Odds are significant for punters and bookmakers, as they determine the payout rates of winning bets. The odds determine the chances of winning or losing a bet. In simpler words, the odds measure the probability of a certain event.
For example, if you roll a dice (that has six sides), the possibility of occurrence of a single digit is 16.66%. Likewise, when you toss a coin, the possibility of occurrence of ‘heads’ and ‘tails’ is 50%. All this seems difficult at first, but it’s not a complicated concept once you understand it.
How do Odds Work in Team Sports
- Moneyline wager: In this case, you simply pick the team that you think will win the match and place your bets on it, with no point spreads and variables. Payouts are different when you don’t use the odds. Your favourite team is represented by a ‘-‘and ‘+’ denotes the underdog (competitor). For example, if Team A has -100 against the Colts and you bet £150 to win £100, you will win the bet if your team wins.
- Point Spread: It’s a common bet where punters place bets on the difference in scores between the participating teams. For example, if the spread is seven, your favourite team will be marked as -7. In this case, the team needs 8 points to win the bet. If your team scores 8 points, you can win the bet.
- Over/Under Bets: In this type of bet you determine if the total score between all competitors will go below or above a preset amount. Accordingly you bet on over or under the predetermined score. For instance, in a football game if the mark is set on 40, both the teams need to be over or below 41 for punters to win the wager.
Fractional Odds Launched by the British Gambling Industry
The British have introduced fractional odds in bookmaking to determine the probability of winning or losing the game. They are represented as ‘A/B’, in which the number on the left denotes your winnings, whereas the number on the right denotes your stake.
In simple terms, if the odds are 4/1, it means you have wagered £1. If you happen to win the bet, you get £4, which makes it £5 in total. Accordingly, the punters calculate probability of winning to show your potential winnings. This system comes in handy when you have to place bets on an accumulator to carry your winnings forward.
Decimal Odds Used by the Europeans, Canadians & Australians
The decimal or European digital odds format helps punters calculate total profits on their returns. They are also used for trading in bet exchanges. The system uses a simple formula for calculation, which is (odds x stake) – stake = Profits.
For instance, if the decimal odds for your favourite team’s home win/ draw/ away win are—1.33, 5.25 and 8.5 respectively, you can calculate profits in each case separately.
If you bet £5 and the match is a draw, the profit can be calculated as: (5.25 x £5) – £5 = £21.25, which means your total earning is £21.25 + £5.
The American Odds System
The American odds are generally used across the Atlantic Ocean and they are denoted by a ‘+’ or ‘-‘sign. The plus sign denotes your total winnings (including the stakes) whereas the negative sign denotes how much you need to wager, should you win a standard bet amount.
For instance, if you bet £10 on a game and the odds are +200, the probability of you winning is 33.3% and your total winnings would be £30. The ‘+200’ in this case is determined if a team wins against another team. In American odd systems, the odds are determined using either of the two systems.
Now that you’re clear with the ‘odds’ system, let’s learn how to calculate probability.
Calculating the Probability of the Odds
Probability is defined as the chance of the happening of an event. It is calculated as ‘odds of a single event’ divided by the sum of total events multiplied by 100.
For example, if the odds are 4/1 and you wager £1, the probability would be: 1 divided by (4+1) x 100, which equals 25%.
In case of the decimal system, if the bookie offers you odds at 1.50 on an event, it means for every £1 that you stake, you get 50p return on it. Thus, you need to divide 1 by 1.50 and multiply the result by 100 to determine your probability of winning, which is 66.67% in this case.
So this is how you ‘define the odds’ and estimate your ‘chances of winning’ in various games.