When you check a bookmaker’s betting offer for the first time, you may notice that each bet-line is accompanied by a set of numbers presented as a decimal or as a fraction. Those are the odds also referred as prices or quota. Reading them can be quite confusing for somebody who is new to sports betting. However, understanding how odds work plays a crucial part in the betting process. You can use them to evaluate better your chances and manage your risks.
Odds represent the chances or probability for a certain outcome to occur. As a bettor, you will use them to evaluate better your likelihood of success and risks as well as calculate your potential profits. They also act as a financial agreement between you as the bettor and the bookie.
The majority of bookmakers choose to display the odds in decimal, fractional or American format according to the market they cater to.
The decimal odds or European format is mostly used by bookmakers catering to European countries as well as Canada, New Zeeland and Australia.
The fractional odds or UK format is favoured by bookmakers in Great Britain and Ireland while money line odds or American format is popular in the United States.
Here is an example of all three formats expressed in even money odds:
Fractional – 1/1;
Money line – +100;
A quotation of 2.0 in decimal format translates to a 50% probability of a certain outcome to occur. Further calculating the probabilities a quotation of 3.0 represents 33% probability and so on. The Same principle applies to all formats. As you notice, the higher the quotation, the lower the probability of occurrence. The reversed is also true: the higher the likelihood, the lower the odds. As a result, your return on investment or profit is also going to be lower.
The odds that bookmakers offer are calculated by professional odds compilers. Such companies employ teams of sports experts and profilers to analyze all available information regarding an individual team or player taking into account previous performance, injuries, weather and so on. Using this data, they can estimate a statistically accurate percentage for a particular result to occur. Those probabilities are then converted into odds that include a certain percentage charged by the bookmaker as well.
By applying the following formula, bettors can convert the odds into a probability expressed in percentage:
(1/betting odds) * 100 = Probability %
For example assuming a match between New York Rangers vs. Carolina Hurricanes the money line looks like this:
New York Rangers to win – 1.75
Draw – 3.94
Carolina Hurricanes to win – 3.87
Using our formula, we get 57,14% for New York Rangers to win, 25,38% for a draw result and 25,83% for Carolina Hurricanes to win. Notice that 57,14% + 25,38% + 25,83% = 108,25%. The 8.25% over 100% represents the taxes charged by the bookie. This is how a bookmaker makes the profit.
This information is relevant to bettors that wish to evaluate the risks and better predict the outcome of a certain event. Opposed to gambling, betting can be a pretty accurate science.