When we talk about “odds” in gambling, then we are referring to the numbers which show the “probability” of an event occurring. These odds help bettors to determine the possible amount of money that they could win in accordance with the odds they have accepted.
Essentially, there are three primary ways of expressing odds, namely
- Fractional, and;
- Moneyline (also referred to as “American”).
All three of these odds represent the same thing, the numbers are just displayed in different formats.
Calculating Odds and Pay-outs
Before we proceed, it’s important to note that while “odds” and “probability” might seem like the same thing – they are, in fact, two separate entities.
Traditionally, gambling odds are expressed by using two numbers to show the relationship between the stake and the possible pay-out.
For example, they can be displayed as 4/1 or 4-1. Number 4 refers to the pay-out and the 1 to the stake.
Let’s draw a picture:
For every pound placed in a wager, a win pays out x4. So, for a £10 bet, a win would total £40 for the player, with the addition of the original stake.
The first step in determining an odd is to understand the numbers. In essence, if the first number is higher than the second, then the potential pay-out is more than the stake. This means that the odds and the pay-out will be higher.
If the first number is lower than the second, then the opposite applies.
So far it all sounds simple, but it does get a little more complicated. If you keep this easy formula in mind, however, then you should still come right each time:
- Divide the first number by the second
- Multiply this number by the stake
- Add the original stake
To be frank, it would be easier to use an online odds betting calculator to do the math for you, but it’s always good to have an idea of why you are giving certain totals.
As we mentioned, probability is different from odds and it comes with its own set of equations.
True probability is the mathematical likelihood of something happening or not happening. For instance, every time you toss a coin, the probability of it landing on heads or tails is exactly 50/50 or 1/2.
Not every scenario is basic as a coin toss and calculating probability when it comes to gambling is just a tad more complex.
The probabilities of most casino game and horse racing outcomes are calculated from the onset and are available for your viewing. And as we have discussed, lower-odds are assigned to a more probable outcome while higher-odds to an outcome that is less probable. Knowing your odds and the probability of these odds occurring will help you to determine the pay-out you will get in accordance with the type of bet you are placing. It will also give you a good idea of how much to wager if you have a certain potential earning in mind.