Betting Explained: How to Read and Calculate Odds

Sports betting is a difficult hobby, both winning and understanding the broad market concepts. One of the most crucial concepts to understand when wagering on sports is the ability to read and calculate the betting odds. 

Betting odds are price tags, giving the bettor a clear understanding of what the bet will cost, how much you can win back, and the overall likelihood of winning. Let’s break down betting odds and how you can use them when wagering on sports!

What are Betting Odds, and How Do They Work?

As mentioned before, betting odds are price tags generated by the implied probability of an occurrence. These probabilities are measured based on ‘how much a bettor can win’ vs. ‘how much a bettor wages’ when compared to $100 per bet. 

In America, the plus/minus format of American Odds is the most popular style. It varies from country to country, with Britain using Fractional Odds and almost all of Europe using Decimal Odds.

Anything listed with a plus-value number, such as +120, are considered underdogs. Plus numbers cost less for bettors because it is less likely to win. However, bettors win more with underdogs if it hits.

Anything listed with a negative-value number, such as -150, are considered favorites. Negative numbers cost more for bettors with less of a payout, because they are more likely to win.

Types of Betting Odds

There are three types of betting odds used, mentioned briefly above. There are American odds, Fractional odds, and Decimal odds. Despite each visually appearing different, they hold no difference in terms of payouts or losses. 

American odds feature the plus and minus whole numbers. Fractional odds feature a fractional number which is very popular in Great Britain, while Decimal odds feature decimal numbers and are the most popular form of betting odds in Europe. 

• American Odds

American odds come in the form of a moneyline, which is a positive or negative whole number. When betting on a positive number, it will cost a bettor $100 to win back the asking price. When betting on a negative number, it will cost a bettor the asking price to win back $100.

• Fractional Odds 

Some odds come in the form of a fraction, where two numbers are separated by a “/”. 5/4 is an example of fractional odds. The bottom number, 4, is the amount a bettor will wager while the top number, 5, is the amount a bettor would win. 

• Decimal Odds

The most popular form of betting odds is Decimal odds, which are shown as one number. This number is the amount a bettor would collect compared to $1.00 per bet.

If the betting odds for a decimal style is 9, then a bettor would win $8 from winnings and $1 back from the wager. Despite this style of betting odds being the least popular in America, it’s the easiest style to quickly understand odds calculations. 

How to Read and Calculate Odds

Reading and calculating betting odds is the single most important aspect of sports wagering. Let’s use the example below to read and calculate betting odds and markets.  

Braves  +1.5 (-200) |  O 8 (-110)  |  +120

Astros -1.5 (+150)   |  U 8 (-110)  |  -115

The betting odds for the Braves to win straight up are +120, while the Astros betting odds are -115. That is because the Braves are underdogs and less likely to win the game. 

The Braves’ betting odds to cover the +1.5 run line are -200, while the Astros’ betting odds to cover -1.5 are +150. It is more difficult for the Astros to win the game by two or more runs than it is for the Braves to cover two runs or win outright. Therefore, the Astros to cover -1.5 runs is less expensive.

The games’ betting odds to go OVER or UNDER eight runs are -110 both ways. There is no favorite or underdog in this market because the moneyline is the same, regardless which bet you make (over or under). Whenever there is no favorite or underdog, it is known as ‘split’ odds. 

Use Odds to Calculate Implied Probability

The implied probability is the likelihood of a bet hitting compared to the odds, in percentage form. In other words, it’s the profit margin for a sportsbook within a bet and not the actual probability of a bet hitting. 

If the betting odds are +300, then the implied probability of that bet hitting is 25% – meaning it is successful once in every four attempts. Sportsbooks want to make profit off both sides of the bet, so the implied probability will always eclipse 100% when comparing the field. The extra percentage past 100% is the expected return for the sportsbook should the wager hit.

Actual probabilities will always equal 100%, but there is no way of knowing the actual probability of outcomes. One vs. one events have an actual probability of 50% each way, or a three-way line in soccer actually sees a 33.3% chance for either team to win or see a draw. Research and data helps sportsbooks determine an implied probability instead, which helps them set betting odds for a given event.

Use Odds to Calculate Winnings

Using the Braves-Astros example above, if a bettor wants to take the Braves’ betting odds to win straight up, it would cost $100 to win back $220 ($100 in wager + $120 in winnings = $220). 

If a bettor wants to take the Astros’ betting odds to win straight up, it would cost $115 to win back $215 ($115 in wager + $100 in winnings = $115). Many bettors elect to shop underdogs for this reason, you can win more or save money on missed bets. 

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