Betting Odds Explained & How to Calculate Payouts

Different countries use different formats for betting odds, so it’s useful to understand each type if you want to make smarter bets or explore international sportsbooks. But what do odds actually mean, how do they work, and how can you calculate your potential winnings?

Let’s break it down.

What Are Betting Odds and How Do They Work?

Betting odds are a numerical representation of how likely a particular outcome is to occur in a sporting event. They also reflect the bookmaker’s margin. Odds not only indicate the probability of an event but also determine the potential payout if your bet wins.

Generally speaking:

• Lower odds = higher probability (but smaller payout)
• Higher odds = lower probability (but bigger payout)

Bookmakers adjust odds based on two primary factors:

• Changes in probability — such as injury news or lineup changes
• Line movement — odds are adjusted to balance betting activity on both sides and manage the sportsbook’s risk

Understanding Betting Odds in Practice

Let’s say you’re looking at odds for a Real Madrid vs Chelsea match:

To calculate implied probability, use the formula:

100 / Decimal Odds = Implied Probability (%)

For example, in the betting line, we see the following odds: Real Madrid to win — 1.9, draw — 3.5, Chelsea to win — 4.33. To determine the probability that the bookie sees in a particular outcome, you need to divide 100% by the odds.

Keep in mind that bookies include a margin in their odds to minimize their risks and ensure they make a profit. That’s why the final odds for a match can often be different from the ones shown in advance.

Types of Betting Odds

There are three main formats:

1. Decimal odds (European):
2. Fractional odds (British);
3. Moneyline odds (American).

Note: “Moneyline odds” refer to the American format for displaying odds, while a “Moneyline bet” is a wager on which team or player will win the game (similar to the European 1X2 market’s “1” or “2” outcomes, but without the draw option).

Let’s look at each one type.

Calculating Betting Odds

1. European Odds (Decimal)

European odds, also known as decimal odds, are commonly used in Europe, Australia, and Canada. They show the total payout you’ll get for every dollar you wager, including your original stake and the profit.

For example, if you wager $100 on a 1.91 decimal odds, your potential payout would be $191 ($100 x 1.91), with $91 being the profit and $100 being the original stake.

2. British Odds (Fractional)

British odds, also known as fractional odds, are popular in the UK and Ireland. They show the likelihood of an outcome as a fraction, like 10/3 or 10/11. They help you figure out how much extra you could win by betting a certain amount. Check it out:

Let’s say you see an odd of 10/3. That means if you bet $3, you could potentially win an extra $10 in profit if your bet is successful.

If you were to make a $100 wager, you could potentially win: (10/11 + 1) x 100 – 100 (the wager) = $90.

To turn fractional odds into decimal odds, you have to divide the numerator by the denominator and add 1. Using our example, 10/11 + 1 = 1.9.

3. American Odds (Moneyline)

American odds are used mainly in the United States. Can be a bit tricky because they include both positive and negative values. Positive odds indicate the potential profit we can make if we bet a certain amount.

Let’s say you wager $100 on Real Madrid at -111 odds. This means you’d have to risk $111 to possibly make $100 in profit. Your total potential payout would be $211 ($111 wager + $100 profit).

To convert American odds to decimal odds, we can use the formulas:

• For positive odds: (odds / 100) + 1
• For negative odds: (-100 / odds) + 1

Key Takeaways on Betting Odds

Understanding odds is fundamental if you want to make informed betting decisions. Whether you’re using decimal, fractional, or American odds, knowing how to read and calculate them will help you manage your bets, measure value, and calculate potential returns.

Let the numbers guide you — not just the emotions.

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