Odds in sports betting: the Ultimate Guide to Calculate Odds

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Just as an investor carefully analyzes the market and weighs the risks against the rewards, a sports bettor must also develop a keen understanding of the key concepts in betting, one of them being odds.

Let’s dive in and understand sports betting and odds in sports betting, how they are calculated, and how as a beginner you can read them.

What are odds in sports betting?

Odds in sports betting determine the probability of an event to happen and the potential payout that you can fetch out of it if it does.

Just like evaluating stock prices or market trends, interpreting odds is crucial for making informed decisions about where to place your wagers in the global sports betting world.

Odds can be represented in three broad categories namely, decimal, fraction, or moneyline odds also known as American odds in sports betting. You will encounter the odds being depicted in any one of these formats, so you must understand how to read all of them. We will explain them in the upcoming section.

Different types of odds in Sports Betting

Different types of odds

Decimal odds

One of the most straightforward ways of representing odds is through decimals. As the name suggests these odds in sports betting are expressed in decimal numbers that indicate the potential payout for every $1 wagered, including your original stake.

For instance, let’s consider the decimal odds for the upcoming basketball game:

Team A: 2.75

Team B: 1.45

Now, if you decide to bet $1 on team A and they win, you get a total amount of $2.75 which will be inclusive of the initial stake i.e., $1 plus profit of $1.75.

Similarly, if you bet on team B, you get $0.45 as profit plus $1 that you had wagered initially.

To calculate your potential profit, you would multiply your stake by the decimal odds and then subtract your original stake amount. So, if you bet $100 on Team A at 2.75 odds, your potential profit would be:

Potential payout = $100 x 2.75 = $275

Potential profit = $275 – $100 (original stake) = $175

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In the above example, team A is considered the underdogs while team B is the favorite. Don’t worry these concepts might read confusing but we will clarify them in the upcoming sections of the article.

Fractional odds

This is another method of representing odds in sports betting. These odds are typically represented in fractions such as ¼, 3/1, etc.

In fractional odds, the numerator signifies the profit earned while the denominator represents the amount wagered.

For example, let’s look at the fractional odds for an upcoming soccer match:

Team X: 3/1

Team Y: 1/4

Now if you bet $1 on team X your payout if you win will be $3 plus your initial bet which is $1 making the total amount $4.

On the other hand, if you bet on Team Y with odds of 1/4, it means that for every $4 you wager, you’ll receive a profit of $1 if Team Y wins. The total payout would be your original $4 stake plus the $1 profit, which is $5.

So, to calculate the profits,

Stake * (numerator/denominator)

Now let’s take another scenario where you wager $20 on team X, so by the formula, your profit will be as follows:

20*3/1 = 60/1 = $60 (Also, don’t forget to add your initial $20 to the payout making it a total of $80)

Moneyline odds

Moneyline odds in sports betting are also known as American odds (don’t confuse them with moneyline bets!).

Money line odds can be a little tricky to understand as they are represented with either a (+) or a (-) sign before them. To understand why, we’ll have to decode the concept of favorites and underdogs.

Positive moneyline odds (Underdogs)

When a team or outcome has positive odds, like +150 or +275, it indicates an underdog. The number represents the potential profit you would make if you bet $100.

For example, if a team is listed at +200 money line odds in sports betting, it means they are the underdog. If you bet $100 on them and they win, you would receive a payout of $300 (your original $100 stake + $200 profit).

The higher the positive odds in sports betting, like +400 or +500, signify an even bigger underdog with higher potential payouts if they pull off the upset victory.

Negative moneyline odds (Favorites)

When a team or outcome has negative odds, like -120 or -250, it indicates a favorite. The number represents the amount you would need to risk to potentially win $100.

For instance, if a team is listed at -150 money line odds, they are the favorite. To win $100 on this bet, you would need to risk $150. If the favorite wins, you get your $150 stake back, plus the additional $100 profit, for a total payout of $250.

Lower negative odds, like -300 or -500, signify an even bigger favorite, meaning you’d need to risk more to win the same $100 potential profit.

The higher the positive odds, the bigger the underdog and potential payout. The lower the negative odds, the bigger the favorite, but the potential profit is smaller relative to the risk.

Understanding money line odds allows you to quickly identify underdogs and favorites, and evaluate the risk versus potential reward before placing your bets, similar to assessing high-risk, high-return versus lower-risk, lower-return investment opportunities.

How are odds in sports betting calculated?

Now you know how to read odds in sports betting no matter which format they are in. However, have you ever wondered who sets these odds or how are they calculated in the first place? Let’s help you understand it.

Sportsbooks and bookmakers expend significant resources to determine the correct odds that allow them to make profits in the long run. Several factors go into creating these odds, let’s look at them one by one.

1. Probability assessment

So the first step in the process is estimating the probability of the outcome happening. This is done after extensive research into team stats, injuries, home-ground advantage, and other such variables.

2. Market forces

The bookmakers also try to understand what is the initial response from the public. If the response is heavily lopsided, they try to adjust the odds to ensure a balance, which also means reduced risk.

3. Vig or Juice

The vig or juice can be simply understood as the commission of the bookmaker. This commission is earned by setting odds at slightly worse values than true probability would dictate. This overround provides them an edge to make a profit over the long run.

In simple words, the vig or juice is the commission that the bookmaker takes from bettors as the house.

For example, if a game has a true 50/50 probability, the sportsbook may set the odds at -110 on both sides instead of +100. This -110 pricing means you’d have to bet $110 to win $100, giving the bookie that extra $10 as their commission on whichever side wins.

By using these steps, bookmakers calculate the odds that maximize their profits while also keeping sufficient action on both sides to place a bet.

How to Convert Odds in Sports Betting

While odds in sports betting different formats convey the same probability, being able to convert them is a skill you need to master if you are planning to step into this field. Let’s help you understand the conversion process.

Converting decimal odds

To convert decimal odds to fractional:
Take the decimal odds and subtract 1 from it
That becomes the numerator of your fraction while the denominator is 1

For instance, decimal odds of 2.75 convert to fractional of 2.75 – 1 = 1.75

Fractional odds = 1.75/1 or 7/4

To convert to moneyline odds from decimal:
If decimal > 2.0, take (Odds x 100) – 100 to get positive moneyline
If decimal < 2.0, take -100/((1/Decimal) – 1) to get negative moneyline

For example, 3.5 decimal = (3.5 x 100) – 100 = +250 moneyline.

Similarly, 1.67 decimal = -100/((1/1.67) – 1) = -150 moneyline

Converting fractional odds

To convert fractional odds to decimal:
Divide the numerator by the denominator and add 1

Taking the previous example, 7/4 becomes 1.75 + 1 + 2.75

To convert to moneyline odds from fractional:
Multiply the fractional numerator by 100 to get positive moneyline odds
Use the negative fraction denominator x 100 for negative moneyline odds

For example, 5/1 fractional = 5 x 100 = +500 moneyline or 1/4 fractional = -(4 x 100) = -400 moneyline odds.

Converting moneyline odds

To convert moneyline to decimal:
If the moneyline is positive: Divide by 100 and add 1
If the moneyline is negative: Divide 100 by the moneyline amount, then add 1

For example:

+200 moneyline = 200/100 + 1 = 3.0 decimal odds

-150 moneyline = 100/150 + 1 = 1.667 decimal odds

To convert moneyline to fractional:
For positive moneyline, take the number as the numerator over 100 for the denominator

Example: +400 moneyline converts to 4/1 fractional odds

For negative moneyline, take 100 as the numerator over the moneyline number as the denominator

So, -200 moneyline converts to 100/200 or 1/2 fractional odds

Wrapping up

Odds in sports betting are important to understand if you want to excel in the field. Interpreting and reading the odds carefully will help you to assess risks versus rewards while placing bets. As the future of sports betting continues to look bright, with new markets and opportunities emerging, having a solid grasp of odds will be crucial for making informed decisions and maximizing your potential returns.

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A Beginner’s Guide to Understanding Odds in Sports Betting

Simranjeet Kaur

Simranjeet Kaur is a former PR professional turned content writer with a knack for creating compelling content that cuts through the noise. Now a writer at PieGaming, Simran brings fresh insights to the iGaming world. Join her as she explores the latest trends and innovations in this exciting domain.