If you are going to be a gambler then it is vitally important that you fully understand the betting odds that are given for each event. The betting odds will indicate to the gambler the chances of their selection winning and the financial return that is available.
For each event, a book is created that gives the betting odds for each competitor taking part. These odds reflect the probability of that competitor winning the event. For example, the odds of Chelsea winning the Premier League will be much shorter than the betting odds given for Stoke City. This reflects the fact that the probability of Chelsea winning is a lot more than Stoke City doing so. The lower the odds offered by the bookmaker, the more they believe the probability is that the selection will win.
Understanding betting odds and their formats
Betting Odds are one of the ways of expressing the probability of something happening. If you have used a traditional bookmaker to place your bets, you will most likely be very familiar with fractional odds. These are the traditional odds such as 6.00 (5/1) or 2.50 (6/4) that most of us will have grown up with. Simply treat them like the fractions you might have learned at school. If you divide the first number by the second, you will get a multiplier. For example, 5/1 means that whatever you stake on this bet you will receive 5 times your stake back plus your original stake if you are lucky enough to win.
So, €1 on a 6.00 (5/1) bet will give you 5€ winnings and with your stake returned too you will be given a total of €6. If you place €1 on 2.50 (6/4) simply divide 6 by 4, giving you a multiple of 1.5. Therefore, if you stake €1 on a 2.50 (6/4) bet you will win €1.50 and also receive your stake back giving you a total of €2.50.
All prices quoted on Betfair are decimal odds. They differ from the odds traditionally quoted in UK, they include your stake as part of your total return.
Decimal odds are easier to use than traditional odds and are the most common form of odds quoted in countries outside the UK. In addition, for the mathematically minded, decimal odds relate more closely to probability.
Betting odds conversion tables
|Decimal||Fractional||Moneyline||Win % (To break even)||Return (Minus stake)|
|Formulas||X + 1||X||-100/X + 100X||100/X + 1 %||(100X) %|
But, you mostly will use decimal and fraction Odds so lets dig deep with the most common:
How do you make the conversion from fractional to decimal Odds?
Let´s say you want to know what is 8/15 fractional odds expressed as decimal odds:
Take x = 8/15. So your decimal odds will be x + 1. (8/15 + 1 = 0.53 +1 = 1.53)
Calculating betting odds from given probabilities (Bookmaking)
This next bit is very useful to know. Have you ever wondered how Odds were calculated or how bookmakers make guaranteed profits?
Let´s start with a very easy probability example from school.
Heads and tails
When you toss a coin there are only two possible outcomes namely y heads and tails (this can depend on the kind of coin being used). Nevertheless, there are two equally likely outcomes. So, the end result of the toss will be either heads or tails. The chance can be written as decimal, fraction or percentage.
Knowing probability, we can easily calculate decimal odds.
Decimal odds = 1 / Chance of an event happening
Using this formula, we can calculate decimal odds for any outcome, while given probabilities.
Decimal Odds for getting Heads or Tails
Decimal odds = 1 / 0.5 = 2
Therefore, the odds for getting a Heads is 2. It’s exactly the same odds for the coin toss ending in tails.
This is used by bookmakers when creating their books for each individual event. If a bookie offered you to bet on Heads/Tails, he wouldn´t normally give you decimal odds of 2 for each of the outcomes.
A sample book could look like this:
However, the odds of 1.90 would mean that the probability of getting either heads or tails would have to be about 0.526 (above 52%). But you know that the real probability is 50%.
Probability = (1/1.90) x 100 = 52.6% = 50%
Similarly, as you calculate Decimal Odds, you can do the opposite of this and calculate the chance of each outcome by dividing 1 by the Decimal Odds.
We also know that the sum of probabilities must add up to 1. However, if you add up probabilities from odds offered by a bookie you will end up with approximately 1.053.
Bookie profit margin
The formula = (1/1.90 + 1/1.90) x 100. So:
Step 1. 1/1.90 + 1/1.90 = 1.053
Step 2. 1.053 x 100 = 105.3 %
In other words, the book adds up to 105.3%. Why is it this figure? It’ simply to ensure that the bookmaker gets a profit which is the name of their game. This means there’s a 2.6% profit figure for the bookmaker on each bet.
Three equally possible outcomes
Let´s have a look at another example. This time we’ll cover a football match in which the odds of a home win, a draw or an away win are all the same.
Possible bookmaker´s books:
How did I get those books?
Bookie A = (1/2.90 + 1/2.90 + 1/2.90) x 100 = 103.4%
Anything that is over 100% will be the bookies’ profit margins. This is very important to understand, as probabilities calculated from bookmakers´ books will not give as accurate chances of each outcome.
1. Understanding Probability
If a selection has betting odds of 9-1 of winning then this means the bookmakers believe there is a 10% chance of that happening. This is calculated thus: If 9 is represented as A and 1 as B then probability (%) is B/ (A+B) therefore, 1/9+1 = 1/10 = 10%.
So using this calculation method, say you want to bet on Lewis Hamilton winning a Grand Prix. He’s always one of the favourites so would have betting odds of say 5/4. So the probability of him winning is calculated as 4/5+4 = 4/9 which is 44%.
That’s the mathematics of probability out of the way and the chances are you won’t really need to look at odds in that way again. The most important part of betting odds for gamblers is to see what your return on a stake will be.
There are three main ways of expressing odds, namely decimal odds, fractional odds and American odds. Again with the first two it’s a bit like being back at school when you were learning your decimals and fractions. Now that expertise can be used to help you win some money gambling.
2. Fractional Odds
These betting odds are what most gamblers; especially those in the UK are used to. If you watch horse-racing on a Saturday afternoon it’s the fractional odds that will be given preference over the decimal ones. It’s a question of tradition and when there was talk of on-course bookmakers showing just decimal odds there was total uproar among the traditionalists. As the years go by though, decimal odds are becoming more popular amongst gamblers.
So how do you understand fractional odds? Say for example, a competitor is priced up at 6-1 in fractional odds. The figure on the right indicates the stake you place on your selection, while the figure on the left shows how much you will win. So for a 1€ stake you would win 6€. This does not include the fact you will also receive your stake back. So in all you would bet 1€, win 6€ and get that 1€ stake back making a final return of 7€.
As well as the usual 2-1, 3-1, 4-1 betting odds there are other odds that represent slightly higher or lower prices. There are plenty of these odds and examples are 11-8, 9-4 and 100-30. For example, if you are betting on Ronnie O’Sullivan to win a snooker tournament he might start at 2-1. If the bookmakers believe his chances have improved (say a rival is knocked out or he’s simply playing better than anyone else), they will cut (reduce) his price. Remember they want to give away as little money as possible. So from 2-1 he may be cut to 6-4. That price represents 1 and a half to 1 but that price looks clumsy so they multiply it up to 6-4.
Learning the fractional odds is really important if you want to be able to successfully gauge how the market is moving. For example, which of these odds is the shortest? Is it 7-5 or 11-8? Simply divide the figure on the left by the figure on the right; doing so reveals that 7-5 is 1.4 while 13-8 is 1.61 so therefore 7-5 is the shorter odd.
You also need to learn the difference between ‘Odds Against’ and ‘Odds On.’ Anything above 1/1 better known as ‘evens’ is odds against – this means the figure on the left will be higher than that on the right. When the bookmakers really believe a selection has a high probability of winning the selection will become odds on. This means the number on the left is lower than that on the right. Examples include: 4-5, 10-11 and 8-15. 8-15 means you have to stake 15€ to win 8€ (plus your stake back).
3. Decimal Odds
With Decimal Odds, rather than there being fractions being used, decimals rule the roost. Again the smaller the figure, the more the bookmaker believes that competitor can win. Hence they are unwilling to offer large returns because if they did they would lose money and no bookmaker wants to do that. It is worth remembering that decimal odds include the return of the unit stake as well unlike fractional odds. So decimal odds of 3.00 for example, returns 3€ for a 1€ stake which is 2€ profit and the 1€ return stake.
With Decimal Odds an important figure is 2.00, this is the equivalent of even money (1/1) in fractional odds. If the odds go above 2.00 then they are odds against, if they fall below 2.00 (say 1.73) then the selection is said to be odds on. This method of representing the odds is a bit easier than understanding fractional odds.
For those gamblers used to fractional odds, converting from fractional to decimal might take a couple of goes to get used to but it’s pretty easy really. If a horse is 4-1 to win a race, the decimal equivalent is 5.0 this means a stake of 1€ would return a total of 5€ for a win bet if successful. Just remember that 5.0 is the same as 4-1 simply because decimal odds include the return of your stake while fractional odds don’t.
When you bet online you are given the choice of how you want the odds to be represented. It’s easy to change the way the odds are displayed so there’s no real need to get the calculator out and start working out tricky conversions such as what is 2-5 in decimal form. (it’s 1.40 by the way).
5. US Odds
Again the odds are different when using American odds and it is important that you fully understand them before placing a bet. American odds are also known as lines or money line odds. The odds shown when there is a + sign are how much you will win for a stake of 100 units. If however there is a – sign then the odds are showing you how much you will need to stake in order to win 100.
For example, say the fractional odds are 5-1; the decimal odds would be 6:00 while the US odds would be +500. This indicates that if you stake 100 you will win 500. If your selection is a hot favourite and 1-2 to win (fractional), 0.50 (decimal) then for US odds the price would be -200, indicating you need to stake 200 to win 100.
6. Betting Odds Glossary
These are the odds that you will definitely be paid out on once the event is over.
The amount that the gambler places on his selection. The return you receive will depend on the odds and your stake. For example if a selection is 5-1 to win and your stake is 2€ then if it wins you will win 10€ plus your 2€ stake back.
This is another way of saying ‘taking a bet’ When your selection is made the bookmaker is said to be risking their money to lay the bet.
This is the term used when the stake you put on will yield more than double your stake. In fractional odds the figure on the left will be higher than the right and in decimal odds the figure shown will be higher than 2.00. For US Odds a + sign is shown.
These are the odds when the stake you place will win you an equal amount. In decimal terms this is 2.00 and in US Odds +100 (100€ stake wins 100€)
This is the term used for when the amount you win is less than the amount you stake. For example with odds of 1-3, your 3€ stake will only win you 1€ plus your stake back. If the figure on the left is less than that on the right then the selection is odds on. In Decimal form this means the figure shown will fall below 2.00 and in US Odds a – figure is shown.
If the bookmaker believes your selection has an excellent chance of winning then they will offer much smaller odds.
If the bookmaker believes your selection has little chance of winning their event, they will offer larger odds. For example, the bookmakers will offer long odds on a team such as Burnley winning the Premier League.