Knowing how to understand and calculate odds is something that anyone who is placing
bets should take the time to 🔑 learn. The odds reflect your selection’s chance of winning
in the eyes of the bookmakers and how much money you 🔑 stand to win if your wager is
successful.
Although betting odds can look confusing at first, our complete guide will
make 🔑 sure you have the knowledge of how they work and can make more informed choices
when gambling online.
What are betting 🔑 odds?
Betting odds are compiled by bookmakers as
a way to represent what they believe is the likelihood is of an 🔑 event or events
happening.
These odds are usually represented as either a fraction (2/1) or a decimal
(3.0), which is used 🔑 in the UK and around Europe. There’s also the moneyline or
American way, which is where a number has a 🔑 plus or minus in front of it
(+200).
Betting odds are applied to any event that bookmakers are taking bets on, 🔑 from
horse racing and football to TV specials and politics.
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What is
probability?
Probability is simply how likely something is to happen. If the bookmaker
🔑 has an outcome to an event with a high probability, then it’s more likely to happen
than not. If the 🔑 event is deemed to have a low probability, then it’s less likely to
happen than not.
Probability is most commonly shown 🔑 as a fraction by UK bookmakers, and
would be two numbers separated by a forward slash (e.g. 1/2).
A very simple 🔑 explanation
of probability would be a coin toss, in which the two possible outcomes are heads or
tails. The probability 🔑 of getting heads is a one in two chance, which can be
represented as odds of 1/1, which would mean 🔑 the outcome has a 50% chance of winning.
This is how punters can use the betting odds to work out 🔑 how likely bookmakers believe
an outcome is to happen.
How to calculate probability from betting odds
Now you know
odds are set 🔑 out with two numbers separated by a forward slash, you can use them to
work out the probability of an 🔑 event happening.
The method for calculating probability
(in percentage terms) from odds is most easily explained by taking the two numbers 🔑 that
appear in the odds and replacing them with letters. So, for example 2/1 becomes A/B.
The calculation is: Probability 🔑 (%) = B/(A+B).
Here are some examples of betting odds
converted into percentages to find out the probability.
How to read betting 🔑 odds
Now
you know how to work out the probability of an event happening, you can use the betting
odds to 🔑 work out the potential returns if you were to bet on it.
Fractional odds tell
you the potential winnings in relation 🔑 to the stake you place on the bet. For example,
if you place a £1 bet on West Ham to 🔑 beat Tottenham at 4/1, it will pay out £5 if
successful (£4 profit plus your £1 stake). See below for 🔑 more examples of how to read
betting odds.
Any odds in which the first number is bigger than the second are 🔑 odds
against, while any odds in which the first number is smaller than the second are odds
on. Odds-on events 🔑 are considered more likely to happen than not by bookmakers, and
vice versa for events that odds against.
How decimal odds 🔑 work
When converted into
decimals, the potential winnings include the stake, so you just multiply the stake by
the odds. Decimal 🔑 odds are often used on betting exchanges, such as Betfair, as the
user is in control of the odds rather 🔑 than the bookmaker. Here are some examples of how
to read decimal betting odds.
11.00 odds = £1 bet would return 🔑 £11 including stake
4.5
odds = £1 bet would return £4.50 including stake
1.5 odds = £1 bet would return £1.50
including 🔑 stake
How American odds work
Although fractional and decimal betting odds are
the most common way a bookmaker showcases their prices on 🔑 an event, it’s still handy to
know how the moneyline or American version works.
Let’s return to the coin toss
example, 🔑 in which the odds for heads and tails are both even money or 1/1 (fractional)
or 2.0 (decimal), meaning that 🔑 a £1 stake will return £2 (£1 profit plus the £1
stake).
In American or moneyline odds the heads and tails 🔑 outcomes would be expressed
as -100 or +100. And 100 is the key number, which we will illustrate with another
🔑 example. This time it’s an American football match and the American/moneyline odds are
as follows:
New England Patriots @ -145
Miami Dolphins 🔑 @ +130
If you think Miami
Dolphins will win, the +130 means that for every £100 you stake on them, you 🔑 will win
£230 (£130 plus your £100 stake). A £10 bet would mean you will win £23 – your £10
🔑 stake and £13 profit (calculated as £10/£100 x 130).
The minus in front of the New
England Patriots odds means they 🔑 are favourites and the calculation is different. The
-145 means you will win £100 for every £145 you stake. So, 🔑 if you were to place a £10
bet it would return £16.90 – your £10 stake and £6.90 profit (calculated 🔑 as £10/£145 x
100).
In both examples for the £10 stake the calculation is:
(actual stake/American
odds stake) x American odds winnings.
How 🔑 odds work summary
That’s our full rundown on
how betting odds work, so now you will know how to read odds, 🔑 what the probability of a
bet winning is according to the odds and what your potential winnings are.
Now you’re
ready 🔑 to start betting, and if you want to open an account with a bookmaker, you should
take advantage of the 🔑 incredible new customer offers available on the Telegraph’s free
bets page.
Fractional odds tell you the potential winnings in relation to 🔑 the stake you
place on the bet. For example, if you place a £1 bet on West Ham to beat 🔑 Tottenham at
4/1, it will pay out £5 if successful (£4 profit plus your £1 stake). See below for
more 🔑 examples of how to read betting odds.
