Home > Betting Odds Explained – How to Understand Odds in Betting

Betting Odds Explained – How to Understand Odds in Betting

Betting Odds Explained
For anyone new to betting, terms like “odds,” “probability,” and “payouts” may seem a little strange. Much like anything we come across for the first time, it will take our wonderful brains a little bit of time to process it all. While mathematicians and statisticians may hold the upper hand when it comes to translating these numbers a little faster, there is nothing to say they will have an advantage when it comes to winning.

This is the beauty of betting. Sometimes the favorite horse in a race or team in a game doesn’t win. The underdog can appear out of nowhere to snatch victory from the jaws of defeat, turning everything gambling experts know on its head. For many of us gambling enthusiasts, watching the underdog win is not exactly what we want. If there is a large amount of our money riding on that horse or team to win, it can be a little painful.

How can a gambler tell who the underdog and favorites are? Is there a requirement to obsessively follow a sport or know every single detail of a horse’s history and form in order to make that judgment? While there are many gamblers who will pay attention to the finer details, the average guy or girl can simply look towards the odds to figure it out.

But where do those odds come from? Does “Paul the Octopus” – the mollusk with over an 85% success rate in FIFA World Cup games in 2010 – set these odds? Do they just appear out of nowhere? Of course not. There is science behind how odds are created. We will explain this in further detail. However, in order to understand why odds are required, it’s only fair to take a little look at the history of how they came to be.

On This Page You Will Find:

A Brief History of Sports Betting

As gambling historians will likely be happy to inform you, games of chance have been around for a long, long time. Much like you probably enjoy the occasional bet or spin on the roulette wheel, our descendants just couldn’t get enough of gambling. However, if the mental image of hairy cavemen playing some primitive form of craps is a little hard to envisage, we can skip forward in time to 16th-century England.

The Brits have always loved their horses, and there is a plethora of documented history dating back to racing their favorite “nags.” In fact, it goes all the way back to the presence of the Romans. It was only around the 1500s when gambling on horses became a big deal. In fact, it was so much of a big deal that the British Royal Family got involved. Horseracing would eventually come to be known as the “Sport of Kings” as a result of this interest.

In 1750, the Jockey Club was set up, which brought with it a new code of ethics and the first codified rules of racing. Before the inception of the Jockey Club, betting on horses was very popular. Horse breeders and spectators would agree to wagers with one another, with no real science behind their bets. Once the rules and regulations had been established, however, betting became a lot more refined.

With the introduction of more races, cups, and tracks came a spike in betting interest. Whereas a wager could be placed between two gentlemen – with the chance of one simply refusing to pay – smart businessmen witnessed an opportunity. One of those men, Harry Ogden, opened the first betting shop from Newmarket Heath in 1790. Since then, it is safe to say that this practice has thrived.

Modern Betting

Of course, Mr. Ogden – known as the “Godfather of gambling” – sparked a surge in the popularity of betting on horses. Over the next couple hundred years, more and more sports would begin to be invented and/or regulated, making the opportunity to bet on these a possibility, too.

In the modern age, gambling enthusiasts have a wide range of options when it comes to placing bets. Most sportsbooks around the world – especially those you can find online – make it possible to bet on everything from horseracing, NFL, NBA, soccer, boxing, Aussie Rules, Gaelic Games, you name it. When placing a wager, you can choose the team or participant you believe will win and get paid if your prediction comes through.

The widespread introduction of the internet has seen interest in gambling skyrocket as a result. More and more eager eyes are drawn to sportsbooks as enthusiastic novices try to figure out if they have a talent for sports betting. Providing they can understand what the hell those numbers next to their selections mean, most of them are likely to come back for more.

Explaining what we’ve referred to as “those numbers” is not difficult by any means, but it pays to completely understand how they are worked out. Let’s take a look at what betting odds are and what they mean.

Betting Odds Explained

If you approach any bookmakers in order to make a bet, you are essentially making a prediction on an event. The bookmakers will display the odds that they are willing to offer you in order for you to make that bet. In other words, they will pay out a certain amount of money – based on your stake – if your prediction comes through. The odds they offer are created by statisticians and mathematicians, based on probability.

Let’s say you have $100 and believe the Boston Celtics will beat the Chicago Bulls. If the Celtics are favorites, the odds you are offered reflect that they are the stronger team at this point in time. Therefore, if you win, the odds will not be as strong as the Bulls’, as there is less of a chance of Chicago winning. Odds exist for bookmakers to protect their business and ensure that they are not in danger of being exposed to major losses.

Quite often, you will see odds on an event change to reflect the betting patterns of gamblers. In cases where there is not a great deal of difference between the Boston Celtics and Chicago Bulls, either of these teams could end up being the favorite by the time game day arrives. There are factors such as injuries, squad disharmony, or irregular betting patterns that can influence a bookmaker’s odds.

The Terminology

For those not quite familiar with how betting odds work, there will be particular phrases and terminology you might not yet understand. When discussing odds, many bookmakers, betting experts, or seasoned betting enthusiasts can differentiate between a favorite to win a game or match in three different ways.

These three descriptions are known as “odds on,” “odds against,” and “evens” (sometimes even odds). These three terms allow gamblers and bookmakers to easily determine if there is a favorite heading into an event or to confirm that there is no one team or participant with a great advantage.

We will break each one down for you below.

Odds On

If a team is odds on, then they are essentially more likely to win. The likelihood that they will win outweighs the likelihood that they will lose. Therefore, the expected payout will be less than that if you had chosen the opposing team. The reason for this is, quite simply, that they are expected to win. Your prediction is perceived as a safe one, so the odds payable will be shorter as a result.

You will generally see odds on bets represented in a number of ways, depending on the odds used. We will cover this in a later section with examples, so don’t worry if you do not yet grasp this concept.

Odds Against

Quite simply, this is the opposite of odds on. The odds are against an event happening, which means that there is a lower possibility of that player, team, horse, or boxer winning. The payout will be more than what you could expect to get for backing the other team in a game or boxer in a fight. With gambling, if there is less of a likelihood of an event happening, you will certainly win more money.

Even Odds

Even odds. This is such a cool little clash of words. It is almost, well, paradoxical.

With evens, the result could pretty much go either way. In other words, the chances of a team or athlete with even odds winning are the same as them losing. It is essentially a coin toss, or a 50/50 shot, so odds should be close enough to represent this when it comes to betting time.

As we mentioned above, there are different types of odds available when betting. The odds you are more likely to find depend on your location. Allow us to explain in further detail below.

Different Types of Betting Odds

If you are placing bets, you should want to understand your betting odds and payouts. Most of the time, this can really add a little flavor to your bets. Think about it: what would give a gambling enthusiast the best kick? Winning, of course, but winning the amount of cash they know they can win when placing the bet. Conversely, simply placing a bet of $100, winning, and collecting $110.90 is going to be a little disappointing.

If you have ever seen a casual gambler get excited about winning on a horse race – or unwittingly backing a boxer who simply can’t lose – only to see their modest winnings, it’s hard not to laugh. It’s not a cruel thing to admit. It’s just that it can remind us of a time when we were in the same position, right?

Now, having read this guide up to this point, you likely have a better grasp of odds and how they work. The next step is to take a look over the different types of betting odds out there. For the purpose of illustrating a point, we will start with the most traditional of odds types: fractional odds.

Fractional Odds

Commonly referred to as “UK odds,” fractional odds are the original way to represent gambling odds. There are not many areas around the world other than the UK and Ireland that commonly use fractional odds. This is likely due to the fact that they are pretty old-school and have been a staple of British and Irish betting for hundreds of years. Some might say that they are a little old-fashioned.

Then again, if you have grown up in Ireland or Britain, you will be used to these odds. Other types of odds may even look a little, well, odd. It truly depends on what you get used to when you start betting. With the boom in internet sports betting, some gamblers have been introduced to using these odds. Across the pond, there will be almost no one who will use anything other than fractional odds.

How Do Fractional Odds Work?

There is nothing difficult about using fractional odds. They are very easy to understand once you remember one simple point. The number to the right is the stake, and the number to the left is the winnings. The first number is known as the numerator, and the second number is the denominator, but you will probably never hear any average gambling enthusiast refer to these numbers by such titles.

When it comes to placing a bet with fractional odds, you can calculate your winnings in a straightforward manner by remembering that point above. Numbers are separated by an oblique (or slash) or a “to” in between the numbers. Fractional odds, for example, can appear as 4/1, 5/1, and 6/1, or 4 to 1, 5 to 1, 6 to 1, etc. Let’s look at a few examples to make sure you understand.

Example 1 

The Boston Celtics are playing the Houston Rockets in the NBA playoffs. In the first game, you want to place a wager of $100 on the Celtics to win. Boston is the favorite for the game, with Houston as the underdog. The Celtics are odds on. The odds might look something like this:
Boston Celtics (1/2) vs. Houston Rockets (3/1)
A successful $100 bet on the Celtics will return $150. The odds of winning are 1/2 – which means that you would need to put $2 to win $1 – making the amount won $50. The $100 stake is also returned to you.

$100 at 1/2 returns $150 ($100 stake and $50 win).

As you can see from this example above, breaking down your stake to a lower denomination makes it easier to work out. In other words, knowing that you need to place $2 to win $1 makes things clearer. Okay. Let’s look at another example, as we want you to be certain that you understand how this works.

Example 2 

Vasyl Lomachenko is fighting Mikey Garcia for a version of the lightweight title of the world. Both men are considered something of an even match, with Lomachenko coming in as a slight favorite. You have $100 to place on the fight, and you decide to choose Garcia for the win. Odds might look something like this:

Vasyl Lomachenko (10/11) vs. Mikey Garcia (2/1)

A successful $100 bet on Mikey Garcia will return $300. The odds are paid at 2/1, which means that you will need to put down $1 to win $2. Because you placed a bet of $100, you receive $200 in winnings. Your stake of $100 is also returned.

$100 at 2/1 returns $300 ($100 stake and $200 win).

The example above shows what can happen when you place a bet on a fighter considered as a slight outsider. Your $100 stake has earned you a pretty nice return, given that Garcia is not the betting favorite.

Example 3

For our final example on fractional odds, we will take a look at what happens when two teams are hard to separate. In other words, there is no favorite, so the odds are pretty much the same. Let’s say Brazil is playing Argentina in the FIFA World Cup. Both teams have been on fire, with star strikers from both teams performing excellently well. The odds might look something like this:

Brazil (10/11) vs. Argentina (10/11)

A successful $100 bet on Brazil will return $190.91. The odds are paid at 10/11, which means that you will need to put down $11 to win $10. Because you placed a bet of $100, you receive $90.91 in winnings. Your stake of $100 is also returned.

In scenarios where the odds are almost the same, you can figure that there is not much to separate both teams. As an unbiased gambler, you will effectively be flipping a coin.

Okay, now we will move on to decimal odds.

Decimal Odds

In an ideal world, everyone would be on the same page when it came to betting odds. Bookmakers across the world would all have the same way of representing probability and illustrating payouts. Given that some countries drive on the left side of the road, some have adopted the metric system, and many of us don’t like change, things are as they are. It’s not a big deal, really.

You see, decimal odds do work pretty well. They are easy to understand. They make odds appear very simple to get, which is music to the ears of those who struggle with numbers. Also known as European odds, decimal odds are popular in many countries such as Italy, Germany, and France, as well as Australia, New Zealand, and Canada. It is safe to say that decimal odds are the most popular method for displaying odds out there.

How Do Decimal Odds Work?

If you thought fractional odds were easy to understand, decimal odds are even more straightforward. You can simply multiply the odds by the amount of your stake to arrive at the returns. This is exceptionally easy for a beginner to understand, which is the main reason why many novice gamblers choose to bet with decimal odds.

If you are worried about understanding how odds work, this information will surely change your mind. There is simply nothing easier when it comes to working out odds than using the decimal odds format to do so. Remember that the breakeven odds are 2.00, which means anything under will return winnings which will be less than your stake.

As always, examples tend to help drum home the information. Let’s take a look at a few to make sure you get the picture.

Example 1 

Let’s use the same example of the Boston Celtics playing the Houston Rockets in the NBA playoffs. In the first game, you place a wager of $100 on the Celtics to win. Boston is the favorite for the game, with Houston as the underdog. The Celtics are odds on. The decimal odds might look something like this:

Boston Celtics (1.50) vs. Houston Rockets (4.00)

A successful $100 bet on the Celtics will return $150. The odds of winning are 1.50 – which means that you would need to put $2 to win $1 – making the amount won $50. The $100 stake is also returned to you.

$100 at 1.50 returns $150 ($100 stake and $50 win).

As we mentioned above, you can always figure out the amount you can expect to win by multiplying your stake by the odds. In the case of the scenario above, $100 x 1.50 = $150. It is so simple to work out that it should be a criminal offense.

Example 2 

Again, let’s stick with the examples we used above. Vasyl Lomachenko is (once again) fighting Mikey Garcia for a version of the lightweight title of the world. And as before, they are something of an even match, with Lomachenko coming in as a slight favorite. You have $100 to place on the fight and decide to choose Garcia for the win. The odds might look something like this:

Vasyl Lomachenko (1.91) vs. Mikey Garcia (3.00)

A successful $100 bet on Mikey Garcia will return $300. The odds are paid at 3.00 (which is 2/1 in fractional odds), which means that you will need to put down $1 to win $2. Because you placed a bet of $100, you receive $200 in winnings. Your stake of $100 is also returned.

$100 at 3.00 returns $300 ($100 stake and $200 win).

Always keep in mind how simple it can be to use decimal odds. By multiplying your $100 by the 3.00 odds, you will arrive at your potential winnings.

Example 3

Taking it back to the final example we had for fractional odds, Brazil is playing Argentina in the FIFA World Cup. In decimal odds, things might look this way:
Brazil (1.91) vs. Argentina (1.91)
A successful $100 bet on Brazil will return $190.91. The odds are paid at 1.91, which means that you will need to put down $11 to win $10. Since you placed a bet of $100, you receive $90.91 in winnings. Your stake of $100 is also returned.

Okay, so let’s move on to moneyline odds. For many readers, these will be the odds which probably need a little more explaining than the others.

Moneyline Odds

Moneyline odds are also known by the tags “US odds” or “Vegas odds.” It doesn’t take a rocket scientist to figure out the reason. Moneyline odds are almost exclusively used by US bookmakers for presenting odds to American bettors. While they appear to be quite difficult in comparison to decimal and fractional odds, there is no doubt that all will become pretty self-explanatory once you read the information below.

The most important thing to remember about moneyline odds is that they are worked out on the basis of placing a bet to the amount of $100. So, when you want to place a bet lower than (or greater than) $100, you need to work it out from there. Moneyline odds typically have favorites, who are identifiable by the minus symbol in front of the odds. The underdogs will have a plus sign in front of their odds.

How Do Moneyline Odds Work?

Moneyline odds, as we mentioned above, are not the easiest to understand from a novice’s perspective. As with most things in gambling, this will come naturally to you as you continue to study gambling or up the frequency of your bets. There is nothing quite like stepping into a casino in Vegas and seeing the odds for the first time. That blend of excitement and “what the hell does that mean?” is interesting, to say the least.

That being said, remember that the odds are displayed as though you are placing a $100 bet. We cannot emphasize this enough. As we have done for fractional and decimal odds above, we will use a few examples to illustrate how moneyline odds work. For the purpose of making sense – and to provide you with the means to compare – we will use the same teams and fighters.

Example 1 

The first example we used for fractional and decimal odds was a basketball game. The Boston Celtics are taking on the Houston Rockets in the NBA playoffs. You place a wager of $100 on the Celtics to win. Boston is the favorite to walk away with the “W,” and Houston is the underdog. The Celtics are also odds on. Moneyline odds might look something like this:

Boston Celtics (-200) vs. Houston Rockets (+300)

A successful $100 bet on the Celtics will return $150. The odds of winning are -200 (which means that you would need to place $200 down to win $100) making the amount won $50. The $100 stake is also returned to you.

$100 at -200 returns $150 ($100 stake and $50 win).

The example above shows that – despite the myth of moneyline odds being difficult to understand – they are anything but. Okay, decimal and fractional odds are easier to work out in your head, but moneyline odds are far from difficult.

Example 2 

To use the same example again, Vasyl Lomachenko is fighting Mikey Garcia. The Ukrainian is a slight favorite, although the two are pretty close. You opt for a $100 bet on the underdog, Garcia, for the win. Moneyline odds could look something like this:

Vasyl Lomachenko (-1.25) vs. Mikey Garcia (+200)

A successful $100 bet on Mikey Garcia will return $300. The odds are paid at +200, which means that you will need to put down $100 to win $200. Your bet of $100 yielded $200 in winnings. Your stake of $100 is also returned.

$100 at +200 returns $300 ($100 stake and $200 win).

As you will probably agree, there is really nothing difficult about using moneyline odds.

Example 3

The final example comes back to a fictional game between Brazil and Argentina in the FIFA World Cup. Oddsmakers cannot separate the teams, so odds might look like this:
Brazil (-110) vs. Argentina (-110)
A successful $100 bet on Brazil will return $190.91. Odds are paid at -110, which means you will need to place 110 dollars down to win $90.91 in winnings. Your stake of $100 is also returned.

It must be pretty pleasing to know that you had nothing to worry about, really. These odds are not very difficult to understand at all.

Converting Odds

The beauty of the modern age is just how much information we have at our fingertips. If you can imagine the way the world looked – even a few decades ago – gamblers were pretty much at the behest of bookmakers. Put another way, they did not have the wealth of information so readily available to them to influence their betting choices.

The internet provides us gamblers with that information. We can access history, form, up-to-date news on injuries, illnesses, and exterior factors which can affect athletes and performers when it comes to the big game. Why is this important? Think about having $10,000 riding on the New England Patriots to win the Super Bowl, only to find out that Tom Brady is injured. Chances are, you may be a little nervous.

These technological advancements have given us an open world of potential. As we are becoming more connected, we are exposed to different sportsbooks, different sports, alternative odds, you name it. As a global citizen, understanding how to use these things to your advantage may really pay off, especially as a gambler. So, if you do have designs on thinking outside of the box, learning how to convert odds should be important to you.

How to Convert Odds

If you truly want to know the science behind converting odds, we salute you. The chances are that you will want to convert moneyline odds to decimal odds, so we have provided some information to make this as easy as possible. Let’s break it down for you below.

With moneyline odds, there are positive odds and negative odds. For positive odds, the formula for converting moneyline to decimal is as simple as this:

Positive Odds: Examples

Negative Odds: Examples

Odds Conversion Chart

You can always refer to an odds conversion chart if you require assistance in converting one set of odds to another. This easy-to-read chart, located below, can help you to manually calculate the odds you require in the right format.

Fractional Odds Decimal Odds Moneyline Implied Probability
1/5 1.20 -500 83.3%
2/9 1.22 -450 81.8%
1/4 1.25 -400 80%
2/7 1.29 -350 77.8%
3/10 1.30 -333.3 76.9%
1/3 1.33 -300 75%
4/11 1.36 -275 73.3%
4/9 1.44 -225 69.2%
1/3 1.33 -300 75%
5/4 2.25 125 44.4%
11/8 2.38 137.5 42.1%
9/1 10.00 900 10%
10/1 11.00 1000 9.1%
20/1 21.00 2000 4.8%
50/1 51.00 5000 2%
100/1 101.00 10000 1%
1000/1 1001.00 100000 0.1%

There are also methods to work out fractional to decimal, decimal to fractional, and moneyline to fractional. We thought you would prefer a little bit of assistance, however, so this is probably the best time to introduce a really convenient tool to help you convert odds in a matter of seconds. Not only this, but the tool below will also work out how much you can expect to receive in payouts.

Betting Odds and Payout Calculator

Okay, so don’t hate us for not mentioning this earlier. We have a super-easy, lightning-fast betting odds and payout converter tool which can make the whole process as easy as a Sunday morning. Simply enter the information you require – such as fractional odds for moneyline odds – hit the convert odds button, and you will have all the info you need. If this sounds simple, it’s because it is.

Simplicity is what we want when it comes to betting, after all. Simple can be great; it can be convenient and fast, which means more time doing what we do best (that’s betting, in case you didn’t pick up on it). We would strongly advise playing around with the tool to practice getting to know how it works. When it comes to placing a bet, you can be certain that it will be extremely helpful to you.

You may be wondering why we spent so much time talking you through how to calculate odds and payouts, only to land this on you at the very end of it all. Well, given that you concentrated and paid attention throughout the process, we thought you deserved a reward. Besides, it is always best to truly understand how something works from the ground up, especially at times when you don’t have internet access.

Odds Converter and Payout Calculator

American Odds:
Decimal Odds:
Fractional Odds:
Implied Odds:
Bet Amount ($):
To Win ($):
Payout ($):

Final Thoughts

Although betting odds (and the various ways they can be presented) can look a little strange to begin with, they will be familiar to you in no time. It always pays to understand how important they are when it comes to making bets. These days, betting has been made even easier with the constant progression of internet gambling. As the world gets smaller, there is a lot to be learned from how other countries do things.

If you are a gambling enthusiast who enjoys betting while abroad – or even using foreign websites to conduct your business – there is a chance you may come across odds layouts that aren’t what you are used to. If this is the case, then it is always nice to understand the different ways odds are advertised. Whether it is moneyline, fractional, or decimal odds, there is a chance you might need to know how to work these out, on your terms.

While this knowledge can also be very impressive to flaunt, sometimes there is no substitute for simplicity. As technology continues to advance, we have new ways to bet and even new sports or activities to bet on. It only goes without saying that we should also have the tools necessary for the time at hand.

If there is one thing every betting enthusiast should have at their disposal these days, it is an odds and payouts calculator. We strongly advise you to use the one above.