial for making more informed wagers and increasing your chances of winning.

What does 3 to 1 mean?

When you see odds listed as 3 to 1 it means for every $1 you bet you will win $3 if your bet is successful. So your total payout would be $4 (your $1 bet plus your $3 win).

What does +200 mean?

If you see odds of +200 it means a $100 bet on the underdog will win you $200. These are American odds showing the payout is more than your original stake, because the underdog is the riskier bet.

Negative Odds

Negative odds like -200 mean you need to bet $200 to win $100. To calculate the payout for a winning bet, multiply the wager by the odds and subtract the original wager. You would have to bet $200 to get a $100 profit. These are favourite odds, meaning the outcome is considered

What does +/- mean in betting odds?

plus and minus in betting

  • Plus (+) indicates an underdog. The number that follows tells you how much profit you’ll make on a $100 bet.
  • Minus (-) signifies a favorite. The number that follows shows how much you need to bet to win $100.

How are odds determined?

A bookie has a trader or oddsmaker who sets the odds. They assess team performance based on past results, ability and recent form.

Better teams have lower odds as they are more likely to win, weaker teams have higher odds.

But most recently, there is technology involve that is capable of assigning odds to games and events and updating them accordingly to the other bookies. So, although it is still possible to find difference in between sportsbooks and they offered odds, there is some how an equal balance in between them.