Betting Odds Explained: A Beginner’s Guide
If you’re new to betting, one of the first things you should do is learn how betting odds work. It’s critically important because it allows you to understand how likely an event is to happen, and what your potential winnings will be. At first, it may appear confusing. But read this betting odds explained guide to help to understand.
In betting, odds represent the ratio between the amounts staked by parties to a wager or bet. Thus, odds of 3 to 1 mean the first party (the bookmaker) stakes three times the amount staked by the second party (the bettor).
What is Probability?
At the most basic level, betting provides you with the ability to predict the outcome of a certain event. If your prediction is correct, you will win money.
For any given event, there are a certain number of outcomes. Take rolling a dice for instance. If someone rolls a dice, there are six possible outcomes. Therefore, if you bet that the person rolls a ‘one’, there is a 16.67% chance that will happen.
Using Betting Odds to Calculate Probability
Whenever you see two numbers separated by a trailing slash, i.e. 4/1, this is known as fractional odds. From this, you can calculate how likely a given event is to happen with a calculation. For ease of explanation, let’s replace the numbers with letters i.e. 4/1 becomes A/B. Here is the calculation: Probability (%) = B / (A+B).
- 9/1 can be calculated as 1 / (9 + 1) = 0.10 – There is a 10% chance that the event will happen.
- 4/1 can be calculated as 1 / (4 + 1) = 0.20 – There is a 20% chance that the event will happen.
- 1/1 can be calculated as 1 / (1 + 1) = 0.50 – There is a 50% chance that the event will happen.
- 1/4 can be calculated as 4 / (4 + 1) = 0.80 – There is a 80% chance that the event will happen.
Hooray! We’re making progress. Given a fraction, we can now tell how likely (the probability) what we’re going to bet on will happen. Now let’s figure out how much money can be won using betting odds.
Using Betting Odds to Calculate Winnings
Betting odds allow you to calculate how much money you will win if you make a bet. Let’s use the same examples as before, with the same replacement of numbers for letters, i.e. 4/1 becomes A/B. Quite simply, for every value of B that you bet, you will win A, plus the return of your stake.
- 9/1 for every £1 you bet, you will win £9.
- 4/1 for every £1 you bet, you will win £4.
- 1/1 for every £1 you bet, you will win £1.
- 1/4 for every £4 you bet, you will win £1.
What About Decimals?
Decimals are far more common on exchanges, such as Betfair, but all leading betting sites do give you the option to view betting odds in this format. They are an alternative to seeing betting odds in the fraction format, and in our opinion, are easier to work out. Here is the calculation: winnings = (odds * stake) – stake. Let’s illustrate it with some examples
- 9.0 can be calculated as (9.0 * £10 stake) – £10 stake = £80 winnings.
- 4.0 can be calculated as (4.0 * £10 stake) – £10 stake = £30 winnings.
- 2.5 can be calculated as (2.5 * £10 stake) – £10 stake = £15 winnings.
- 1.25 can be calculated as (1.25 * £10 stake) – £10 stake = £2.50 winnings.
To make all this information slightly easier to understand, here is a quick example of a bet on a football match.
If you were backing Arsenal to beat Liverpool 2-0 you might see the odds of that outcome at 4.0 (decimal) or 3/1 (fractional)
You can immediately work out how much your potential winnings would be if your stake was £10:
- 4.0 can be calculated as 4.0 * £10 stake – £10 = £30 winnings
- 3/1 for every £1 you bet you win £3 – £30 winnings
- Remember, you will receive your original stake back as well.
You can also use our bet calculator to help you calculate winnings.
USE BET CALCULATOR
Decimal Odds Versus Fractional Odds
One way isn’t better than the other but there is certainly a trend emerging towards using decimal odds. Traditionally, fractional odds have been used in the UK, especially at racecourses and on the high street. There are two key differences.
Generally, decimal odds are easier to understand. Based on this, there has a movement to attract more people to horse racing by making it more accessible to the average punter. Ten years ago, if you were going to Cheltenham, all the odds would be displayed as fractional odds. Now, they’re largely all in decimals.
The second difference between the formats is that fractional odds only represent winnings, and do not include the returned stake compared to decimals which do include the stake. The transition from fractional odds to decimals largely kicked off with the growing popularity of the betting exchanges such Betfair.
For odds to change slightly, it’s really difficult to marginally increase or decrease the probability without creating large fractions. These are hard to compute for the punter and are not a great way of showing betting odds explained.
Use Our Tool to Convert Betting Odds Into Your Favourite Format
You may find that your favourite online betting site presents the odds exactly how you likely them to be. But sometimes you might need to convert them to understand.
Our odds converter tool will allow you see odds in whatever format you like . Not only that, but it’ll tell you how likely the selection is to win!
Betting odds represent the probability of an event to happen and therefore enable you to work out how much money you will win if your bet wins. As an example, with odds of 4/1, for every £1 you bet, you will win £4. There is a 20% chance of this happening, calculated by 1 / (4 + 1) = 0.20.
That’s it! Hopefully, that is betting odds explained. You should now have the knowledge to read betting odds, understand how likely it is to happen, and how much you stand to win.
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Betting Odds FAQs
What is better, decimal or fractional odds?
There is no right or wrong when it comes to odds format. You should just use what is more familiar and easier to understand for you
What should I do if odds are listed in decimal and I usually use fractional?
You can always use an odds convertor. But at most online betting sites you will be given the option
Why is decimal odds use more common these days?
UK bookmakers traditionally used the fractional odds format but decimal usage is becoming more common. This may be because they are easier to work out potential winnings. Or because they are more commonly used throughout Europe.