Betting Odds Explained – How do Betting Odds Work?

The betting industry is lavished with promotions, bonuses, and features that aim to entice new players to sign up. But the reality is, it’s all about betting odds and the price that you get from the sportsbook that is make or break.

In this article, we’re going to look at how betting odds work and how to properly understand the meaning behind the odds. We’ve included multiple iterations, real-world examples and give you a preview of which sites have the best odds.

What are Betting Odds?

Betting odds are used for two simple reasons. The first is to showcase the probability of that selection and the second is to highlight the returns for the punter.

There are multiple ways that odds can be shown, which include fractional, decimal, and American styles. We talk more about this later in the article, but for now it’s important to note that while they look different the odds for each format are the same.

Odds displayed at BetOnline

For example, an even money bet would be +100 American, 2.0 Decimal, and 1/1 (Evens) in fractional.

The odds will highlight the probability that the betting site thinks the result will happen. One of the more basic examples we can use for this would be a simple coin toss.

There are only two outcomes of a coin toss, heads, and tails. The chance of landing on each is 50/50. The bookmaker would then give odds of Even money or +100/2.0 depending on what style was being used.

There is, however, a caveat to this, which involves the betting sites’ cut, usually referred to as “Juice”. A small fee is charged on each bet, which means that for a market like a coin toss, you’ll never get even money and instead get just shy of that which takes into account their cut. Again, we’ve more on this later in the article.

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How are Betting Odds Calculated?

Whatever types of odds you use, these are initially based on probability. So, the price that you see with the betting site is the chance that they think the bet has of winning.

Initially, the betting site will work out probability as a percentage and then use an odds converter to then highlight this as a price. The higher the probability, the lower the odds. The lower the probability, the higher the odds.

For example, let’s say that we want to bet on the NFL season and pick a winner for AFC East Division. The image below is taken from BetOnline and includes the odds for this market.

NFC futures market.

Let’s use the odds that they’ve given to see the probability for each result.

Team Odds Probability
Eagles -185 64.94%
Cowboys +150 40.00%
Commanders +2000 4.76%
Giants +10000 0.99%

So, when we talk about how do betting odds work, we need to look at them as a probability as much as the odds. As you can see from the table above, the probability highlights the chance each team has of winning the AFC East, and then from that the odds are formed.

How to Read Betting Odds

Online sports betting odds come in three different formats at the best offshore sportsbooks. We’ve outlined these below explaining how do betting odds work and a real-world example of each.

Choose from American, decimal, and fractional odds at Bovada.

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American

American odds are displayed as a positive or negative number. The positive number is the amount of money you will if you place a $100 bet. The negative is the amount of money you need to wager to make a $100 profit.

Some markets will include both negative and positive odds. In this scenario, the negative odds are the favorite and more likely of winning. With American betting odds and markets where there are online positive odds, the lowest number is the favorite and then works up from that.

betting odds

The example above is from an upcoming NBA game between the Chicago Bulls and Charlotte Hornets. There are two sets of odds, one for spread betting and one for the moneyline.

As you can see, the Spread is priced at -105 for an +/- 10.5 line. This means that you need to wager $105 to make a $100 profit. The moneyline odds are -500 for the Bulls to win outright ($500 wager needed to make a $100 profit) and +375 for the Hornets to win ($375 profit for every $100 wagered).

It’s worth noting that don’t need to wager $100 or more for these bets, but it’s the easiest way to work things out in the American format. If you were to bet just $10 on the Hornets to win at +375 then your returns would be $37.50. Those underdog odds may prove value.

Fractional

Fractional odds are used more frequently in the UK and are represented as just that, a fraction. How to read betting odds like these is very easy as the right column is the amount you need to wager to win the figure in the left column.

For example, if you have odds of 5/1, then for every 1 unit you bet, you win 5 units. If you bet 10 units, you would win 50 units, and so on.

There will be times when the number in the right column is bigger than the left. When this happens this is what is called odds-on (a bet that is very likely going to win). As an example, this might be 8/13, where you would need to wager 13 units to win 8.

fractional odds

Our example for this comes from an upcoming NBA game between Oklahoma City Thunder and the Indiana Pacers. As you can see, the spread at +/- 2.5 is priced at 10/11, which is just worse than even money. The moneyline bet is 13/20 for the Thunder to win and 5/4 for the Pacers to win. This would highlight that the Thunder are strong favorites to win the game outright.

One thing you need to note with fractional odds is that it doesn’t include your stake back. So, if you were to bet $10 at odds of 5/1, you would win $50 from the bet as profit, plus your $10 original stake, for a total of $60.

Decimal

Decimal odds are used across Europe and Asia, for the most part, although they are becoming more popular in US-based sportsbooks, mainly down the ease of use. As the name would suggest, these odds are showcased as a decimal and they tell you how much your total returns are (stake included) per unit staked.

For example, if you’ve odds of 4.0 then for every 1 unit staked you get a return of 4 units. With decimal odds, you need to note that this is the total return and includes the original stake. So, this would be a breakdown of 3 units of profit and 1 unit from the original stake.

decimal odds

The above example is from the upcoming betting on the Premier League game between Manchester City and Liverpool. As you can see, a Man City win is 1.61, a Liverpool win at 5.00, and the draw at 4.20. If you were to bet $10 on each, it easy to work out the return in a decimal format. These would be $16.10, $50, and $42, respectively.

Converting Odds to Winnings

We’ve talked about how betting odds work, but now we need to address how to read betting odds and convert them to winnings. As we’ve already outlined, there are multiple variations of how they are showcased, but they all mean the same.

The amount you win is based on the prices you take regardless of odds types. Let’s use an example of betting on the American League Central winner in the MLB this season.

MLB Odds

As you can see, the odds in sports betting vary massively based on each team’s probability of winning. It’s implied that some aren’t even worth considering a wager on. Taking these sports betting odds into account, we can see that only three teams have a realistic chance of winning in the Guardian, Twins, and White Sox. The Tigers and Royals, based on their Vegas betting odds alone, are outsiders at best.

The table below highlights how much you would get as winnings if you placed a $100 bet on each result.

Team Odds Returns from $100 Bet
Guardians +125 $225
Twins +200 $300
White Sox +250 $350
Tigers +3000 $3100
Royals +3000 $3100

How to Place a Bet Online

The process of placing a bet is relatively straightforward. The odds that you get at the time of placing the bet are fixed. The example below highlights how to choose the best sports betting odds using BetOnline.

1.   Register an Account

Sign up for BetOnline and create a new account. You need to click on the “Join” button and then simply work through the prompts which should take no more than a minute or two.

Sign up forms at BetOnline.

2.   Deposit

You now need to deposit funds into your betting account. When you’re signed in, head to the cashier and choose the payment method of choice. Deposits will be processed instantly.

Cashier section displayed at BetOnline.

3.   Choose Your Sport and Market

Use the sportsbook to look through potential bets that you want to place. You can use the navigation bar down the left or across the top for this.

NFL futures market.

4.   Choose Your Odds and Add to Bet slip

The odds for each selection are in the boxes next to the event. Once you’ve found a bet that you’re happy with check the odds and then click on them to add to bet slip. Within the bet slip choose your stake and then confirm your bet.

Betslip at BetOnline

Real-World Betting Odds Example

We’ve included an example of how betting odds work below, as well as betting odds explained throughout each one. Use this as a guide to see how bets are placed within the best online sportsbooks and how the odds reflect the probability and returns.

nhl betting odds

The game we’re going to look at is an NHL game between the New York Rangers and Buffalo Sabers. We’ve included the three main betting markets which are spread bets, totals, and the moneyline.

Team Spread Odds +/- 1.5 (Implied Probability) Total Odds O/U 6.5 (Implied Probability) Money Odds ( Implied Probability)
New York Rangers +165 (37.7%) Over -130 (56.5%) -145 (59.2%)
Buffalo Sabers -200 (33.3%) Under +105 (48.8%) +120 (45.5%)

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The table above breaks down each of the live betting odds for each result. We’ve also included the implied probability of that result based on the odds as well.

Converting Betting Odds to Probabilities

Betting odds are essentially just ways that the bookmaker is able to convey the probability of the result. You need to be aware that probability in sports betting is based on stats, data, and knowledge, but at the end of the day are an estimate as to how each of the markets might play out and are most definitely subjective.

The probability is simply the chance of success for each result. An easy example of this would be a roll of a die that has 6 sides and an equal 16.67% of rolling any single number at any time.

Probability can be worked by using a relatively simple math formula for fractional odds.

  • Probability (%) = B / (A+B)

For example, a 5/1 bet would look like this:

  • 1 / (5 + 1) = 0.167% = 16.7% chance of winning

The table below includes every common format of odds across an American, Decimal, and Fractional base, along with the implied probabilities of each of these odds.

Fraction Decimal American Implied Probability
1/4 1.25 -400 80%
1/3 1.33 -300 75%
4/6 1.67 -162.5 61.9%
1/1 Evens 2 +100 50%
7/5 2.4 +140 41.7%
2/1 3 +200 33.3%
4/1 5 +400 20%
10/1 11 +1000 9.1%

Odds Conversion Tools

Learning how to read betting odds and then convert them is a skill that takes a lot of time to master. The round numbers are relatively easy to switch between all three, but when you start getting involved with short-priced odds on bets, it can be much trickier as the margins are smaller.

It’s for this reason that we recommend using an odds conversion tool. There’s a huge range of betting odds calculators on the market which will not only convert the odds for you but also highlight the implied probability of those odds.

Sports Betting Odds and Markets

The list below includes a range of the more popular sports to bet on along with different markets attached to each along with how do betting odds work.

  • NBA – The NBA is mainly made up of totals, spreads, and moneyline bets. There are also prop bets, which include points per game, assists per game and MVP.
  • NFL – NFL betting odds are some of the most competitive, mainly down the volume of bets placed. These markets include points spread, totals, and moneyline, along with passing yards, rushing yards, and next scoring play for prop bets.
  • MLB – The MLB has hundreds of games to bet on each year and as a result, favorable odds given the relatively low volume of wagers on each market.
  • NHL – The smallest of the “big four” sports to bet in the US. However, NHL betting odds are competitive still given the volume of games and limited markets.
  • March Madness – College basketball is the biggest across March Madness. There are dozens of games to bet on and the betting odds explained are incredibly competitive.
  • Golf – The four majors (Masters, The Open, US Open, and PGA) are the biggest betting opportunities of the season. Outright winner and group betting are the largest markets.
  • UFC – The popularity of the UFC grows year on year and benefits from prop bets, such as round betting and method of victory, rather than the overall winner.
  • Horse Racing – Horse racing betting odds can vary massively from racebook to racebook. Popular bets include place, win and show.
  • Tennis – Tennis is one of the few sports that is played 52 weeks of the year and as a result, has huge betting options with most sites. Betting odds can be favorable during lower-ranked events with value to be had. We have more on how to bet on tennis on the site.
  • Politics – Election betting odds from around the world can be wagered on. These include things like Prime Minister, the next President, and local elections.

How to Convert Fractional to Decimal Odds

The process of converting fractional odds to decimal can be done using the following formula:

  • (A/B) + 1 = C
  • For example, 5/1 odds would be (5/1) + 1 = 6.0
  • 7/5 would be (7/5) + 1 = 2.4

How to Convert Fractional to American Odds

To convert fractional odds to American odds you need to first determine if the odds are greater or less than 1/1 (even money). If they are greater (E.G. 2/1) then you need to use +100 within the formula and if they are less (2/5) then you need to use -100.

  • For odds that are greater than 1 use +100
  • G. 2/1 odds = (2/1) *100 = +200
  • For odds that are less than 1 use -100
  • g. 1/2 odds = -100 / (1/2) = – 200

How to Convert American Odds to Decimal Odds

Just like converting fractional odds to American odds, to convert American to decimal you need to determine if the original price is a positive or negative number. Let’s use odds of +500 and -500 for these examples.

If a positive number:

  • (+A /100) +1
  • (500/100) +1
  • 5+1 = 6.00

If a negative number:

  • (100/+A) +1
  • (100/500) + 1
  • 2 + 1 = 1.2

Why do Betting Odds Change?

Betting odds change all the time and there are generally a couple of reasons for this.

The first is that something has happened to that bet that has either strengthened or weakened the chances of the result. For example, if Patrick Mahomes gets injured for the Kansas City Chiefs, their chances of winning will reduce, which means the odds will lengthen (increase).

The second is based on the volume of bets taken. The sportsbook is constantly trying to get equal exposure on all results for a market. This means that they are guaranteed to make a profit.

If a huge volume of bets or even a massive single bet is placed on one result, it might mean that they are overexposed. To combat this, they will shorten the line on this market to make it less attractive and they will lengthen the line on the alternative results to make them more attractive.

Betting Odds for Parlay Bets

There’s more than just single wagers to consider with parlay bets, where you create a single coupon with multiple selections, also popular. For it to win, you need all your picks to come in. If just one or more loses, then the whole bet loses.

Parlay bet at BetOnline.

One of the most common questions we get is how do you work out the odds for a parlay bet?

Well, the easiest way to start is to switch odds from American to decimal. Then all you need to do is multiply each price by the next.

For example, if you have five even money shots it would look like this:

  • 2 x 2 x 2 x 2 x 2 = 32.0

Most sportsbooks will allow you to add selections to their bet slip and then see the parlay odds automatically. Alternatively, you can use a calculator to find out the odds.

Juice Charged

When you consider how do betting odds work, you need to know how the betting site makes money to get a true overview.

The sportsbook charges “Juice” or “Vig” on all bets. This is essentially their cut. They do this by offering odds just shy of the true value and creating a market where they make a small profit on all possible results.

To get an idea of how this works, one of the easiest examples to use is that of the coin flip. Now, a coin flip in its truest form is 50/50 or even money (+100). The chances of it landing on heads is the same as they would tails.

But a betting site wouldn’t offer you even money on this, they would offer you around -110 on both heads and tails. Let’s see how that would work out money-wise if $1,000 was wagered on both results.

  • $1,000 wagered on Heads at odds of -110 = $909.09
  • $1,000 wagered on Tails at odds of -110 = $909.09
  • Profit = $1000 – $909.09 = $90.91

As you can see, the profit on either heads or tails, regardless of the outcome assuming $1,000 wagered on each, is $90.91. This is how a sportsbook makes money.

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FAQs

What does +/- mean in betting odds?

How do betting odds work for beginners?

What do +200 mean for betting odds?

What does it mean when betting odds are negative?

What are fixed betting odds?

How do sports betting odds work?

Who sets the odds for sports betting?

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Jonathan Askew
Sports Betting and Casino Expert

Jonathan is a freelance writer working with Techopedia. He has been working within the gambling sector for over 15 years and has been fortunate enough to work with brands that include Gambling.com, CheekyPunter.com, BasketballInsiders.com and Betfair. He specializes in US and UK-based sports and casino content for Techopedia.