For someone new to the betting industry, understanding how the odds work is like learning the alphabet. Basics!
It is fundamental because betting odds allow you to understand the likeliness of an event happening apart from what you will be earning. Now, there could be multiple things you are betting on, but every scenario will have its own odds.
Odds essentially give you a measure of a particular result. To begin with, odds are nothing but a ratio of how likely an event is likely to happen compared to the chances of the event not happening in terms of numbers. Odds are compiled by the bookmakers not only to represent the likelihood of an event happening but also to calculate the payouts for winning wagers.
Every time you place a bet with a bookmaker, you will be given odds that will impact your winnings. That’s the thumb rule of betting. In the UK and around Europe, these odds are either represented in fraction (2/1) or in decimals (3.0). In the USA, however, a number has a plus or minus in front of it (+200).
High odds and low odds
For any given situation, there can only be two types of odds, and understanding the difference is quite simple. High odds means something is unlikely to happen. Similarly, low odds means the probability of that event occurring is high.
Furthermore, one also needs to keep in mind that higher the odds, higher the payout, higher the risk, and vice versa.
For example, in cricketing terms, say India are playing Zimbabwe. The chances of India winning the match are higher and thus the betting odds for their win will be low. On the other hand, the odds of Zimbabwe winning will be high and the payout will be too. That, however, comes at its fair own risk and is the gamble that one has to take for an unlikely outcome.
Understanding the probability
Probability is nothing but a numerical description of how likely an event is to occur. It has significant relevance in sports betting. Say if a bookmaker has an outcome for an event that has a high probability, the event is most likely to happen.
A simple explanation of probability can be understood with an example of a football match. The probability of Manchester United scoring a goal against Arsenal is 50 per cent because it will either happen or it will not. It is represented as odds of 1/1.
Fractional and Decimal odds
Understanding the probability of an event happening through fractional odds could be slightly complex. Let’s assume that the odds of Manchester United beating Arsenal is 4/1.
In the above case, to understand odds from percentage points, just add the odds. Here the sum becomes the denominator. Hence for United’s odds in this case, just divide their value with the sum. So if the sum is 5 and United’s odds are 4 then it’s 4/5 = 0.2, which is 20%.
Deciphering the winnings through fractional odds can be a bit tricky. Simply put, an odd of 9/1 represents a winning of 9 units for every 1 unit you bet.
While fractional odds are quite complex in nature, decimal odds are rather easy to understand. Here the calculation is done as follow:
Winnings = (Odds x stake)
For example, odds of 9.0 can be calculated as [9.0 x 10 (your stake)] which translates to a winning of 90 units.
The American way
Unlike the European trend, the odds in the moneyline or American version are represented with a “+” and “-” symbol. Here, the ‘+’ sign indicates the bet has been placed on the underdog while ‘-’ means a bet on the favourites.
A positive symbol indicates how much a correct wager of $100 would win while a negative symbol expresses how much you would need to stake in order to win $100.
To understand it better, let’s take an example. A bettor has to wager the listed amount, -150 for this instance, in order to win $100. Note that the ‘-’ sign is indicating the user has put his money on the favourites. If the bet wins, he gets $250. This includes his $150 stake plus $100 winning.
Comprehending how odds work is imperative for finding success in the sports betting world. Betting without properly understanding how the sports odds work is akin to novice swimmers jumping into rough waters with the absence of a life jacket.
Although higher odds generally mean an event is likely to happen, while lower odds denote the opposite, placing bets under these assumptions isn't ideal. Hence, if someone wants to win big, understanding odds and the differences between decimal and fractional odds is a must.
As a lot of sports betting is now done online, the majority of sportsbooks have included both decimal and fractional odds. However, the former has been the most popular way as it is easier to understand. That said, where you bet decides what type of betting odds are available for punters, making it necessary to know the different types of odds that one could be exposed to.
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Author: Swapnil Bhopatkar
Featured photo: Unsplash / Alex Motoc