Betting Odds 101: How Odds Work

Updated May 23, 2024By Chris Boline
Betting Odds 101: How Odds Work

Odds are the foundation of any betting. Understanding odds is absolutely essential to becoming an expert bettor. For newcomers, it’s important to get to grips with the basis before you begin placing wagers. Plus, getting a good handle on how odds work makes the whole thing that much more fun!

Betting Odds Explained

Having never been explained betting odds can be intimidating. They come in different formats, and sometimes seem to work counter-intuitively. 

You can trust our team of experts. We have put together all the key information about how odds work and how to read their different formats. 

We know that finding the best sports betting sites is not enough. Without proper guides explaining betting odds, many bettors may face frustration or confusion. We want you to have the best time and be the most strategic bettor possible. 

Below you will find the major ways of representing odds explained. They are:

  1. American
  2. Decimal
  3. Fractional 

We will also lay out some of the basics you should keep in mind when reading odds. Together, this is a complete guide to reading and understanding odds for sports betting. 

It’s the next step towards having the best time and most gains while betting on sports.

Odds Formats Explained

We all have had to have the odds formats explained to us at some point. They can be a bit confusing at first, but you will get the hang of it quickly.

There are three main ways of representing odds, and it is important to explain them well. They are equivalents, and can be directly translated. They are just different ways of representing the same value.

And they all represent the chance that something will happen. Or rather, the chance the betting market thinks something will happen. 

In direct relation to the probability that something will happen, odds also tell you how much money you stand to gain and how much you could lose (exposure).

This is why it is so important to have the odds formats explained. 

How American Betting Odds Work

The American odds format are most common, of course, in the United States. 

It may be counterintuitive at first, but it is important to know that favorites are marked with a negative sign (-). The value next to the negative sign is the amount you need to wager to win $100. That’s just how these odds work.

Betting Odds 101: How Odds Work
American Odds show how much you’ll win with a $100 bet (odds with +) or how much you need to bet to win $100 (odds with -)

In other words, the lower the number, the more likely they are to win, and the less money you win. WInning a bet marked at -220, means that you would win an extra $100 if you placed $220. These numbers will always be lower than -100. 

A similar logic works for the underdogs. Underdogs will be marked with a positive sign (+). The amount shown next to the positive sign represents how much you win by betting $100. 

So, if you bet $100 on a team with +220, you will win $220, in addition to your original wager being returned. 

How Decimal Betting Odds Work

Decimal odds are also known as continental, digital, or European odds. Decimal odds are very simple and are the easiest for calculating payout.

In decimal odds, your stake is already calculated in your total payout. No need to add it back in to calculate your total payout.

Betting Odds 101: How Odds Work
Decimal odds quote your potential return whereas fractional odds quote potential profits. In this case, the amount wagered gets multiplied by any of the figures above for your total returns. To count your profit, deduct your wager from the product.

You calculate the payout using the following simple formula: Stake x Decimal Odds = Total Payout.

Another way of thinking about these numbers is that they represent how much a winning ticket will be worth if you bet $1. 

In order to spot the underdog and favorite, just keep in mind that the lower the number, the more favored. 

Let’s look at an example

St. Louis Cardinals: 1.25


Chicago Cubs: 2.00 

In this case, the St. Louis Cardinals are the favorites. 

Here, betting $1 on the Cardinals will get you $1.25. Assuming they win. And if the Cubs win, all who bet $1 on them, will get $2.

This can be multiplied out, so the Cubs bettors would get $200 for betting $100. 

This means their profit would be $100. Because, remember, and decimal fractions, the stake is included in the payout. 

How Fractional Betting Odds Work?

Fractional odds are also known as British, Ratio, or Traditional odds.  You can spot them because they are represented with a hyphen (-) or a colon (:) between two numbers. 

The first part of the fraction, the denominator, represents how much profit you earn if you bet the the second part of the fraction, the nominator. 

Maybe an example will help you see how these odds work. If you bet on 4/1 (said “four-to-one”) odds, you will get $4 profit for every $1 you bet. You will also get your original stake back. 

Betting Odds 101: How Odds Work
Fractional odds refer only to the profit you’ll make on your bet. Multiply your wager by the figures above and add the product on top of your original wager to get the final returns.

Another way to calculate this is to multiply your stake by the first number, then divide it by the second number. This is more helpful for complicated numbers like 9/4. Always remember to add your stake back in. 

The lower the first number compared to the second number means they are more favored to win. 

Quick recap: three types of odds

You need to learn these by heart if you want to feel comfortable navigating the international sportsbook markets. Knowing these different formats could come in handy when you are researching or looking for value bets.

American to Decimal to Fractional:

  • -500 = 1.20 = 1/5
  • (+-)100 = 2 = 1/1
  • +900 = 10 = 9/1

Types of Bets

Understanding how odds work means that you can now apply them to the different types of bets. Let’s take a look at the main types of bets that you will see.

Point Spread: In point spreads, you are betting on the difference between the winning and losing scores. A bookmaker will post a number, and you decide if it will be more or less than that. 

BetDSI Point Spread odds
Spread betting odds at BetDSI

Moneyline: These are the simplest bets. You are simply choosing who you think will win the match.

Betting Odds 101: How Odds Work
Moneyline odds at BetDSI

Over/Under: In over/unders, you are betting on the total number of points scored by all teams. The bookmaker will post a number, and you bet on whether or not the actual total will be over or under that number. 

Betting Odds 101: How Odds Work
Decimal odds quote potential return where as fractional odds quote potential profits.

Prop bets: Propositions (props) are bets that focus on everything that happens before the end of the game. This is where you can find the most fun and creative bets.

Betting Odds 101: How Odds Work
Prop bets can deal with individual players or whole teams and they can span from one game to the whole season

Futures: Futures are also known as ante bets. They are on events well in advance. They have elevated risks and rewards, as there is more uncertainty. 

Betting odds example
If you see the word ‘outright’ close to a bet, you’re probably looking at a futures bet which deals with the winner of the match/competition.

How Do Odds Work

Now that you have the basics of how odds work covered, we wanted to give you a few last bits of advice to really enjoy your new betting odds knowledge. 

If you do live betting, don’t forget that you can enjoy over/unders, Moneyline, Point Spreads, and props even with in-game betting. Find a bookmaker that updates their odds frequently, and includes in-game stats. 

Understanding odds means that you can understand the relationship between stats and odds. 

You are now well on your way to enjoying live betting, the most exciting way to bet!

About the Author

Chris Boline
Chris Boline

As a devout aficionado of sports, Chris Boline has carved a career within the athletic realm. A skilled scribe, he boasts a decade-long portfolio that encompasses coverage of the NBA G League, the Los Angeles Chargers, football in the Mountain West Conference, and basketball. Beyond his professional pursuits, Chris is deeply invested in his community and dedicates his leisure hours to serving on boards, collaborating with community organizations, and cherishing the company of loved ones.

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