Betting Odds Explained

If you’re new to betting, one of the very first concepts you should get familiar with is how betting odds work. Laying wagers on sporting events is a numbers game after all, and understanding these numbers is essential for players looking to get the best return for their money. Betting odds help you understand how likely an event is to occur and allow you to calculate your potential winnings. 

Looking at these figures, whether fractional, decimal or American, can often be pretty intimidating, but it’s actually pretty straightforward. Let us break things down for you, so you can head to the bookies and make the best value bets.

Understanding probability

Before we get into how you can use odds to calculate your potential returns, it’s important to remember that this isn’t the only purpose that odds serve. Odds tell you, according to the bookmakers’ calculations, how likely an event is to occur. For any given event, there are a certain number of outcomes. If you flip a coin, for example, there are two possible outcomes. If you bet on the coin landing on heads, there’s a 50% chance of that happening. Odds simply represent this probability in another format. Virtually every UK bookie chooses fractions and most offer conversion to decimal odds too. 

Fractional odds

When it comes to having betting odds explained, many people have fractional odds in mind. This is how odds are traditionally displayed at UK bookmakers. 2/1, 2/9 and 7/2 are examples of fractional odds as you might see them on sports betting sites.

Deciphering fractional odds is simple – the number on the right corresponds to your wager, and the number on the left corresponds to what you’ll win. You simply divide the former by the latter and multiply it by your stake to work out what your profit will be if you get lucky.

• If you bet £10 at 2/1, your profit is 2 divided by 1 multiplied by 10 = £20
• If you bet £10 at 2/9, your profit is 2 divided by 9 multiplied by 10 = £2.22
• If you bet £10 at 7/2, your profit is 7 divided by 2 multiplied by 10 = £35

These profits are on top of your original stake, which you’ll also get back. So, in the case of winning on odds of 2/1 with a £10 bet, your actual return would be £30. 

Decimal odds

Working out how to read odds is even more straightforward when you’re dealing with decimal odds. In fact, one of the reasons this format has grown in popularity is because it’s so easy to calculate. When working out what your return will be with decimal odds, you just have to multiply the number by your wager. The result will be your total return, including your original stake. 

This is an important point of difference with fractional odds, as the latter tell you how much you’ll get back in pure profit from your wager, not including the original stake. If you want to know what your pure profit will be from decimal odds, multiply your wager by the odds minus 1.  

• If you bet £10 at 3.0, your return will be £30 (including £20 profit)
• If you bet £10 at 1.5, your return will be £15 (including £5 profit)
• If you bet £10 at 2.88, your return will be £28.80 (including £18.80 profit)

American odds

When having betting odds explained, it’s worth getting a handle on American odds, also known as money line odds. While they’re obviously most commonly found in the US, they’re still a key part of the online sports betting world, and useful to understand.

American odds are expressed in positive and negative numbers. Positive numbers are for underdog bets, and show what you’d win for every £100 wagered. Negative numbers are for odds on favourites, and show what you’d need to wager to win £100.

• If you bet £10 at -200, your profit will be £5
• If you bet £10 at +200, your profit will be £20

Implied probability

Whenever odds are worked out by bookmakers, they’re estimating the chances of a result taking place. This is known as the implied probability, which is expressed as a percentage. Different calculations can be used to figure out the implied probability, depending on the odds format you’re using.

To calculate the implied probability from fractional odds, you divide the number below the line of the fraction by the total of both numbers of the fraction, and multiply that by 100.

• If the odds of a result are 3/1, the implied probability is 25%

To calculate the implied probability from decimal odds, you divide 1 by the decimal odds and multiply that by 100.

• If the odds of a result are 2.50, the implied probability is 40%

To calculate the implied probability from negative American odds, you divide the odds by the odds-plus-100, and multiply that by 100.

• If the odds of a result are -175, the implied probability is 64%

To calculate the implied probability from positive American odds, you divide 100 by the odds-plus-100, and multiply that by 100.

• If the odds of a result are +110, the implied probability is 48

Example conversion pairings

While it’s essential to know how to read odds before laying any bets, you don’t have to memorise the conversion calculations required to switch between them. Sports betting sites will often let you simply select the odds format you prefer, while Compare.bet’s own odds calculator comes in handy if you’d like to quickly make comparisons between the different types.

To give you an idea, here are examples of how two different odds look across the various formats:

The history of odds

The terminology of odds has been with us for a very long time. It even crops up in Shakespeare, with the play Henry IV Part 2 featuring a character discussing the odds of survival as “ten to one”. However, it was much later, in the late 18th Century, that an enterprising fellow named Harry Ogden applied the mathematics of probability to betting in the way we recognise today. He became the first modern bookie when he set up his pitch by Newmarket races and offered individual odds on all the runners – odds that depended on their chances of winning.

This was a leap forwards because until then the usual convention was to offer a straight, binary choice between one favourite and the rest. Ogden’s innovation popularised the kinds of fractional odds that have been synonymous racing bets, and other sports bets, ever since. 

While the rise of decimal odds has been embraced by younger pundits in the modern era, many purists still prefer the traditional fractional odds. In fact, it was headline news when Ascot bookies first offered decimal odds rather than fractional odds back in 2010. 

How do odds work, in-play?

One of the most exciting innovations in sports betting is the advent of in-play betting. This ratchets up the thrill, because you can actually place wagers when the sporting event is underway – for example, after a football match has started. The odds will be in a constant state of flux, depending on the second-by-second developments of the game or match, which makes in-play or live betting arguably the most adrenaline-charged way to wager. It can also bring advantages for you as a punter.

For example, if the favourite starts to lose during the game or match and their odds get longer, you can bet on them at this point and potentially rake in a greater profit if they then turn things around and live up to initial expectations by winning.

The combination of ever-faster broadband connections and super-smooth mobile betting apps have made in-play betting feasible. Thanks to this tech, the latest events from the game or match can be almost instantaneously processed by the betting site, and players can watch the odds change in real-time on their computers or mobile devices. The dawn of 5G is set to boost this aspect of sports betting even further, as it’ll make the whole process even swifter and more reliable.