Betting Odds Explained: How Betting Odds Work

Betting Odds Explained: How Betting Odds Work
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Betting odds are at the core of the sports gambling experience. The projected outcome of a given contest is usually not going to be a 50-50 proposition due to a number of different factors. A betting line will level the playing field by taking the win probability of each participant into account.

In addition to this element, odds serve another purpose. The online sportsbook that is going to be holding the bets is not a nonprofit organization. They want to make a guaranteed profit regardless of the outcome of the games, and the odds help them do that.

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How do I read betting odds?

Standard sports odds formats are utilized at the sports betting sites. Even if you are new to online gambling, you will find that the betting menus used for displaying odds are intuitively designed to make it easy to read the odds.

The top betting sites that we review have similar layouts. When you reach the homepage, you will see a betting board with the day’s matchups listed in chronological order.

Point Spread Odds

There are two different ways that sports odds are used to balance out the win probability differences, and one of them is betting against the point spread. The underdog will get extra points from the outset, and the favourite will surrender the points.

If a seven point favourite wins a game by exactly 7 points, this is considered a “push.” People that have placed bets on either side would have their money returned to them.

When football and/or basketball are in season, there will be framed betting lines under three different headings: spread, total, and moneyline. This is a basic depiction of what the point spread will look like:

Tampa Bay Buccaneers -4

Los Angeles Chargers +4

In this game, the Buccaneers are the favourite. They are giving four points, and the Rams are getting four points. If you bet on the Bucs, in order to win, they must win the game by at least five points.

Moneyline Odds

The other way that the online sportsbooks even the playing field is through the utilization of moneyline betting, which is a wager on a team to win the game outright with no spread. This is the format that is widely used in Canada, and there are foreign counterparts.

If you bet on the favourite using these American odds, your return will be less than even money (negative odds). Contrary, you will receive more than even money (positive odds) if you wager on an underdog.

Online sportsbooks will always list the home team on the bottom regardless of their status as a favourite or an underdog.

This is what the American odds would look like for our hypothetical NFL game:

Tampa Bay Buccaneers -216

Los Angeles Chargers +170

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

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Totals Odds

The total is an estimate of the total number of combined points that will be scored by both teams. You can wager on the over or the under when you are betting on the totals. There is a similar style to moneyline wagers used for a totals bet, because there are two options and you can bet either side, and it is standardized with ongoing adjustments to balance the action.

You will see something like this:

Over 41.5 -110

Under 41.5 -110

We will explain the adjustments and the concept of “balancing the action” in an upcoming section.

Proposition and Futures Odds

A proposition bet 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 propositions of this nature.

You’ll see futures style wagers as well as moneyline styles as you can bet from a list of players or bet sides:

Anytime Touchdown Scorers

Alvin Kamara -215

D.K. Metcalf +150

Tyler Lockett +175

Alex Collins +190

There would be many more players listed, but this is a simple example to give you an idea of how propositions look on a betting board.

A futures bet is a wager on a team to win their league, conference, division, or overall championship, and depending on the bet, you’re choosing from a list of teams.

Parlay Odds

A parlay is a bet with more than one betting interest 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 of your selections have to be correct. Each betting site will have its own precise rules for parlay betting, but these are the standard Las Vegas odds for parlays on the spread:

2 Team Parlay 2.6-1

3 Team Parlay 6-1

4 Team Parlay 11-1

5 Team Parlay 22-1

6 Team Parlay 45-1

7 Team Parlay 90-1

Parlays using money line or American odds are calculated on a case-by-case basis, and the input tools on the sports betting sites will automatically do the math for you.

Identifying a Sports Betting Favourite

It is very easy to identify the favourite in any matchup. The favourite is the team with the negative spread or negative money line. There are no exceptions to this rule.

Identifying a Sports Betting Underdog

When you are entering unfamiliar territory, you can overthink things at times, and this applies to online sports betting. It is understandable, but the basic concepts are very simple.

The underdog will always receive points or generate a positive money return.

What does -110 mean?

We delayed the explanation of the standard money lines that are attached to totals because this is an important concept that deserves its own section. The -110 on both sides of the money line for totals is there to allow the sportsbooks to make a profit, and it is called the “vigorish” or “juice.”

To explain through the use of an example, let’s say that 10 people wager C$110 on the Chargers-Bucs game over 41.5, and another 10 sports bettors put C$110 on the under.

The sportsbook is holding C$1100 in wagers on the over, and the same amount on the under, which is a total of C$2200. After the Saints beat the Seahawks by a final score of 31-17, the winning bets on the over are paid. The 10 winners get C$210 each: the C$100 in winnings, and the original C$110 that they bet

If you do the math, that is 10 times C$210, which is C$2100. Before the game, the sportsbook was holding C$2200 from these 20 sports bettors. In the end, it made a C$100 profit without taking any gamble at all.

That may not sound like a lot of money, but this is just a tiny fraction of the total number of bets that a sports betting site will take on a given day.

The standard vigorish that is traditionally attached to spread bets is -110, and there is vigorish built into the moneyline wagering. The vigorish is generated by a gap in the relative payouts to underdog and favourite bettors.

Odds Changes to Balance the Action

Our example was neat and tidy with equal amounts of people magically betting on both sides of the total, but in real life, it is not that simple. The sportsbook wants to see equal sums wagered on both sides of every matchup, and the odds that are posted are intended to accomplish this goal.

However, if more people are betting on one side, the sportsbook will adjust the line to try to entice people to bet on the under-supported side. The -110 on both sides may be changed to -120 on the more popular side and even money on the other.

If that adjustment doesn’t work and the line is still unbalanced, the point spread will be adjusted.

Do line movements provide insight that will make you a more successful sports bettor? There are two different schools of thought when it comes to following the cash flow.

It takes a lot of money to move the betting line, so you may assume that the “smart money” is on the side that is being heavily supported. This can make you think that you should follow their lead. In sports gambling parlance, this is called “chasing steam.”

There is also the contrarian point of view. Some sharp bettors have found that they have more success going against the grain in these situations. They do the exact opposite of what the majority of players are doing under the premise that they are siding with the sportsbook.

Who has more success in the long run, the bettors or the bookies? The sportsbooks are exposed to risk when the action is unbalanced, but they always seem to come out on top at the end of the day.

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How do odds work for each Sport?

There are different traditional odds formats used for each respective sport that you can bet on at the top sportsbooks. Once you understand the basic framework, everything will fall into place and you will read betting odds effortlessly.

Football Betting Odds

The odds format for college football games is exactly the same as the NFL game. There are point spreads, and you can make straight bets, totals, prop bets, Super Bowl odds, and other futures.

Basketball Betting Odds

The odds for NBA betting and college basketball are pretty much the same as they are for football. There is a spread, and we should point out the fact that you can bet teasers on sports that have point spread betting.

A teaser is a wager with multiple entries on the same ticket, and you get extra points against the spread. The payouts reflect the fact that you have an advantage. For basketball, traditional odds makers would offer teasers of 4 up to 6 points at the land-based sportsbooks.

Now, online sportsbooks may offer higher numbers of points depending on the policy of the book in question.

NBA futures betting allows you to bet on an outcome that occurs in the future, whether that be months or weeks before the event actually occurs. These are available for March Madness betting as well.

Baseball Betting Odds

While there technically aren’t point spreads for MLB Betting because of the nature of the game, there are runlines, which makes sense due to the nature that the game tracks runs rather than points.

The standard fixed run line is 1.5 runs, and this means that the underdog is getting 1.5 extra runs, and there are also 1.0 lines in the closer matchups. In order for the favourite to cover the bet, they have to win by at least two runs, and there is a moneyline attached to these bets.

Here is an example:

Dodgers at Cubs

Dodgers -1.5 (-130)

Cubs +1.5 (+104)

Because of the negative odds, you have to lay C$130 to win a C$100 if the Dodgers win by at least 2 runs, and you win C$104 for every C$100 that you wagered on the Cubbies if they do not lose by more than 1 run.

You can bet on plenty of totals, moneylines props and specials for each MLB game as well.

NHL Betting Odds

In the same manner that basketball and football bets carry the same types of odds, NHL betting is in line with baseball. For hockey games, the run line equivalent is called the puck line.

Horse Racing Odds

Some of the online gambling sites operate race books along with their sportsbooks. The horse racing odds are fractional. The numerators (first numbers) can be any single digit, and the denominators (second numbers) are either 1, 2, or 5.

It is very easy to understand how fractional odds work. If you bet on a horse that is 10-1, you will win C$10 for every C$1 that you wager. For a horse that is going off at 7-2, you win C$7 for every C$2 that you bet, and so on.

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Sports Betting Odds Formats

All betting odds convey the same information, but it can be expressed in more than one way. There are three different formats that are used when you include the U.K. and the rest of Europe, but the US and the new Canadian sports betting sites all utilize the same method.

American Odds

American odds are expressed through the straight wagering method that we have looked at in a previous section. But to recap, the moneyline is a negative number on the favourite, and a positive return on the underdog.

Las Vegas Raiders +150

Kansas City Chiefs -180

This is an example of American odds on an NFL game. Kansas City is the favoured team, and you have to bet C$180 to win C$100 if they emerge victorious. A C$100 bet on Las Vegas would yield a C$150 win and a C$250 total payout if they come out on top.

Decimal Odds

The decimal odds system is widely utilized in Europe outside of the United Kingdom along with Canada and Australia. This is a very easy system to understand because the return of your original stake is included in the format.

For example, if France is offered at 5.0 odds to win the UEFA European Championship, you would collect C$5 for every C$1 that you bet on them if they take the crown.

Fractional Odds

Fractional odds are alternately referred to as UK odds. This is the same format that is used for American horse racing, and we have explained how fractional odds work in another section.

Converting Odds Formats

If you feel comfortable with a certain odds format, but you have no experience with the other formats, you may be a bit uncertain if you run across the unfamiliar ones. This is understandable, and it is relatively simple to convert the different formats if you don’t have access to a betting odds calculator.

American to Decimal Odds

To convert positive American odds to decimal odds, you divide the number by 100 and add 1. Let’s say the moneyline odds are +600. To convert this to decimal odds: 600/100 = 6+1 or 7.0 in decimal odds.

For negative American odds, you divide the odds without the decimal or negative sign into 100 and add 1. This is the equation to convert odds of -1.40: 100/140 = .71 + 1 converts to 1.71 in decimal odds.

Fractional to Decimal Odds

To convert fractional odds to decimal odds, you divide the second number into the first number and add 1. So if the fractional odds are 5-1, you have this formula: 5/1 = 5 +1 or 6.0.

Decimal to Fractional Odds

The general rule of thumb for converting decimal odds to fractional odds is very simple. You just subtract 1 from the decimal. Using the 6.0 that we arrived at in the last section, you subtract 1, and you have 5, and you just have to add the /1.

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Calculating Implied Probability

The odds are based on the concept of implied probability. They indicate how likely it is for the desired outcome to take place based on the data that is used to calculate the odds.

Using fractional odds to explain implied probability, a race horse that is going off at 7/1 has an expectation of winning 1 out of every 8 races under the same circumstances. That comes out to a 17.5 percent chance of winning, so that would be the implied probability.

Comparing Odds (Line Shopping)

Depending on the state that you live in, you probably have many different sports betting sites to choose from. A lot of people start an account at the sportsbook that catches their attention initially, and they never feel as though there is a reason to check out the other sites.

This may make sense on the surface, but there is a key element that can be overlooked by people that are new to sports betting.

All of the sports betting odds are not exactly the same at every betting site. They vary depending on the site in question and the action that they are taking on a given event. Some sites will consistently offer less favourable odds because of their policies.

You should definitely shop around for favourable odds because experienced gamblers will tell you stories about losing bets by a half-point on more than one occasion. Plus, if you look for the best sports betting odds on every wager you make, relatively minor advantages will add up over time.

There is another reason why you should open accounts at multiple sports betting sites. They all offer sign up bonuses that will typically be free bets, risk free bets or deposit matches. This is a great way to get some stress-free action, so you should take full advantage of these opportunities.

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Hi, I'm Dean Ryan

"A passionate sports betting broadcaster and journalist with over 15 years spent in the gambling industry."

  • Sports Betting
  • Odds Compiling
  • Horse Racing

Reviewer since June 2016