Betting Odds Explained
In recent times, we’ve looked around the internet at various betting guides and noticed that most websites assume a certain level of betting knowledge. But what if you have no experience in this industry at all? What if you’ve never placed a bet in your life? In this case, you need to know the basics, and we’re here to help today with some information about betting odds.
The Idea of Probability
First and foremost, the whole betting industry is underpinned by the idea of probability. When a sporting event takes place, a bookie will give odds depending on the likelihood of the different outcomes. If Arsenal are playing Chelsea, the most basic market will assess the likelihood of an Arsenal win, a Chelsea win, and a draw. If you put money on Arsenal to win at their chosen odds and they win 2-1, you get some money. If you put the same bet on and Chelsea win, you lose the money.
With betting odds then, the best way to look at them is to think about probability. Let’s not forget, betting odds are a universal system. How likely is an outcome in a particular event?
Introducing the Numbers
Most commonly, bookies will offer fractional odds when displaying the probability of different outcomes. For example, you might see 7/1, 5/2, or 10/3. Thankfully, there’s a formula that will tell us the chance of certain events happening.
If an outcome has been listed as 4/1, we need to plug these numbers into the following:
Probability = B / (A+B)
Probability = 1 / (4+1)
Probability = 1 / 5
Probability = 20%
When a betting website lists an event at 4/1, they are saying that there’s a 20% chance it will happen. By using the same formula, we can work out more probability percentages. This includes:
- 1/1 – 50%
- 1/4 – 80%
- 9/1 – 10%
Making Money and Winning Bets
This is great, but how do we calculate potential winnings. Well, if you’ve been putting this off for many years, we’ve got very good news; it’s simple. There are no formulas, no complex theories, A is your winnings for every B placed. If we go back to the 4/1 example, this means that you will win £4 for every £1 placed. Easy, right? Let’s go through the other examples so you can see it in action:
- 1/1 – You will earn £1 for every £1 placed
- 1/4 – You will win 25c for every £1 placed (or £1 for every £4 placed)
- 9/1 – You will win £9 for every £1 placed
Sometimes, people get confused by larger fractions or when the denominator isn’t one. Let’s say that an outcome has odds of 5/2; it works in exactly the same way. This time, you get £5 back for every £2 placed. If you want to compare with 9/1 and other odds with a denominator of one, you could translate it to 2.5/1, but bookies will never use decimal points in this way. Talking of decimal points, we’re going to take this one step further.
Using Decimal Points
With Betfair and other exchanges, decimal points are often used. If you actually prefer this method of displaying odds, most bookies allow their users to adjust between fractions and decimals in their account preferences. Decimals are slightly different, but there’s only one rule to remember; the number INCLUDES the stake.
Earlier, we saw that 9/1 brought in £9 in winnings for every £1 stake. In decimals, this would be presented as 10.0 because it includes both the winnings and the stake. Essentially, it says ‘this is the amount you will have in your account if you stake £1’. If you placed £10 on a 10.0 bet, you would end up with £100, but £10 of this amount would be your winnings.
In summary, fractional odds display your winnings next to your stake while decimal odds display the amount you will have if the bet were to win.
Which is Best? Decimal or Fractional?
Unfortunately, we couldn’t possibly give a definitive answer on this one because it all comes down to personal preference. This being said, we can tell you that more and more people are starting to choose decimal odds. For the longest time, fractional odds ruled the bookies and those who played. However, people have come to realise that decimal odds are much easier to calculate potential winnings. When comparing bets and deciding where to place money, it allows for much quicker calculations.
In recent years, bookmakers have actually used decimal odds in an attempt to get people interested in horse racing once again. If you visit Cheltenham, you would notice that most displays are written in decimal odds. Even just one decade ago, these same displays would have had fractional odds.
Additionally, there’s a second reason why people now prefer decimal odds; they like the fact that both winnings and stake are included. Rather than working out winnings and adding the initial stake, decimal odds do this work for us (no matter how simple).
Initially, it was the growth of Betfair and other betting exchanges that brought decimal odds into prominence. Soon enough, other bookmakers realised that making small adjustments to odds was much easier when in decimal format. Ultimately, they could alter the number rather than changing to a more complex fraction.
Taking Advantage of Conversion Tools
If you like a specific bookmaker and they don’t have the option to change how the odds are displayed, we recommend using our odds converter. It shows odds in different formats while also displaying the probability of a selection winning.
That’s it, we told you that it’s relatively simple. The odds show the probability of an outcome occurring, and this probability is normally shown as a decimal or fraction. As long as you choose the one that you prefer, we’re sure you will enjoy your betting experience that little bit more!
Carl Hughes - Editor
Carl Hughes is a leading expert on sports and casino betting. Carl began his career with a BSc in Sport, Exercise and Health Sciences from the University of Birmingham before working within the industry for some of the bigger names (GVC and Bet365) and has been praised as being "a leading sports betting commentator".