How Do Betting Odds Work? 🎯

Odds come in three distinct types, let’s find out how betting odds work.

It’s critical to understand the chances before you begin betting, whether it’s casino gambling, sports betting, or any other form. Placing sensible bets necessitates a thorough understanding of the many forms of betting odds as well as the ability to comprehend and analyse their varied formats.

Fractional (British) odds, decimal (European) odds, and money line (American) odds are the three basic forms of betting odds. These are essentially different methods of presenting the same item, and the rewards are same. This means that any of the aforementioned sorts of odds can be used to convert and report the chances (or percentage likelihood) of an event occurring.

IMPORTANT TAKEAWAYS

  • Fractional (British) odds, decimal (European) odds, and moneyline (American) odds are the three basic forms of betting odds.
  • These are two different ways of presenting the same item, with no difference in payments.
  • The ratio of the amount (profit) gained to the bet is known as fractional odds.
  • Decimal odds refer to the amount of money won for each dollar staked.
  • Moneyline odds reflect the amount one must gamble to win $100 or the amount one would earn for every $100 wagered, depending on the negative or positive sign.

What Are Fractional Odds and How Do They Work? 🎲

British and Irish bookmakers favour fractional odds (sometimes known as “British” odds, “U.K.” odds, or “conventional” odds). Some of the world’s major bookmakers employ them, which are often written with a slash (/) or hyphen (-). 1

A fractional listing of 6/1 (six-to-one) odds means you’ll win $6 for every $1 you gamble, plus you’ll get your money back (i.e., the amount you wagered). To put it another way, this is the ratio of the amount (profit) gained to the initial wager, which implies you’ll get your stake ($1) plus the profit ($6) for a total payment of $7. As a result, if you bet $10 and win, you’ll receive a total payment of $70 ($60 profit + $10 investment). 1

Total Payout = (Stake x (Numerator/Denominator) + Stake Where: numerator/denominator is the fractional odd (e.g., 28/6) Total Payout = (Stake x (Numerator/Denominator) + Stake

Let’s say the chances on the three teams most likely to win the NBA Championship in 2022 are as follows:

The Brooklyn Nets are a 13/5 favourite.

Warriors of Golden State (9/2)

The Milwaukee Bucks are a 7/1 favourite.

It’s easy to see that the Brooklyn Nets are the favourites, while Golden State and Milwaukee have lengthier odds of winning. You’d get $13 for every $5 you bet on Brooklyn to win the championship. Meanwhile, if Golden State wins, you’ll win $9 for every $2 you placed on the line, which is a bit less likely. For each $1 wager on Milwaukee, you’d win $7.

In the example above, if you placed $100 on Brooklyn to win, you may earn $260 ($100 x (13/5) and receive your $100 wager back, for a total payout of $360. However, if you bet $100 on Golden State to win, you might make a profit of $450 ($100 x (9/2) on top of your $100 gamble, for a total payout of $550.

The profit potential for a Milwaukee win is considerably bigger, as you might make $700 ($100 x (7/1) if the team wins. The original $100 bet would be repaid, resulting in a total payoff of $800.

Betting Odds | What Are Decimal Odds and How Do They Work? 🤔

In continental Europe, Australia, New Zealand, and Canada, decimal odds (sometimes known as “European” odds, “digital” odds, or “continental” odds) are common. These are a little easier to use and comprehend. By looking at the data, you can see who the favourites and underdogs are right away. 2

For every $1 staked, the decimal odds number reflects the amount won. The amount in decimal odds shows the entire payment rather than the profit. In other words, your stake is already included in the decimal amount (you don’t have to add it back in), making calculating the entire payoff easy. 2

A stake’s total (possible) return can be computed as follows:

Stake x Decimal Odd Number = Total Payout

Consider who may have won the 2020 presidential election in the United States.

Joe Biden: 1.3 Donald Trump: 4.00

These figures indicate the amount of money you may win for every $1 you wager. So, if you bet $100 on Donald Trump to win reelection, you may win $400 ($100 x 4.00). This figure includes the $100 original stake, resulting in a $300 net profit.

If you correctly bet $100 on Joe Biden, you may get a total payment of $130 ($100 x 1.3). After deducting $100 from this return, you’ll have a $30 net profit.

Here, we can see that the bookmaker properly predicted Biden’s election victory. The less likely (and riskier) it is for the listed candidate to win, the larger the total payment (i.e., the higher the decimal odd).

What Are Money Line Odds and How Do They Work? 💲

In the United States, money line odds (sometimes known as “American” odds or “US” odds) are quite popular. The amount you must risk to win $100 is shown by a negative (-) sign next to the odds for favourites. Underdogs, on the other hand, have a positive (+) symbol next to their odds, indicating the amount gained for every $100 invested. 3

Winners in both circumstances receive their initial wager refunded in addition to the prize money. As the favorite’s chances of winning improve, the gap between the odds for the favourite and the underdog widens. 3

Let’s look at an example to assist you understand:

Consider the following money line odds for a game between the Pittsburgh Steelers and the Kansas City Chiefs on a betting platform.

+585 Steelers

-760 for the Chiefs

The bookmaker has given the Steelers odds of +585, implying that the bookmaker believes the Steelers have a substantially smaller chance of winning the game (about 15%). To make a possible gain of $585, you must wager $100 on the Steelers. If the Steelers win, you’ll get your $100 bet back plus the $585 you earned, for a total payout of $685.

To earn $100, you would have to put $760 on the Chiefs, the team with the greater implied probability of winning the game, according to the bookmaker. If the Chiefs win, you’ll receive $100, for a total payout of $860 (original wager of $760 plus profit of $100).

There is a significant gap between the two odds in this contest, indicating that the Chiefs have a far better chance of winning.

Betting Odds | What Do 5-to-1 Odds Mean? 📈

If the bet is successful, five-to-one odds mean that every dollar invested might win you $5. The number on the left indicates how much you’ll win, while the number on the right indicates how much you’ll have to stake.

Betting Odds | What Do +200 Odds Mean? 🥇

American money line odds are those that start with a + or a – and end with a number: The amount a bettor may gain if he or she bets $100. If the wager is successful, the player will be paid a total of $300 ($200 net profit + $100 original risk).

Is it better to have negative or positive odds?

Negative numbers on the betting line are allocated for the favourite and show how much you must wager to win $100. Positive numbers, on the other hand, are associated with underdogs and indicate to the amount you may win if you wager $100.

You stand to gain more money on favourable odds if you are convinced of a winner. You have a higher chance of winning if you bet on the bookies’ favourite, but the payoff is usually lesser.

If you or someone you know has a gambling issue, call the National Problem Gambling Helpline at 1-800-522-4700 or speak with a helpline professional at ncpgambling.org/chat.

Conclusion

As previously stated, betting services constantly adjust their odds in response to shifting markets. That’s why a team may be favoured by -150 on one website but -160 on another, or even bigger differences in odds. For skilled gamblers, differences in odds between bookies might be a profitable opportunity. Why do betting sites have varying odds? There are a number of variables at play here. When a sharp betting site, such as MyBookie Sportsbook, adjusts its odds, the rest of the market generally adjusts as well. If the rest of the market doesn’t respond fast, that’s where you’ll find possibilities to chase steam. Larger volume sharp gamblers or wiseguys will beat up on betting websites that do not adjust their odds. Line shading is a technique used by online gambling firms to manipulate odds when they accept a lot of money on one side or to entice public involvement in particular tournaments.

 

Michael Adams
Experienced writer in iGaming Industry. Worked for the big companies in the industry, now I took the challenge to grow with a new company and a new website. The future is bright and I am happy to be part of it!

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