Betting odds explained – How betting odds work

Telegraph

13 hours ago

If you are looking to beat the bookies, one of the first steps is to understand how the prices at which you are backing selections work, so here is all you need to know about betting odds, explained in layman's terms.
Betting odds explained
When looking to place a bet with any bookmaker, you will be doing so using odds, which are a method of representing what that bookmaker thinks is the chance of that event occurring.
But these odds, also referred to as prices, can be presented in different ways.
Fractional odds are most common in the UK, but decimal odds are also a popular choice of punters, while it is useful to know how American odds work, so here is an article explaining the different odds formats and what they mean.
Fractional odds explained
Fractional odds are the most common format for bookmaker odds in the UK.
In this format, bookmakers give each betting selection a fraction to show its probability and, in essence, the number on the right of the fraction (the denominator) is the amount you would need to stake in order to win the number on the left (the numerator), if the bet is successful.
In the example below, the horse at the top of the racecard has odds of 2/1, meaning if you bet £1 on the horse to win at those odds, you will receive £2 back as winnings, along with your original stake of £1, so £3 in total.
You can look at some great odds with William Hill after claiming its attractive sign-up bonus
Fractional odds example
To emphasise how fractional betting odds work, here is an example of a bet that could be placed using them.
Say you are looking to bet £10 on a selection that has fractional odds of 5/1 with a bookmaker.
In the above odds, the potential winnings would be five times the amount staked, as shown by fraction 5/1, so if you bet £10 at this price and the bet wins, you would receive £50 in winnings plus your £10 stake back.
So the total return in this situation would be £60, meaning you have made £50 in profit. The key points from this example can be found below:
Stake: £10
Fractional odds: 5/1
Overall return: £60 (including original £10 stake)
Profit: £50
Of course, odds are not always written in X/1 format and the denominator (the second number) can vary, but it's still straightforward enough to calculate your potential winnings.
If a horse is priced at 12/5 to win a race, that means you would need to bet £5 to get £12, so to work out how much you would get from a £1 stake you just divide 12 by 5. This conversion changes it to 2.4/1, so we know a £10 bet would result in £24 profit, or £34 in total.
Decimal odds explained
Another way probability is expressed on bookmaker websites is via decimal odds, shown below by bet365. These are particularly popular across the continent.
Decimal odds are typically written out to one or two decimal places and working out potential winnings is straightforward – simply multiply your stake (for example £1) by the decimal number.
Decimal odds example
Using the image above, here is a look at an example of betting using decimal odds.
If, for example, you placed a £10 bet on PSG to win the Club World Cup at odds of 4.00 that would mean you are multiplying your stake by 4.00, so your winnings would be £40. This would mean £30 in profit. The key points from this example can be found below:
Stake: £10
Decimal odds: 4.00
Overall return: £40 (including original £10 stake)
Profit: £30
American odds explained
Those looking to bet on NFL, baseball or basketball will be more familiar than others with American odds, which unsurprisingly are used for events that take place in the United States, as well as at the country's own bookmakers and betting sites.
These are a little different to fractional and decimal odds, and are expressed as a number that can be preceded by either a plus sign or a minus sign (+ or –).
Those with a plus sign are odds-against selections (more on that shortly), meaning they are typically underdogs, while those with a minus sign are odds-on selections and are typically favourites.
With positive American odds the number resembles the amount of profit you would make if you bet £100, while with negative American odds, the number shown after the minus sign is how much you would need to bet to make £100 in profit.
American odds example
In the image above, Philadelphia Eagles are shown as being +650 to win the Super Bowl.
This means that if you bet £100 on this to happen, you would make £650 in profit if the bet comes in, as well as getting back your £100 stake, so your overall return would be £750.
Of course, £100 is a bigger stake than in the other examples, so to calculate what you would get from a £10 stake, you simply need to divide it by 10. That means a £10 bet on the Eagles to win the Super Bowl would return £75, meaning a profit of £65.
The key points from this example can be found below:
Common terms for betting odds explained
When reading through betting guides or tipping pieces, you are sure to come across a range of words and phrases you have never seen before. Here are some of the most commonly used betting terms and what they mean.
Fractional odds – The most popular odds format in the UK, showing odds as a fraction. The bottom number in the fraction is how much you need to bet to win the top number.
Decimal odds – Most popular odds format across the continent, showing odds as a decimal number. Potential winnings can be calculated by multiplying stake by the decimal number.
American odds – Most popular odds format in the USA, showing odds as either a positive or negative number. A positive number shows how much profit you get from a £100 stake, while a negative number shows how much you need to bet to make £100 in profit.
Moneyline – Used frequently in the USA, this simply refers to bets placed on a match outcome/result.
Odds-on – Odds that are rated more likely than 'evens' and whose associated outcomes are considered the more or most likely to happen.
Odds-against – Odds that are rated less likely than 'evens' and whose associated outcomes are considered less or the least likely to happen.
Outsider – A selection that typically has big odds and is not expected to win.
Favourite – A selection that typically has smaller odds and is expected to win.
Evens – Shown as either 1/1, 2.00 or +100 (in fractional, decimal and American odds respectively), evens is a price that suggests a selection has the same chance of happening as not happening. If you back something at evens, you will double your stake if it wins.
Implied probability – Odds shown in a percentage form to show likelihood of outcome.
Implied probability explained
Prospective bettors still getting to grips with the different odds formats can make use of implied probability to better understand how likely something is to happen according to prices.
Implied probability converts odds into a percentage figure to show the chance of something happening.
To calculate implied probability from fractional odds, the following calculation can be done:
Denominator/(denominator + numerator) x 100 = Implied probability
Using the equation above, this would mean that to calculate the implied probability for odds of 5/1, you would divide 1 by 6, which equals 0.167, then multiply 0.167 by 100, giving you 16.7. So 5/1 implies a 16.7 per cent chance of something happening.
Odds-on comparison table
When trying to compare bookmakers' odds, you may find you will need to make use of a betting calculator, but it is useful to know the conversions for some of the most common odds.
Here is a look at how different odds-on odds compare (i.e. those considered more likely than evens).
Odds-against comparison table
Here is a look at how different odds-against odds compare - i.e. those considered less likely than evens.
What is an odds calculator?
Odds calculators are online tools you can use to calculate wagers and potential wagers, while you can also use them to convert odds.
They can be especially useful when trying to calculate the return from a potential accumulator bet incorporating multiple selections or if you are betting each-way on an event such as a horse race (meaning you are betting on a horse to win and to place).
Many of these calculators also include odds-converter functions, which you could use to convert fractional odds to decimal or American odds.
How do in-play odds work?
Punters are not restricted to only betting on an event before it starts. Indeed, there is also the option to bet in play across a range of sports with most bookmakers – an attractive proposition for bettors.
When betting in play, you are placing a bet while the event, for example a football match or golf tournament, is happening.
In-play odds fluctuate quickly as bookmakers respond to what is happening live, as shown in the images above.
In a tennis match between Ugo Humbert and Jenson Brooksby, the first image shows Humbert is 1/1 or 'evens' to win the match.
But after Brooksby scores a point to move to 'advantage' in the individual game, Humbert's price to win the match drifts to a bigger price of 11/10, while Brooksby's odds to win the match have gone from 4/5 to a shorter price of 8/11.
This means that, as a result of something that has happened in the event (Brooksby scoring a point), the odds change in the moment to reflect the new probability of the outcome occurring.
In-play betting is most popular with sports such as golf or cricket that move at a slower pace, or football, which has natural breaks in the game. It is still offered for horse racing but the odds change at a rapid rate and it can be incredibly difficult to pick up on the value.
How does cash-out work with in-play odds?
The cash-out features offered by most bookmakers means punters are presented with the chance to settle a bet before the outcome is confirmed.
For example, if you back a team to win a football match and they take the lead, you could have a decent offer presented to you, albeit less than the value of what you would win if you were to stick with the wager.
The value of a cash-out offer can be determined by how odds are fluctuating in play.
Say, for example, you bet on a tennis player to win a match before it has started. If your player then wins the first set and looks in control, the odds for them to win will be shorter than they were before the event.
As a result of this, your cash-out offer will also be altered, and likely to offer you a profit on your original stake.
Remember, though, if you choose to cash out and the bet goes on to win, you will have missed out on more potential winnings.
Nearly every betting website offers cash-out on certain bets, but one of the best in terms of not suspending the markets and keeping cash-out offers live is bet365.
Acca odds explained
An accumulator, often abbreviated as an acca, is a way of combining multiple outcomes into a single bet, often with big odds on offer.
When betting safely and responsibly, they are a fun way for punters to place smaller-stake bets with potentially big returns. That said, accumulator bets naturally carry more risk as, for every leg (selection) added to the accumulator, the chance of the bet failing increases.
It is not always apparent how accumulator odds work, so below is an example of a potential accumulator with fractional odds, showing how you would calculate your potential return.
Four-fold accumulator:
Chelsea to beat Benfica (11/10)
PSG to beat Inter Miami (2/9)
Bayern Munich to beat Flamengo (4/6)
Inter Milan to beat Fluminense (8/11)
To work out the combined odds for this accumulator, you must simply convert the fractional odds of each selection to decimal odds.
11/10 = 2.1
2/9 = 1.22
4/6 = 1.67
8/11 =1.73
You then multiple these decimal odds by each other to get your total accumulator odds.
2.1 x 1.22 x 1.67 x 1.73 = 7.4
This means that the odds of this accumulator are 7.4 in decimals or 6.4/1 in a fractional format, meaning that a £10 bet on this accumulator would return a total of £74, of which £64 is profit.
If you sign-up to Sky Bet, you can make use of their Acca Freeze offer
What are value odds?
Understanding what is meant by value odds is perhaps the most important thing there is to know when it comes to betting.
Bookmakers set odds for events based on how likely they think something is to occur and, while they are generally experts at pricing up outcomes, there are occasions when they can overestimate or underestimate the chance of something happening.
Finding value in betting refers to coming across odds that are bigger than they should be based on the actual chance of it occurring.
As an example, you might be impressed by Liverpool in the Premier League and give them an 80 per cent chance of beating a Manchester United team who are not in good form.
When converting to fractional odds, 80 per cent equates to odds of 1/4 or 1.25.
However, you notice that a bookmaker, say for example BetMGM, have priced Liverpool at 4/6 to win the match, which equates to a 60 per cent chance of winning.
Given that the real odds are bigger than what you think they should be, this would be considered a value bet.
And while 4/6 are not big odds, the outcome is still worth betting on if you think it represents value.
Similarly, it might seem strange to say, but it is not only bets that win that should be considered good bets.
For example, you might fancy a tennis player to win a tournament and think they should be around 25/1 but they are being priced up by most betting sites at 50/1.
Even at 25/1, the chances of the player winning is only 3.8 per cent according to implied probability, but it could still be a good bet as the odds of 50/1 (2 per cent) are bigger than they should be.
Our verdict – Which bookie has the best betting odds?
'The best betting odds will of course vary from sport to sport, but generally speaking, bet365 is the standout bookie when it comes to the best betting odds.
'It is usually among the best when it comes to match result odds for football and other sports, while it allows punters to bet on unders rather than just overs on more obscure 'line' markets such as team shots or team corners, which is a rarity.
'For horse racing bettors, it also offers Best Odds Guaranteed, while its Super Boosts offer more value than most.'
Betting odds explained FAQs
How do fractional odds work?
Used by bookmakers in the UK, fractional odds involve representing probability using fractions, such as 3/1 or 9/2. The number on the right or bottom of the fraction (the denominator) is the amount you would need to bet to win the number on the left or top (the numerator) as profit.
What is an underdog?
An underdog is a team or player not expected to win an event or competition and will typically be priced at odds-against, meaning the odds are bigger than evens (2.0 or +100).
How do decimal odds work?
Decimal odds represent probability as decimal numbers and to calculate potential profit, you simply multiply your stake by the decimal number.
For example, if you place a £10 bet on an outcome with odds of 3.5, you would make £35 in profit if the bet wins, but get £45 back in total including your original £10 stake.
Why are decimal odds used more these days?
Decimal odds are the primary odds format across Europe and are becoming an increasingly popular choice for UK punters for their accuracy and the fact they are easier to interpret than fractional odds.
How do American odds work?
American odds are preceded by plus or minus signs to show whether selections are odds-against or odds-on. When the odds are positive (e.g. +250), the number resembles the amount of profit you would make if you bet £100. With negative odds (e.g. -250), however, the number is the amount you would need to bet to make £100 in profit.
What is the moneyline?
A moneyline bet is a wager placed on an event's outcome, for example which team will win an NFL match.
How do you calculate odds?
Regardless of their format, odds are used to reflect the chance of something happening.
If you want to calculate the percentage chance of something happening based on its allocated odds, you need to work out the implied probability using the following equation:
Denominator/(denominator + numerator) x 100 = Implied probability
For example, with odds of 4/1 would divide 1 by 5, giving you 0.2, then multiply 0.2 by 100, which equals 20. This means that odds of 4/1 imply a 20 per cent chance of something happening.