Betting odds are a foundational concept in gambling of any kind – be that sports betting or casino. Therefore, one can only hope to be a good punter if they take time to understand what betting odds (also called betting prices) are and how they work.
The most crucial purpose of odds is to inform the gambler how much they stand to be paid if their bet succeeds. Using a simple mathematical calculation that factors in the stake, the punter can quickly figure out their gross gain and the net profit (gross gain minus stake amount). However, that’s not all that betting odds provide. A glance at the betting odds posted by a bookmaker suggests the probability of that particular outcome occurring. High odds lead to more significant profits if the bet is booming, and lower odds lead to lower profits. However, effects or events that are priced high are generally also less likely to occur. This means that the likelihood of losing the bet is higher when dealing with high odds. Lowly priced outcomes or events are easier to predict and likely to result in successful bets, but the potential profit is commensurately low.
There’s a catch, nonetheless. Betting odds or betting prices do not necessarily spell the probability of an outcome. They are an implication of that probability. The actual probability of something happening is referred to as true probability. Betting prices show what the bookmaker expects to happen. Successful bettors beat their bookies by identifying situations where a bookmaker has underestimated or overestimated the probability of an outcome and playing the situation to their advantage. In gambling circles, this is called value betting.
Types Of Betting Odds
There are three main types of betting odds: fractional odds, decimal odds, and moneyline odds. In this post, we will look at each class, but the critical thing to note is that the betting odds used does not affect the payouts. Fractional, decimal, and money line odds are different formats of representing the same betting prices.
Decimal Odds
Decimal odds are also called European odds and are a popular betting format. Decimal odds are the simplest format among the three and quickly show who the underdog and favorite are when betting on outright winners. Put, decimal odds represent the amount to be won if the punter wagers $1 on that bet. For instance, odds of 3.45 would return $3.45 from a stake of $1. That would be the gross gain, with the net profit being $3.45 – $1 = $2.45.
Fractional Odds
Fractional odds are also called “traditional” odds, “British” odds, or “U.K.” odds. These odds are typically written using a slash (/1), hence the name, and are popular in England and Ireland. For example, a fractional odd of 4/1 is read “4 to 1, “meaning the punter wins $4 for every $1 wagered. The $4 is the net profit from the bet, with the punter $4 + $1 (stake) = $5 total gross gain.
Moneyline Odds
Moneyline odds are also called U.S. or American odds, which suggests they are the most popular format in the United States. The money line format uses +(plus) and -(minus) signs to indicate favorites and underdogs. A minus sign before a figure shows the favorite and informs the punter the amount they’d have to stake to win $100. Conversely, a plus sign is for the underdog and shows what the punter would win if they staked $100. Take an example of an NBA match between LA Lakers and Washington Wizards with the following odds:
- Wizards: +600
- Lakers: -700
One would need to understand from the above betting prices that Wizards are considered the underdogs, and the punter would get a profit of $600 from a $100 bet ($700 gross). The Lakers are the favorites, and one would need to stake $700 for a profit of $100, getting back $800 in total.
