How Do Betting Odds Work?
December 2, 2020
Whether you’re betting on sports or playing in a casino, it’s useful to know how betting odds work so that you understand both the value in each bet that you place and how much you can expect to win or lose depending on whether or not your bet comes in.
In fixed odds sports betting, odds can be displayed in a number of ways. Online bookmaker websites usually give the customer the choice of what format they would like to view the odds in but as these settings aren’t always easy to find, it’s useful to understand how each format works should you come across them.
The main three types of odds formats are:
- American (moneyline)
If you are from the UK or Ireland, it’s likely that you’ll be most used to fractional odds as these are generally what are used by UK bookies in their advertising campaigns and are usually the default setting on UK bookmaker websites.
Below, we will take a look at the different online sports betting odds available and explain how they work.
How Do Fractional Odds Work?
Fractional odds contain two numbers which are separated by a slash or a hyphen. Examples of fractional odds are:
The number preceding the slash is the profit you will make when betting with a stake of the number after the slash.
For example, if the odds of a bet were 5/1. If you placed the bet with a £1 stake and it won, your profit would be £5. You would also receive your stake back and so your total returns would be £6.
Similarly, if the odds were 15/2, using a £2 stake, your total returns should your bet win would be £17 with a £15 profit.
Fractional odds are useful when your stake is the number (or a multiple of) after the slash but can be confusing when it is not.
For example, if the odds of your bet were 15/4 and you wished to place a £2.50 bet, it’s not initially obvious what your exact returns or profit would be. In this case, a little bit of math is involved.
Returns = ((fractional odds) x stake) + stake
Using the odds of 15/4 with a £2 stake, our returns would be:
Returns = ((15 / 2) x £2.50) + £2.50
Returns = (7.5 x 2.5) + 2.5 = £21.25
How Do Decimal Odds Work?
Decimal odds are perhaps a little easier to understand and are used commonly across Europe, Canada, Australia and New Zealand.
Some example of decimal odds are:
To calculate your total returns using decimal odds, you simply need to multiply your stake by the odds.
Returns = stake x decimal odds
For example, if the odds of your bet were 2.0 and your stake was £10, your total returns would be £20 (2 x £10).
Similarly, if the odds were 5.4 and your stake was £5, your total returns would be £27 (5.4 x £5).
In order to determine your profit from a bet when using decimal odds, you simply need to subtract your stake from your total returns calculation.
For example, with odds of 11.35 using a £10 stake, your total returns would be £113.50 with a total profit of £103.50 (£113.50 – £10 stake).
How Do American Odds Work?
If you are from the UK or Europe, American odds, or Moneyline odds as they’re also known, can seem rather confusing.
When there are two teams playing in each, in a basketball match for example, the favourite will have moneyline odds with a minus sign (-) alongside them and the underdog will have moneyline odds displayed with a positive (+) sign alongside them.
- LA Lakers -540
- Boston Celtics +722
For the odds with a minus (-) sign alongside them, this shows you the amount you will need to stake in order to win $100.
For the odds with a positive (+) sign alongside them, this shows you how much you will win for every $100 staked.
Using the example above, if you placed a $540 bet on the LA Lakers, your total returns would be $640 with a $100 profit.
If you placed a $100 bet on the Boston Celtics, your total returns would be $822 with a $722 profit.
Unless you are betting within the US, it’s unlikely that you will use American odds. Fractional and decimal odds are widely used in Europe and around the world for betting on most sports and are relatively easy to understand. It is your personal preference which odds you are most comfortable with and thankfully, bookmakers usually allow you to browse their websites and place bets using an odds format of your choice.