If you’re reading this then there’s a good chance that you have laid a bet on a sporting event in the past. That means that you will be familiar with how to read betting odds, the odds layouts, and will have an understanding of the returns that you will be able to get back.
However, we like to offer a greater understanding of how to calculate odds for gamblers, which means delving deeper into how the odds are determined and what factors play a part when it comes to sports betting.
So, how do odds work?
Read on to find out how betting odds are determined by sportsbooks:
Converting Odds To Probability
Unlike other things that you can bet on, such as a coin toss, where there are only two possible definite outcomes, how betting odds work in sports betting is completely different. That means that most odds take into account the probability of something happening. For the argument of explaining how you work out the probability, we will use fractional odds.
For example, you could get a price of 8/13 for the Los Angeles Lakers to beat the Miami Heat with a -3 handicap. Converting that format to probability involves using math, as you will need to divide the number of the left by the number on the right, which in this example is 8 divided by 13. That equals a total of 61.5%, which is the probability of this being the outcome.
|8/1||1 / (8+1) = 0.11||11%|
|2/1||1 / (2 + 1) = 0.33||33%|
|1/1||1 / (1 +1) = 0.50||50%|
|1/8||8 / (8 +1) = 0.88||88%|
How To Use Odds To Work Out Returns
Those that are experienced bettors will understand how to work out the returns that you will get from winning wagers. However, it is always important to understand, which means beginners best serve themselves by learning to understand how to read odds in various display types. Below, you will see some of the most common odds in the different formats and how much you will get in returns from a $10 bet.
Does The House Always Win?
The short answer to this question is yes. The main reason for that is down to the fact that the odds never truly show the true probability of an outcome happening. The sportsbook that you are betting with will always take into account the profit that they need to get from the wager. Sportsbooks will first find the real probability of an outcome, before setting the odds that they will offer to customers online. This can easily be found by studying the outcome of a market with only two possible outcomes. For example:
- Novak Djokovic: -250 (Probability = 71.43 %)
- Rafael Nadal: +200 (Probability = 33.33%)
As you can see from the example above, the total of the possibilities added together exceeds 100%, which means that there is an area of profit for the sportsbook.
Why Is It Important To Study Probability?
Understanding the importance of probability and looking at this before making a bet could be a massive help to sports bettors going forward. Learning how odds work will certainly give a better understanding of how likely a bet is to be a winner. Of course, sometimes results in sport don’t play by the probability rule, but it is an extra piece of information that all sports bettors should be aware of.