Betting Odds Explained
9 Mar 2022
Updated: 24 Feb 2023
One of the first things you should do if you're new to betting is discover how betting odds work. It's crucial since it enables you to determine how likely an event is to occur and what your potential rewards might be. It may appear perplexing at first. Check out Outplayed beginners guide to understanding betting odds below;
What Is Probability In Betting?
In simple terms, probability is a mathematical concept that describes how likely something is to happen. Probability is used in statistics to determine the likelihood of an event occurring. The probability of an event occurring can be described in percentages, fractions or decimals.
Mathematical probability concerns the many events that cannot be predicted with total certainty. We can predict only the chance of an event to occur i.e. how likely they are to happen, using it.
Using probability in sports betting allows you to predict on the outcomes of sports events (and a multitude of other things) and if your prediction is true, you win money based on the probability.
Betting is essentially online sportsbook vs bettor and the probability ratio determines the amount each party stakes based on the initial stake by the bettor. The probability figure (4/1, 2.1) between the sums staked by parties to a wager or bet is referred to as 'odds.' When the odds are 4 to 1, the bookmaker wagers four times as much as the bettor.
In horse racing, odds are occasionally replaced by the 'SP' or starting price, this is where the odds are replaced by a regulated price prior to the race. Most bookmakers ensure you receive the best odds with the SP.
Using Fractional Odds to Calculate Probability In Betting
On a bookmaking site such as Bet365, Betfair, William Hill, Ladbrokes et al, you may come across types of odds ratios in a fractional format such as 2/1, 4,1 etc. These are known as 'fractional odds' and using these you can establish how likely an event outcome is.
The equation is simple: Taking 4/1 as an example - Probability (%) = 1 / (4+1).
- 1/4 can be calculated as 4 / (4 + 1) = 0.80 – There is a 80% chance of the result.
- 1/1 can be calculated as 1 / (1 + 1) = 0.50 – There is a 50% chance of the result.
- 4/1 can be calculated as 1 / (4 + 1) = 0.20 – There is a 20% chance of the result.
Using Decimal Odds to Calculate Probability In Betting
Decimal format odds are popular in Europe, Australia and a few more countries around the globe. These are a bit easier to understand one the whole and favourites can be identified slightly easier by looking at pure number weights. The conversion of fractional to decimal is relatively simple;
- 1.2 converted to fractional odds would be 1/5
- 1.5 iconverted to fractional odds would be 1/2
- 2.0 converted to fractional odds would be 1/1
Where fractional odds show potential return (4/1 = for every £1 spent, you'll receive potential winnings £4), decimal betting odds represent return (4.1 = for every £1 spent, you'll receive £4.10 back), inc original stake. Lets take the exact same example as we did in the fractional, but convert the fractional odds over to decimal;
- 1/4 in decimal odds will be 1.25 = 80.00% chance of the result or 80.00
- 1/1 in decimal odds will be 2.0 = 50.00% chance of the result or 50.00
- 4/1 in decimal odds will be 5.0 = 20.00% chance of the result or 20.00
Fractional or Decimal Odds?
There's no specific benefit to using either. However, within newer betting sites and exchanges there is definitely a noticeable trend leaning towards decimal style odds. In general, decimal odds are simpler to comprehend. For example, at the horse racing, all the odds are likely to be in decimals these days. Contrarily, fractional odds do seem to be the default bet types for a football match.
Arguably, the most important difference between decimal and fractional odds is that the latter only indicate gains and do not account for the stake refunded, whereas decimals do. It's also far easier to display odds changes in decimals rather than illustrating with big fractional ratios.
Fans of fractional betting odds argue that their system is better as its the more common type of format over the year, which means punters are more at ease using it in the betting market.
Convert Fractional To Decimal
You may find that your favourite online betting site presents the odds in the format you prefer, but on occasion the site may just one or the other. For instances such as this, use our quick and simple betting odds calculator to convert fractional and decimal odds. Converts odds from fractional to decimal and also calculates your win/lose probability when entering back and lay odds. It can be used for betting exchanges that don't offer a change in odds preference.
That's about all the information you need to know to make an informed decision about fractional or decimal as well as convert them should you need to. Found this article useful? We have similar and expanded ones in our blog. Here are some popular ones;
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