Sports betting can be an exciting and profitable activity, but before placing any wagers, it’s essential to understand how odds work. Odds are the foundation of sports betting, determining how much you can win based on your bet. In this guide, we will explain the different types of betting odds—moneyline, decimal, and fractional—and break down how to read, calculate, and understand them. This knowledge will help you make more informed wagers and increase your chances of success.
Betting odds are numerical representations of the likelihood of a specific outcome occurring in a sporting event. They are used to determine how much money you can win from a bet. These odds also reflect the probability of an event happening, helping bettors assess the risk and reward of their wagers.
The odds you see at a sportsbook will either show potential winnings or represent how much you need to stake to win a certain amount. Understanding how to read these odds is essential for making well-informed bets.
There are three main types of betting odds used in sportsbooks around the world: moneyline, decimal, and fractional. Let’s take a closer look at each type.
Moneyline odds are most commonly used in the United States and represent the amount of money you can win on a bet based on a $100 wager. There are two types of moneyline odds: positive and negative.
Positive Moneyline Odds: These indicate the potential profit on a $100 bet. For example, if the odds are +150, a $100 bet would win $150 if successful, for a total return of $250 (your initial stake plus the winnings).
Example: +200 means a $100 bet would win $200 if successful.
Negative Moneyline Odds: These indicate how much you need to wager in order to win $100. For example, if the odds are -150, you need to stake $150 to win $100. If successful, your total return would be $250 (your initial stake plus the $100 profit).
Example: -250 means you would need to bet $250 to win $100.
Positive odds: (Bet amount x odds) / 100 = Payout
Negative odds: (Bet amount x 100) / odds = Payout
Decimal odds are commonly used in Europe, Canada, and Australia. These odds represent the total payout (including your stake) for each unit wagered. For example, if the decimal odds are 3.50, a $100 bet would return $350 (your $100 stake plus $250 in profit).
Decimal odds are easier to understand for many bettors because the potential payout is clear and simple to calculate.
A decimal odd of 2.00 means you will double your money if your bet is successful (i.e., a $100 wager results in $200 payout, including the stake).
Higher decimal odds mean greater potential payouts. For example, 4.00 would return $400 on a $100 bet.
Payout = Stake x Decimal Odds
For a $100 bet at 2.50 decimal odds:
Payout = $100 x 2.50 = $250 (total payout)
Fractional odds are most commonly used in the United Kingdom and are written as a fraction (e.g., 5/1, 10/3). The numerator represents the potential profit, while the denominator represents the stake required to win that profit.
5/1 Odds: For every $1 you wager, you will win $5 in profit. So, a $10 bet at 5/1 would win $50 (total payout would be $60, including the original $10 bet).
1/2 Odds: For every $2 you wager, you will win $1 in profit. A $10 bet at 1/2 would win $5 (total payout would be $15, including the initial $10).
Payout = (Stake x Numerator) / Denominator + Stake
For a $10 bet at 3/2 odds:
Payout = ($10 x 3) / 2 + $10 = $25 (total payout)
Betting odds are not just about payouts—they also reflect the implied probability of an event occurring. Understanding the relationship between odds and probability can help you assess whether a bet offers value.
To calculate the implied probability from odds, you can use the following formulas:
For Decimal Odds:
Implied Probability = 1 / Decimal Odds
For Fractional Odds:
Implied Probability = Denominator / (Numerator + Denominator)
For Moneyline Odds:
For positive odds: Implied Probability = 100 / (Odds + 100)
For negative odds: Implied Probability = -Odds / (-Odds + 100)
If the decimal odds are 2.00, the implied probability is: Implied Probability = 1 / 2.00 = 50%
If the fractional odds are 5/1, the implied probability is: Implied Probability = 1 / (5 + 1) = 16.67%
By understanding implied probability, you can identify bets where the odds may offer better value than the bookmaker's assessment of the outcome. For example, if you believe a team has a 60% chance of winning, but the odds reflect only a 50% chance, the bet may be worth considering.
