Knowing how betting odds work helps sports bettors determine whether or not they should pursue a bet.
But that’s only half the battle.
It’s also important to know how to beat the odds.
Read on to learn how to do both.
Types Of Betting Odds
First things first:
Odds are a representation of the perceived probability of the event occuring.
There are three types of betting odds:
- American Odds
- Fractional Odds
- Decimal Odds
Each format represents the perceived probability differently.
They can also be converted into another format using our Odds Converter tool.
Once the the perceived probability of the outcome is known, bettors can then decide if they should make the bet.
How To Convert Odds To Probabilities
Betting odds may seem complicated at face value, but they are easy to understand once you understand how they work.
American Odds, aka moneyline odds, are written with a plus (+) or minus (-) symbol, eg -110, with the minus sign assigned to the event that is considered more likely to win.
Fractional Odds, aka British Odds, are written as a fraction, eg 5/1.
Decimal Odds show how much is won from a $1 bet; eg 2.000 odds pay out $200 for every $100 wagered.
As mentioned earlier, you can convert between each of these odds formats using our Odds Converter tool, but it can also be done manually.
This table shows how:
|American Odds||Fractional Odds||If American Odds > 0, then American Odds / 100|
|American Odds||Fractional Odds||If American Odds < 0, then -100 / American Odds|
|American Odds||Decimal Odds||If American Odds > 0, then (American Odds/100) + 1|
|American Odds||Decimal Odds||If American Odds < 0, then (-100 / American Odds) + 1|
|Fractional Odds||American Odds||Divide (solve) the fraction|
|Fractional Odds||American Odds||If solution >= 1, then 100 * solution. If solution < 1, then -100 / solution|
|Fractional Odds||Decimal Odds||Solve the fraction, then add 1|
|Decimal Odds||American Odds||If Decimal Odds > 2, then 100 * (Decimal Odds - 1)|
|Decimal Odds||American Odds||If Decimal Odds < 2, then -100 / (Decimal Odds - 1)|
|Decimal Odds||Fractional Odds||Subtract 1, then covert to a fraction|
The general rule for converting odds to the implied probability is as follows:
For example, let’s say that a sportsbook offers American Odds of the Houston Rockets defeating the San Antonio Spurs at -120.
Then the formula would be as follows:
IP = (120 / 220) * 100% = 54.55%
Now, these odds will change as more money is bet on the game.
As such, the implied probabilites on either side of the betting line will also change.
But here’s where it gets interesting…
Sometimes the betting odds offered by a sportsbook will not accurately reflect an event’s likelihood of winning.
This creates a value bet opportunity if the probability of the event occuring is higher than the odds’ implied probability.
Why The House Always Wins
Odds are never a true representation of an event’s implied probability.
As a result, the payout on winning bets is smaller than what would have been won if the betting odds were a true representation of implied probability.
Sportsbooks must estimate the true probability of an event occurring in such a way so that theirbetting odds will always make them a profit.
Let’s use these moneyline odds on an NFL game as an example.
Here are the implied probabilities using the previous formula.
For the Texans:
IP = (100 / 450) * 100% = 22.22%
For the Chiefs:
IP = (470 / 570) * 100% = 82.46%
Adding these two probabilities together gives a total of 104.68%.
Since the sum of all probabilities must equal 100%, these odds are not fair.
The extra percentage is the sportsbook’s margin, so 4.68% in above example.
If you bet on both the Texans and the Chiefs, you risk $104.68 to win $100.
From the sportsbook’s perspective, they receive $104.68 and expect to payout $100, leaving a 4.47% profit (4.68 / 104.68) for themselves, regardless of who actually wins the match.
The margin is the sportsbook’s edge.
So, how can you overcome this and beat the odds?
How To Beat The Odds In Sports Betting
Expected value (EV) is at the very core of successful sports betting.
Professional players use this term on a regular basis.
If you’re familiar with expected value, then you can skip a bit further down and see how to use it in your favor and beat the odds.
If this is your first time hearing about this concept, then pay close attention.
Here’s a basic example to illustrate.
Let’s say Mark and Eric enter a coin flipping contest.
Every time it lands on heads, Mark wins $1 from Eric.
Every time it lands on tails, Eric wins $1 from Mark.
Now, Mark and Eric could flip a coin forever but neither would have an advantage;
Mark wins half of the time and Eric wins half the time.
There may be some swings, but as long as the coin is tossed enough times, both Mark and Eric will break even eventually.
In other words, this means this bet has neutral expected value.
Now, let’s say Mark is bored of tossing the coin over and over again and decides to quit, but Eric encourages him to continue by offering a deal.
Instead of paying out $1 every time it lands on heads, Eric would pay out $1.10, and still receive $1 when it lands on tails.
In this scenario, Mark wins $1.10 half the time and Eric wins $1 half the time.
Over 100 flips, should the coin flips average 50/50, Mark wins 50 wins of $1.10, totalling $55, and loses $1 50 times, totalling $50.
This means that Mark has a positive expectation ie +EV of 5 cents on every coin flip.
On the other hand, Eric has a negative expectation ie -EV of 5 cents on every coin flip.
Every sports bet is either +EV, -EV, or neutral EV in rare cases.
In order to beat the odds, sports bettors must avoid the -EV plays and find the +EV plays.
Finding Positive EV Bets
Most sports bettors don’t put a lot of time into learning how to find +EV bets.
Common excuses reasons include:
- It takes too much time and effort
- No leads
- Too overwhelming
- It’s not fun
Here’s the deal:
If you’re looking for some fun, then find another hobby.
If you want to make some money, then you must learn how to make +EV bets.