How do Betting Odds Work?

Betting odds allow you to calculate your potential profits from a bet, while also giving bookmakers an edge over bettors by adjusting the odds to ensure they make a profit.

However, when players can find an edge, the roles are reversed, and that's where bettors can win.

In most cases, the math is simple, and you should be able to work out your profits at a glance. Most betting sites do this for you automatically 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.

There are a few different odds formats, each with a simple formula you can easily interpret. For example, with fractional odds, the number on the right of the fraction tells you how much you can win if you wager the number on the left.

While adjusting your stake requires more consideration, getting a quick sense of the value of your odds is still simple.

We've listed the three most common odds formats below, with simple explanations alongside each of them. Most betting sites allow you to switch odds formats to suit your preferences. 

The best way to understand odds is to be able to convert between odds formats manually. Here are some examples of how to do this.

Convert Fractional Odds to Decimal Odds

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 odds, 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 must always add 1 to all fractional odds to decimal odds conversions because decimal odds include your stake, unlike fractional odds.

Convert Decimal Odds to Fractional Odds

Converting from decimal to fractional odds is slightly more challenging.

You can do this by subtracting 1 from the decimal. For example, subtract 1 from 4.00 to get 3.00.

If you end up with a whole number or a decimal with only zeros, simply place that number over 1. For example, the 3.00 from the previous calculation becomes 3/1, with 3 as the numerator and 1 as the denominator.

This becomes trickier with odds that aren’t whole numbers when you subtract 1. For example, 5.5 minus 1 equals 4.5. With these odds, you must multiply until you get a whole number. So, with 4.5, you multiply by 2 to get 9.

Now, whatever number you multiply by goes under your new whole number as the denominator, while the result (9) becomes the numerator. In this case, 4.5 becomes 9/2.

Converting American Odds to Fractional Odds 

To convert American odds to fractional odds, divide the absolute value of the American odds by 100, then simplify the fraction. For example, -200 American odds would convert to 1/2 in fractional odds (200/100 = 2, so the fractional odds would be 1/2), while +300 American odds would convert to 3/1 in fractional odds (300/100 = 3, so the fractional odds would be 3/1).

Converting American Odds to Decimal Odds 

To convert American odds to decimal odds, use the following formulas: for negative American odds, divide 100 by the absolute value of the odds and add 1; for positive odds, divide the American odds by 100 and add 1. For example, -200 American odds would convert to 1.50 in decimal (100 ÷ 200 + 1 = 1.50). Meanwhile, +300 American odds would convert to 4.00 in decimal (300 ÷ 100 + 1 = 4.00).

Implied probability is a percentage that tells you how likely an event is to happen. Oddsmakers use this probability to determine the odds for every event you see at a betting site. Betting sites assign a probability to each outcome by analyzing past results and statistics to determine the most accurate numbers. 

To ensure a profit, oddsmakers add a "vig" or "juice" to the probability, which acts as the "cost" of placing the bet.

Many sites adjust betting lines to encourage bettors to back both sides, guaranteeing a profit for the house. This can lead to some betting lines having a lower or higher implied probability than you think is fair, creating opportunities for bettors to find value. If you spot an outcome that seems more likely to happen than the actual odds suggest, that's where the potential for a good bet lies.

The best way to find this betting value is to convert the odds into implied probability yourself. If a betting site’s odds don't align with what you believe is more likely to happen, this is where you can potentially profit. 

You can use an implied probability calculator to convert fractional odds from one format to another. You can also use the formulas below to calculate implied probability for the three most common types of odds.

Once you understand how odds work, you can determine your potential profits just by glancing at the betting lines.

Here are examples from each of the three odds formats.

Now that we’ve covered the different odds formats, let’s dive into how to read them in real-world sports betting scenarios. While understanding odds is crucial, knowing how odds work in various sports is also important.

Moneyline Odds

Moneyline odds are one way the oddsmakers level the playing field. Moneyline betting is a wager on a team to win the game outright with no spread.

If you bet on the favorite using these American odds and win, your return will be less than even money. Conversely, you will receive more than even money if you wager on an underdog and win.

Here is what the American odds would look like for a hypothetical NFL game:

• Tampa Bay Buccaneers -216
• Los Angeles Chargers +170

You have to bet $216 to win $100 on the Bucs, and if you bet $100 on the Chargers and they win the game outright, you win $170 in profit. You would get your original $100 stake added to your winnings in both instances.

Point Spread Odds

The other way sports odds are used to balance out win probability differences is the point spread. The underdog will get extra points from the outset, and the favorite will surrender the points.

If a seven-point favorite wins a game by at least eight points, it is said to have "covered." If it loses or wins by fewer than seven points, any bettors on the favorite lose the bet. If it wins by precisely seven points, this is considered a "push," and all wagers are refunded.

Here is an example of what you might see when you look at NFL betting lines:

• Tampa Bay Buccaneers -4
• Los Angeles Chargers +4

In this game, the Buccaneers are the favorite. They are giving four points, and the Chargers are getting four points. If you bet on the Bucs to cover the spread, they must win the game by at least five points.

In baseball, the run line is the equivalent of the point spread. For hockey games, the point spread equivalent is called the puck line.

Totals Odds

The total, also known as the over/under, estimates the total number of combined points that both teams will score. You can wager on the over or the under when betting on the totals.

When you look at the betting lines for Totals, you will see something like this:

• Over 41.5: -110
• Under 41.5: -110

The -110 odds for both sides of this bet reflect the vig (or juice) we discussed earlier, meaning you must bet $110 to win $100 in profit. This built-in commission ensures the sportsbook makes a profit, regardless of which side wins.

Proposition Bets

A proposition bet, also known as a prop or a special, is a wager on a particular outcome within a game. You can wager on a player to score a touchdown at some point in the game, over or under on passing yards for a quarterback, and many other props.

You’ll also come across moneyline-style wagers, where you can bet on specific players or teams. Anytime touchdown scorers are a popular example.

Futures Odds

A futures bet could be a player prop, such as on a player to win an award, but more often, it is a wager on a team to win its league, conference, division, or overall championship. 

Parlay Odds

A parlay is a bet with multiple selections on the same ticket. You can bet the same type of wager or a combination of spreads, moneylines, totals, and props.

The more entries you have on your ticket, the higher the payout, but all your selections must be correct. Each betting site will have its own precise rules for parlay betting.

Parlays involving moneyline or American odds are calculated individually for each selection, and most betting sites will automatically calculate the total payout for you.

Determining whether bookmakers have taken professional money on a market can be tricky. But the most obvious usually occurs when betting on horses.

Using horse racing as an example, when a horse that has started at 8/1 in the market and ends up at a price nearer evens, it is a sign that either the oddsmaker or a professional handicapper knows something the casual bettor doesn't.

Depending on where you live, you may have many different sports betting sites to choose from. Many people start an account at the betting site that initially catches their attention, and never feel there is a reason to check out the other sites. However, this can be a missed opportunity.

Odds are not the same at every betting site. They vary depending on the action they take on an event and other factors.

• You should shop around for favorable odds because slightly different odds could be the difference between a winning and losing bet. Seemingly minor advantages will add up over time.
• Another reason to open accounts at multiple sports betting sites is that most have sign-up offers, which provide a great way to get stress-free action while refining your betting strategies.

Use our odds comparison pages to find the best price in your area.