If you’re interested in betting on events and outcomes to win money, you have to understand how odds work. The odds are the likelihood of a specific result, and show how much you’ll get paid out if you win. There are 3 main types: decimal, fractional and American.
Decimal Odds
Decimal odds are the commonest, and simplest, type. They tell you how much you’ll win per unit of currency that you stake. For example, if you predict that Manchester United will win with decimal odds of 4.00, you’ll get 4 units back per single unit that you staked. The total of 4 includes your single unit bet, and a profit of 3 units. Usually, these odds extend to 2 decimal places to ensure that they are accurate.
American Odds
American odds are seen less often than the decimal or fractional formats. They’re also known as moneyline odds, and are based on a base stake of 100 units. You’ll see them expressed as a number with a positive or negative sign to them.
A little plus shows you how much you’d be paid if you bet 100 units, and a minus shows how much you need to put down in order to win 100 units. The above-mentioned decimal odds of 4.00, for instance, are written as +300 when converted to American; when you bet 100 units you get 300 back in winnings, as well as the original 100 that you bet.
Fractional Odds
Fractional odds fall between the decimal and American versions; they’re not as common as the former but are seem more frequently than the latter. They show the ratio of how much you will win, relative to the amount that you stake.
If we continue with the same prediction expressed in decimal and American odds above, the fractional odds would be expressed as 3/1, where for every single unit that you bet, you’ll get 4 units returned.
Calculating Probability
As mentioned earlier, odds don’t only tell you how much money you’ll get if you win; they also predict your chances of doing so. This is known as probability, and when you’re deciding if you should take the odds on a bet you need to decide if the potential payout matches the risk indicated by the probability.
How do you do this? By calculating an outcome’s probability using fractional odds. Let’s turn our attention to the same odds we’ve used throughout this article, written fractionally as 3/1. You need to apply the following formula:
P(%) = B/(A+B)
Where P, A and B refer to the probability, the first number in the fraction and the second number in the fraction respectively. In this case the probability would be 1/(3+1), which is ¼, and can be converted to a probability percentage of 25%.
Simple to Understand
When you’re first reading about odds they can feel a little academic and obscure, but once you’re applying them to real-life wagers you’ll see how easy and important they are. With this information, along with the research that you do into specific athletes and events, you’ll be able to make informed, legal sports betting choices.
