Sports Betting and Understanding Payouts

There are a few important aspects of sports betting payouts that you must understand in order to ensure that you’re able to take full advantage of wagering opportunities and to successfully manage your bankroll. First we’ll take a look at some basic odds and related payouts and then we’ll consider some of the finer aspects of the payout.

Basics Regarding Sports Betting Payouts

You must be able to read the odds listed in order to understand how much you will make on a bet. The amount of cash that you make, your profit, is your payout. Some sports bets, such as those involving a point spread, usually pay approximate odds of 1:1.  That means for every dollar wagered, you’re going to get that dollar plus another buck if you win your wager.

Here’s a look at the three ways of expressing odds that you’ll usually find listed for a favorite.

Moneyline (American)          Fraction (English)                 Decimal (European)

-200                                                    1/2                                          1.50

Each of these expressions of odds represents the same wager and payout. For every $2.00 bet, you win a dollar, making the total amount of cash you get back $3.00 ($2.00 bet + $1.00 payout = $3.00 return).

Here’s another example of odds. These are an example of the type of odds given for a team that’s not favored.

Moneyline (American)          Fraction (English)                 Decimal (European)

+200                                                   2/1                                          3.00

These odds tell you that for every $1.00 you bet, you’re going to get $2.00 back. The payout on this sports bet is $2.00  ($1.00 bet + $2.00 payout = $3.00 return)

Notice that you get the same amount of cash back on both bets but that you actually make double on the second wager. Never confuse “return,” which is the total amount of cash you get back when you win, with “payout,” which is actually how much you make. When it comes to sports betting you’re biggest concern is how big the payout is in relationship to how much you wagered.

The Commission

One element that many new bettors are not aware of is the commission that is paid by gamblers to bookies or sportsbooks. The commission is often referred to as vig, vigorish or juice.

This part of sports betting is important because it alters your payout, lessening it. Here’s the way it works. Vig can be readily seen in point spread betting and when you bet on the favorite using the moneyline.

Although the spread odds expressed in sports betting are 1/1, they are really approximately 1/1.10.  Here’s why.

When you place a $1.00 point spread wager, you place the dollar bet plus 10%. Thus, you would place $1.10 on a team to win $1.00. You get back your original bet, $1.10, and the one-dollar payout. But if this were a true 1/1 wager, your payout would be $1.10. What happens to the 10 cents? That’s the sportsbook’s commission.

The same can be seen with the -110 moneyline. In order to win $100 on that moneyline, you must put up $110. The way bookies make their commission on the moneyline is they charge more than they should to bet on the favorite and undercut the payout on the underdog. Thus, the vig is often hidden, but it is there.

Managing Your Bankroll

It’s important that you learn how to manage your sports betting bankroll and that means keeping track of all wagers, loses and payout. When looking at a potential payout always consider the risk involved in the bet and what percentage of your bankroll you’re willing to commit to that bet. Never risk more than 5% of your bankroll on a bet.

Understanding the payout in relationship to the amount of money risked and the total return is important for you to be able fully manage your bankroll and sports betting business.