How to Read Betting Odds

Published: 06/09/2010

You do not have to be a math genius to wager and win at casinos or sports books. Simply bet on a hunch, trust your luck, and you might walk away with more money that you started with…or not. But for those who seek a more consistent way of winning and to become successful at any form of gambling, online or off, understanding betting odds is a crucial first step.

Odds are a numeric way of expressing probability—the likelihood that an event will occur or not occur. For example, if you flip a coin, it may come up heads or tails. If you wanted to throw tails, there is one way to succeed and one way to fail. Either outcome is equally likely so we say the odds are 1-to-1 or so-called “even odds.”

The odds can also be written as a ratio, a fraction, a percentage, or a decimal. There are two possible outcomes, of which tails is one of them. Tails should come up 1-out-of-2 times, or 1:2, or ½, or 50%, or 0.5. These all mean the same thing. They are just different modes of expression.

Similarly, if you throw a die, it may come with any of its six sides showing face up. If you wanted to throw a three, for instance, there is only one way to succeed and there are five ways to fail. This is most commonly expressed as “odds of 5-to-1 against.” Other ways to express it are as a probability of 1-out-of-6, or 1:6, or 1/6, or 16.7% or 0.167.

In both of these examples, the numbers tell you exactly how likely it is that the events will occur…so-called “true odds.” In most betting situations, however, the odds that are offered to you are not true odds. At the Roulette table, if you bet on the colour Black, the casino will pay you even money (1-to-1) every time you win. But the true odds are less than 1-to-1. Only 18 of the 37 numbers on a European roulette wheel are black—18 ways to win and 19 ways to fail. That makes the true odds 19-to-18 against.

This built-in discrepancy between true odds and odds offered is known as the “house edge.” By putting the player at a slight disadvantage, it ensures that the casino earns a profit. In European Roulette, this edge is 2.70%. In American Roulette, it is 5.26%. In Blackjack, depending on the house rules, it ranges from 0.15% to 5.48%. Slot machines tend to average around 3%.

When it comes to it comes to race and sports betting, odds can be a bit more complicated, but the same principles apply. Bookmakers employ specialists called “oddsmakers” to calculate the likelihood of a team or a runner winning. The odds that they offer you have been adjusted slightly from what they believe are the true odds in order to include their margin or commission, the so-called “vigorish” or “juice.”

The most common form of sports betting odds are “fixed odds.” The prices are set before the event begins and become final as soon as you place your wager. Fixed odds are typically expressed in one of three forms: decimals, fractions, or (especially in America) money lines.

Decimal odds, most commonly used throughout Europe, tell you how much a win will pay in total for each unit wagered, no matter whether the unit is £1, £10, or £100. For example, if Liverpool are favoured to win at 1.40, then a £100 bet will return £140 in total. To calculate the potential of a £15 wager, multiply the bet by 1.40 and you can expect to get back £21 in total.

Fractional odds are often used mainly by U.K. bookmakers to indicate how much profit will be earned. Odds of 2/5 on Liverpool mean you stand to profit two units on every five units wagered. A bet of £100 is equivalent to five units of £20, so a win would be worth two units of £20 or £40 in profit, the same as £140 in total.

In the United States, money line odds can be either positive or negative numbers. A positive money line, typically used for underdogs, shows how much profit can be won on a stake of 100 units. A negative money line, most often used for favourites, shows how much must be wagered to win 100 units. In the Liverpool example, a negative money line of -250 would be offered, meaning a wager of £100, which is equal to 250 units of 40p, would win 100 x 40p = £40.

Back to the original example of flipping a coin, in the three different systems, even money bets at true odds would be expressed as follows: decimal = 2.00; fraction = 1/1 (“evens”); and money line = -100 or +100. After the bookmaker adds in a 5% commission, the odds offered would look like this: decimal = 1.90; fraction = 9/10; and money line = -110 or +90.

One other form of wagering on sports is called “spread betting.” It does not equate to odds in a traditional manner. Instead, it offers a number of points, plus or minus, that will be added to or subtracted from a team’s score at the conclusion of a match. An offer of “Liverpool -1.5” would mean that they must win by at least two goals in order to collect on the bet.

Published on: 06/09/2010

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