What are odds?

what-are-betting-odds

Fractional? Decimal? We explain it all here.

Betting odds are used to show the implied probability of an event occurring and how much you will win if you are correct. For people new to odds, the first thing you need to do is understand how betting odds work in order to understand how likely an event is to happen. Have a look at our odds guide and it will soon to become clear!

What is probability?

probabilityBetting provides you with the chance to predict an outcome of an event, and if your prediction is correct you win money. In a betting market, there are a given number of options available for you to bet on.

Lets imagine that the market was for betting on the outcome of the roll of a dice. When you roll a dice, there are 6 possible outcomes. If you were to bet on a 6 being rolled there is a 16.66% probability of that event occurring. What betting odds in the UK do is turn that probability into decimal or fractional format to show you how likely that event is to happen. So the odds of a dice roll will be 5/1 or 6 as a decimal format. To work out the implied probability of an event occuring simply divide 100% by the decimal odds of a selection. e.g 100% divided by 6 = 16.66%

Fractional Odds vs Decimal Odds

differencesHistorically, fractional odds have been used in the UK, especially in your more traditional on course of high street setting. However, with the introduction of online betting, decimal odds became a lot more popular. This is largely due to the fact they are easier to understand and bookmakers have been making moves to attract your more recreational punter. Also the introduction of betting exchanges such as Betfair really helped with this as you are able to display more precise odds without having created complex fractions which may confuse the customer.

Fractional odds also only calculate your net profit rather than the return of your bet. This differs from decimal odds which combines the returned stake with your winnings when calculating your return.

Fractional Odds

fractional-oddsFractional odds are displayed as 6/1 or 5/2 for example. The easiest way to understand this is by thinking of it as ‘Winnings/Stake’. So if the odds were 6/1 and you placed £1, your winnings would be £6 and your stake represented by the £1.

As previously mentioned, your winnings do not represent your stake, so you add your stake on to that £6, and should expect a total return of £7 (Winnings+Stake). Sometimes, you will see the numbers and wonder why they are the wrong way around. So 1 /2 or 1/3. This simply represents an ‘odds on’ shot and the ‘Winnings/Stake’ way of thinking is still exactly the same. So for odds of 1/3 it signifies that you will win £1 profit if you stake £3.

You can convert any fractional odd to a decimal odd simply by dividing the first number by the second and then adding 1 (the 1 represents your stake). So for 7/2 it would be: 7/2= 3.5 + 1 = 4.5

OddsStakeReturnProfit
10/1£1£11£10
7/2£1£4.50£3.50
9/4£1£3.25£2.25

Decimal Odds

decimal-oddsBut not to worry, if you struggled with Fractional odds, you will be sure to understand decimal odds. Not only are they easier to understand but they are quicker to work with. For instance, if I asked you what was the bigger, 11/5 or 9/4 it would take you a minute wouldn’t it? But if you see them in their decimal form as 3.20 & 3.35, you can see straight away!

And such is the simplicity of decimal odds that the equation for calculating any returns is much easier to grasp. It is simply Stake x Odds. So for example, a £10 bet stakes at 3.00 would return £30. So as you can see, with decimal odds your stake is automatically included in your returns!

OddsStakeReturnProfit
5.0£10£50£40
2.7£10£27£17
4.0£10£40£30
1.4£10£14£4

US Odds

us-oddsAmerican odds are another common way to express odds. They use a baseline value of $100 and use that to show how much money you must place to win a set amount. Favourites are shown with a – symbol before the odds, where as underdogs shown with a + symbol before them. For example, if a favourite is -135 that means you must place $135 to win $100. It is important to remember that the amount you win on favourites is the amount with the – symbol and your stake is the $100 baseline. Or if the odds are +300 then if you place $100 dollars, you receive $300 in winnings. This is in contrast to the odds of favourites so the odds displayed are to show how much much you must place to win the $100 baseline.

Whilst they may not be easy to understand when you’re not used to them, they are a pretty simple way to interpret probability once you gain more experience in working with them and comparing them to the odds preference that you understand. Below is a table of US odds and their decimal odds equivalent to help you on your way.

American odds Decimal odds American odds Decimal odds

American oddsDecimal oddsAmerican oddsDecimal odds
-1011.990+1002.000
-1051.952+1052.050
-1101.909+1102.100
-1201.833+1202.200
-1301.769+1302.300
-1401.714+1402.400
-1501.667+1502.500

Value betting

odds-valueUnderstanding odds and probability is the key to finding value and winning in the long run. For instance, you may determine an event to have a 80% chance (1.2 or 1/5) of occurring after looking at previous match stats etc. However the bookmaker may determine this event as having a 50% (2.0 or 1/1) probability of happening. When there is a discrepancy like this you are able to find what you perceive to be value in the bet. And unless you find value, you won’t be won’t be a long term winner. That’s just simple mathematics at work!


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