Betting Odds Explained: A Comprehensive Guide For Beginners

If you’re new to the sports betting scene, then understanding how betting odds work is a necessary skill to have. Whether you bet on soccer matches, in a casino, or any other type of sport, knowing how to read betting odds and interpret them is how you place smarter wagers. Read – betting odds explained: a comprehensive guide for beginners, to gain more clarity. 

What are betting odds and what do they do? Betting odds represent the probability of an event occuring and determine the payout amount for a winning bet. Understanding odds is the key to making insightful bets and minimizing risks when using online sports betting sites. 

Our article will explain the different types of betting odds and how to calculate each one. We’ll also show you how bookies come up with odds. 

Types of Betting Odds

There are three main types of betting odds you’ll always come across when wagering on a match. Each one is specific to a particular region and represented in a different format. But, keep in mind that they are all just different variations of calculating your payout. So, no need to panic. 

Let’s take each one bit by bit. 

1. Fractional Odds

Fractional odds are common in UK and Ireland betting websites. They are often represented with a  numerator and denominator. An example of a fractional odd would be – 5/1. 

Let’s interpret it below – 

The numerator (5) shows the potential profit you’d get from your bet, while the denominator (1) shows the stake. For example, a £1 bet at odds of 5/1 returns a £5 profit and £6 total (stake + profit). 

2. Decimal Odds

Decimal odds are quite popular in Canada, Europe, and Australia. A decimal odd is represented with a point between two numbers. An example is – 6.0. 

Interpretation

Decimal odds represent the total return per unit staked. For instance a £1 bet at 6.0 returns £6 including the stake, which is practically the £1 you bet plus a £5 win. 

3. Moneyline Odds

Moneyline odds are said to be more straightforward than the other types of bets. This is because when you see a team on the moneyline it simply means that they are the outright winners for that match. These types of odds are common in the US. 

A moneyline is represented with a + sign or a – sign: +500 or -200. It consists of a favourite (preferred winners) and an underdog (the team predicted to lose). 

Interpreting moneyline odds:

Positive (+) shows the profit you would make from a $100 stake. A +500 bet returns $600 (which is the $500 profit + $100 stake). 

Negative (-): Indicates how much you need to stake to win $100. A -200 bet requires a $200 stake for a $300 total return. 

Another thing to note about Moneyline odds is that odds for the favourites are often represented with a negative sign, while for the underdogs it is a positive sign. Bookies do this to even the playing field.

How Betting Odds Reflect Probability

There are different formulas for calculating the probability of the betting odds. We displayed each one in this section.

Formula:

Formula for calculating fractional, decimal, and moneyline odds.

Fractional Odds Probability: 

How To Convert Between Betting Odds Formats

If you wish to change the odd format that is displayed on a bookmaker’s website to one you’ll understand or simply prefer, there are several ways that you can do that. You can find each way below:

Fractional to Decimal

How to convert fractional odds to decimal odds. 

Formula: Decimal Odds = (Numerator+Denominator) /Denominator

• Example –  5/1 =  (5+1) / 1 = 6.0. 

Decimal to Fractional

How to convert decimal odds to fractional odds. 

Formula: Fractional Odds = (Decimal Odds−1)

• Example: 6.0 −1 = 5/1

Moneyline to Decimal

Converting moneyline odds to decimal odds.

Positive Moneyline Odds:
Decimal Odds =  (Moneyline Odds/100) +1

• Example: +200: (200/100 )+1 =2.0 +1 =3.0

Negative Moneyline Odds:
Decimal Odds  = (100/∣Moneyline Odds∣) +1

• Example: −150: (100/150) +1 = 0.67 + 1 = 1.67

Why Do Betting Odds Vary

The betting odds you come across on a betting platform can fluctuate due to a variety of reasons. These fluctuations can happen as a result of market dynamics, external influences, and the way bookmakers manage their risks. Here’s a deeper look into why odds can change:

1. Bookmaker Margins

Bookmakers want to make money, so they’ll always set their odds with a built-in margin to ensure profits, even if the wagers are balanced. This margin is often not obvious to the bettor, but it means the odds are not a direct reflection of the true probabilities.

For instance, if  two clubs are playing a match. The true odds might suggest a 50-50 chance for either side to win. However, a bookie might adjust these odds to 1.90 (instead of 2.00), which means they expect a margin for themselves, ensuring they have a long-term profit no matter the outcome.

2. Market Demand

The more money that’s wagered on one side of a sports event, the more likely the bookmaker is to change the odds to encourage betting on the other side. This helps to even the bookmaker’s risk, ensuring that they aren’t exposed to too much loss from one outcome.

• For example: If many people are betting on a favorite team to win, the odds on that team might shorten (get lower) to make betting on that team less appealing, and they may offer higher odds for the underdog to encourage bets on that side.

This is known as market movement and is driven by the actions of other bettors, media coverage, and public sentiment.

3. External Influences and Information

Bookies adjust their betting odds based on the latest news or changes related to an event. External factors such as:

• Injuries to key players
• Team lineup changes
• Weather conditions (important in outdoor sports)
• Changes in the venue or scheduling

These factors can significantly affect the outcome of a match event, and bookmakers adjust the odds to reflect these updates.

For example, if a key player is injured before a match, the betting odds for that team might increase,  as the likelihood of them winning decreases without their star player.

4. Betting Patterns and Public Perception

If there’s heavy public interest in a specific team or player, the odds may shift due to public perception and betting volume, rather than a true reflection of the likelihood of the outcome.

• Public favorites often receive a lot of attention, even if their actual chances of winning are lower, and this can lead to skewed odds.
• Smaller bets by informed bettors, known as sharp bettors, can also influence odds, especially when they place large bets on one side, forcing bookmakers to adjust to protect themselves from the risk.

5. Competition Between Bookmakers

Betting odds can also change because of competition among bookmakers. Different bookmakers might offer different odds on the same event in an attempt to attract customers. Some might even adjust odds during the event itself to reflect real-time developments, like injuries or changes in the game.

• For example: One bookmaker may offer 6.0 odds for a specific outcome, while another might offer 5.8, even if the event is the same. This competition can be beneficial to bettors who shop around for the best odds.

6. Bet Timing

The closer to the start of an event, the more likely the odds will have settled based on all available information. Early odds, set when the event is first announced, may not fully account for all factors. As the event approaches, odds become more accurate, and they will fluctuate as more information becomes available.

Conclusion:

Understanding betting odds is a crucial first step for any beginner looking to navigate the world of betting. By familiarizing yourself with the different formats, learning how odds are set, and avoiding common misconceptions, you can approach betting with greater confidence and strategy.