Understanding the mechanics of betting odds is crucial for effective betting. It is highly recommended to invest time in familiarising yourself with the intricacies of betting odds.
Bookmakers, the authoritative figures in the betting world, define odds as a numerical representation of the likelihood of a specific event. These odds also serve as a guide to the potential winnings in case of a successful bet.
While it may seem daunting at first, understanding betting odds is within your reach. Our beginner’s guide is designed to demystify the process and help you become a betting odds expert.
Betting Odds Explained
Bookmakers use betting odds as a means to depict the probability of an event taking place. They also indicate the possible winnings for players who place bets on certain markets.
According to the bookmaker, low odds indicate a higher probability of an occurrence, while high odds suggest a lower likelihood of the result occurring.
UK bookmakers universally provide their odds in either fractional or decimal format, regardless of the sports they cover. Customers can also choose the American odds format, but we’ll discuss these variations later in the article.
Probability Explained
Probability refers to the measure of the likelihood or unlikelihood of an event or result. If an event has a low probability, it is less likely to happen, but if an event has a high probability, it is more likely to occur.
For instance, if someone were to choose a number between 1 and 10, and you were then assigned the duty of guessing the selected number, your probability of guessing correctly would be 10%, as there are 10 potential outcomes or numbers to pick from.
Nevertheless, if you were to speculate whether the individual has selected an even or odd number from the range of 1 to 10, your probability of guessing correctly would be 50%, as there are only two alternatives to consider.
Bookmakers use probability to manipulate their odds, which they then utilise to determine the price of each market.
Calculating Probability
Probability may be determined by assessing the likelihood of a certain occurrence, allowing you to gauge the chances of that outcome occurring.
Fractional odds are the predominant form of odds in the UK and are used by almost the best betting sites in the UK.
The probability calculation formula may be as follows: Probability (%) = B / (A+B). We will substitute both A and B with numerical values to enhance clarity in the examples provided.
Fractional Odds
- 4/1 fractional odds are simplified; they become 1 / (4+1), which is 0.20. Therefore, there is a 20% probability that this event will occur.
- 1/1 fractional odds may be simplified to 1 divided by the sum of 1 and 1, which is 0.50. Therefore, there is a 50% probability that this event will occur. This value is also referred to as ‘evens’ in the betting world.
- 1/4 fractional odds may be simplified to 3 / (1+3), which is 0.75. Therefore, this event is 75% likely to occur.
Decimal Odds
UK bookmakers also use decimal odds; however, they are not as widely favoured as fractional odds.
The calculation of probability involves substituting numbers with letters analogous to fractional odds. The formula for calculating probability is (10 / A) / 10 = Probability.
The following examples may be used to facilitate comprehension of how decimal odds can be employed to calculate the likelihood of a certain outcome:
- 00 decimal odds are calculated as (10 divided by 5) divided by 10, resulting in 0.2. This means that there is a 20% probability that this will occur.
- 00 decimal odds are calculated as (10 divided by 2) divided by 10, resulting in 0.5. Therefore, there is a 50% probability that this will occur. This value is also called ‘evens’ in the betting world.
- 25 decimal odds are calculated s (10 / 1.25) / 10, resulting in the value 0.8. This value corresponds to an 80% probability of occurrence.
Reading the Odds to Understand Profits
Players may use odds to calculate the potential winnings they would earn from a successful wager, regardless of whether the odds are expressed in fractional or decimal form.
When fractional odds are presented as a top-heavy fraction, such as 5/1, they indicate a ‘odds against’ bet with a low probability of happening.
Suppose the chances are represented as a fraction with a smaller numerator and a larger denominator, such as 1/2. In that case, this indicates an odds-on bet, with a high likelihood of this event happening.
When using fractional odds, one might calculate profits by just employing the numerical values in the fraction.
The fraction’s numerator represents the profit you would earn by wagering the fraction’s denominator.
- With odds of 10/1, if you place a £10 bet, you will make a profit of £100 and get a total of £110 back.
- With odds of 5/2, a £4 wager would result in a profit of £20.00 plus the original £4 deposit, resulting in a total return of £24.
- With odds of 1/2, if you place a £10 bet, you will make a £5.00 profit and get a total of £15.00 back as your initial deposit is returned.
Calculating decimal odds is also a straightforward process. Multiply the odds by your investment to get your potential profits:
- With odds of 11.00, if you place a £10 investment, you will get £110 in return (11 multiplied by 1).
- With odds of 2.50, if you place a £2 investment, you will get a return of £5.00 (calculated by multiplying 2.5 by 2).
- With odds of 1.50, if you bet £1, you will get a return of £1.50 (calculated by multiplying 1.5 by 1).
What About American Odds?
Most UK bookmakers provide American odds, although they are not often used.
American odds are denoted by a positive (+) or negative (-) symbol, indicating whether the wager is in favour of or against the odds.
To acquire a clear understanding, it is important to note that if the odds of a bet are denoted with a positive sign (+), it indicates that the bet is in favour of the opposing outcome.
Conversely, when the chances of a bet are indicated by a negative sign (-), the most favourable outcome is referred to as “odds on.” The greater the deviation of the number from 100, the more or less probable the event is to occur.
For instance, in a match between Liverpool and Arsenal, if Liverpool has odds of +250 to win, it indicates that they are considered the less likely team to win. On the other hand, Arsenal, with odds of -170 in this scenario, is considered the favoured team.
For example, +250 odds indicate that for every £100 wagered, you will earn a profit of £250, resulting in a total return of £350, which includes your initial £100 deposit.
The odds of -170 for Arsenal indicate the amount required to win in order to generate a £100 profit. In this case, a deposit of £170 is necessary to earn £100, resulting in total returns of £270 for this wager.
