Betting Odds 101: How Odds Work

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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 odds work?
• How Decimal odds work
• How Fractional 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.

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. 

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.

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. 

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. 

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. 

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. 

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

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. 

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.

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. 

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!