Understanding Odds is Important in Sports Betting

If you’re going to engage in sports betting then before you put any cash down understanding the odds is extremely important. If you don’t know how odds work, then there’s no way for you to know the risk involved in your particular wager or the potential payoff.

In understanding odds, it’s essential to realize that odds are a determination of how a specific event may play out. They are not saying that the event will end in the manner predicted. Odds predict the likelihood of an outcome.

When odds are listed, those wagering on the favored team usually do so at a disadvantage, while those wagering on the underdog are given an edge. This is done in an attempt to even out the bets so that there’s an equal amount of cash placed on each team.

When wagering, you’ll find that there are three basic ways that odds are listed. Let’s take a look at each to have a better understanding of odds.

U.S. Odds

U.S. odds are reflected in the moneyline or line. These odds are expressed in whole numbers with the number for the favored team showing a minus and the number for the team that is not favored having a plus in front of it.

Here is a moneyline for football:

Indianapolis Colts     -200

Chicago Bears          +400

In this line, the odds are in favor of the Colts winning. Indy is listed at 2:1. That means for every $2.00 bet the payout would be $3.00. That includes the $2.00 you wagered plus a profit of $1.00. If you take the Bears, the odds would be 1:4. On a $1.00 bet Chicago, which is the underdog, would pay a total of $5.00. That includes the $1.00 bet and the $4.00 payout.

In understanding odds, the bettor always gets a bigger payout when they assume a greater risk. The more the risk, which would reflect the unlikely chance of something happening, the more you profit if the bet is won. To understand the odds a bit better, consider that a team that’s listed at -200 has a 66.66% chance of winning, while a team at +400 has a 20% chance of victory.

Fractional Odds

Fractional odds, which are also known as English odds, are a bit easier to understand. If the same NFL game were listed using the fractional system it would look like this:

Indianapolis Colts     2/1

Chicago Bears         1/4

With this type of listing, the first number in the fraction, the numerator, is the amount you would wager and the second number, the denominator, is the payout amount. The payouts and risk in this example are exactly the same as that in the U.S. odds example, with the Colts paying a $1.00 profit for every $2.00 bet and the Bears offering a $4.00 profit for every $1.00 wagered.

Decimal Odds

You’ll find decimal odds utilized most often in Europe and for this reason they are known as European odds. These may be the most confusing to American bettors because the math is hidden. Once again using the same example from the NFL, the decimal odds would be displayed in this manner.

Indianapolis Colts     1.5

Chicago Bears          5

In this system, the smaller the number the less risk involved and the better the chances are that a team will be victorious. To understand how much you will win, you would multiply the amount wagered by the odds.

In this example, on a $1.00 bet on Chicago you would get back a total of $5.00 and on a $2.00 bet on the Colts, you’d realize $3.00. As you can see, the payouts are the same as they would be for U.S. and fractional odds.

Understanding Odds are Skewed

Odds can be given in various ways. The important thing to understand about odds in sports betting is that they are not real odds. They are skewed to ensure that the sportsbooks make a profit.

Built into the odds is the sportsbook’s commission, which is silently collected on every bet. In real life, the Colts probably have less of a chance of winning and should pay more while the Bears are even more likely to lose than the odds reflect and should also pay more.

Those are the basics to understanding odds. If you’re an American bettor, then chances are you’ll be utilizing U.S. odds.  Europe or other parts of the world, you’re going to encounter the two other types of listings.