What Are Betting Odds?
Betting odds reflect the probability of a particular game, event, or other proposition. The sportsbooks set these based on a number of factors. The opening odds will reflect where the sportsbooks see that probability, but over time, the odds may change to reflect the betting market itself. All sportsbooks are looking to mitigate risk, so as money comes in on one side of a particular bet, the sportsbooks will look to shift the odds to limit their liability. The ultimate goal for the sportsbook is to have as close to an even balance in the action on each side as possible.
When one side has shorter odds, that means the sportsbooks see that side as being more likely to win or where the majority of their liability lies. The longer the odds, the greater the payout for the customer if that side of the bet wins.
How To Read Betting Odds
Betting odds can be particularly confusing, especially because there are a number of different ways of displaying them. The standard in the United States is “American Odds,” where you will them displayed in the form of hundreds with either a plus or a minus sign in front of them. A minus side distinguishes an outcome that is more likely than not to happen, often referred to as the “odds on favorite,” while a plus in front of the odds means the implied probability is 50% or lower. One other type of betting odds you may see in American Odds is the word “Evens” or “Evs,” which indicates a 50-50 proposition for the sportsbook.
Working out your return when reading American Odds is relatively simple when there is a plus sign. Odds of +110 mean that if you bet $100, you will get back a profit of $110 (i.e. you will get your $100 stake back and then a further $110). That is the case regardless of how high or low that number is (e.g. +5000 would be $5,000 in profit). You can then simply divide that number by your stake to calculate your payout (e.g. +110 odds with a $20 stake will net you $22 in profit).
Where things get trickier is when a minus sign is involved in American Odds. In those instances, you have to think in the opposite direction. For example, odds of -110 mean that you have to bet $110 to get $100 in profit plus your $110 stake back. Much like with plus odds, this is the same regardless of the number (.e. -500 means you have to stake $500 to earn $100 in profit.
If you see odds displayed in fractional (11/10) or decimal form (2.1), that is where things can get a little more complicated to decipher. Ultimately, they make logical sense when you understand them, and our calculator above can help you easily convert from one form to another.
For some context, if you see 11/10 in fractional odds, that is the same as +110 in American Odds. Essentially, whatever you see as the left-hand side or “numerator” of the fraction is what you will profit from betting the right-hand side or “denominator” (i.e. if you bet $10, you will get $11 in profit plus your stake back). Similarly, if the odds are 10/11, you have to bet $11 to get a profit of $10.
Decimal fractions are a little more complicated because the way they are displayed essentially tells you the total you will get back if you bet $1. Decimal fractions of 2.1 tell you that if you bet $1, you will get $2.1 back in total (a profit of $1.1 and your $1 stake back). To put that in the +110 context, that is a $110 profit on a stake of $100 but a total payout from the sportsbooks of $210 (your stake and the $110 profit).
Where decimal odds are far more confusing than American or fractional odds are when you are betting on a favorite. Understanding -110 and 10/11 is relatively simple once you have a grasp of it, but with decimal odds, that same implied probability is displayed as 1.91. It is exactly the same concept of betting $110 to make $100 in profit, but it is shown as getting back $191 on a $100 stake (i.e. a $91 profit and your $100 stake).
Why Are Odds Important?
Sportsbook odds are important because they tell you both the implied probability of an event and the potential payout if you place a bet. Odds of +100, 1/1, 2.0, or “evens” is a 50-50 probability while -110 and the equivalent is a 52.36% implied probability. Therefore, you can use the odds to determine a good bet by deciding if your knowledge and belief give one side a greater chance of winning than the implied probability.
What you will notice is that the implied probability never adds up to 100%. For example, in a game where both sides are viewed equally, the odds will be -110 on both, suggesting that there is a 104.72% implied probability, which is statistically impossible. This is because of the “vig” or the “juice.” The most simple way of looking at this is that it is the cut or margin that the sportsbook applies for accepting a gambler’s wager.
The vig ensures that the sportsbook will make a profit if both sides of a two-way bet are evenly bet. Using the example above, if two sides that are -110 are both wagered on five times with stakes of $110 per bet, the sportsbook will make a profit of $100 regardless of the result. Across the 10 wagers, they will take $1,100, but the maximum they would payout is $1,000, regardless of which side wins. Now extrapolate that to 100 or 1,000 wagers, and you can see how the sportsbooks make their money.
Of course, sometimes, the sportsbook will have more liability on one side of a bet than the other, meaning they will make a loss on a particular outcome. However, that is why you will see the odds shift. If 100% of the initial wagers come in on one side, then the sportsbooks will incentivize future bettors to bet the other side by making the odds more favorable. Doing so will even up the liability the sportsbooks have on each side of that particular game, event, or proposition.