What are The Odds and How They Work?
Betting odds represent the probability of a particular outcome occurring in an event and the potential profit from that bet.
Stake + profit = payout
The first thing to understand is the difference between payout and profit. When you put a bet you give your stake to the sportsbook. If you win the sportsbook will give you your stake back and pay you your profit. You canât count getting your stake back as profit because it was yours to begin with.
If you bet 1 māļŋ at even money and the bet wins
Stake | 1 |
Profit | 1 |
Payout | 2 |
Types of Odds
Decimal
Decimal odds are the most common odds format in the modern era. Decimal odds are great because they are simple and let you do calculations easily.
Think of it like the metric system, it is superior but some old-timers and Americans stubbornly refuse to use it.
The odds will be your payout for every unit you stake.
- If the odds are 1.32 you will get back 1.32 māļŋ for every 1 māļŋ you stake.
- This payout includes your stake of 1 māļŋ and profit of 0.32 māļŋ.
Here are a couple of examples of winning bets.
Decimal odds | 1.32 |
Stake | 1 |
Profit | .32 |
Payout | 1.32 |
Also another example:
Decimal odds | 12 |
Stake | 1 |
Profit | 11 |
Payout | 12 |
The odds of 2.00 are âeven moneyâ because if you bet 1 māļŋ you will either lose 1 māļŋ or win 1 māļŋ.
Fractional Odds
Fractional odds are expressed as 2 numbers with a / in between like a fraction. Think of it as profit/stake. The first number is the amount you will profit if you stake the second number. This could also be expressed as the second number is the amount you would need to stake to profit from the first number.
Add both numbers together to see the payout you would get by staking the second number.
For example, fractional odds of 4/6 means you would win 4 māļŋ by staking 6 māļŋ. So if you stake 6 māļŋ and win, your payout will be 10 māļŋ. This is made up of your 6 māļŋ stake and 4 māļŋ profit.
Fractional odds | 12/1 |
Stake | 1 |
Profit | 12 |
Payout | 13 |
Even money would be written as 1/1 but instead is called âevensâ.
American Odds
American odds are either expressed as a negative (-) number or a positive (+) number.
Negative (-) numbers are used for bets of less than even money, such as a favorite to win. A negative (-) number is how much you would have to stake to profit 100 units. The odds of -220 means you would have to stake 220 māļŋ to win 100 māļŋ. So if you staked 220 māļŋ and won, your payout would be 320 māļŋ, made up of your 220 māļŋ stake and 100 māļŋ profit.
American odds | -220 |
Stake | 220 |
Profit | 100 |
Payout | 320 |
Positive (+) numbers are used for bets at greater than even money such as for an underdog. Positive (+) numbers are how much you will profit if you stake 100 units. Odds of +480 mean that if you stake 100 māļŋ and win, you will profit 480 māļŋ. So your payout would be 580 māļŋ made up of your 100 stake and 480 māļŋ profit.
American odds | +480 |
Stake | 100 |
Profit | 480 |
Payout | 580 |
Further reading
For a more in-depth look at odds and if you are getting good value from your sportsbooks check our odds as probability with overrround page.
How do betting odds work?
Odds directly Impact Payout. To put it simply, the greater the odds against a team, the larger the payout will be for anyone who bets on that team and wins.
Which odds format is the best to use?
You should choose the format that you find easiest to understand. Decimal odds are generally clearer and easier for beginners, yet fractional odds may appeal to traditional bettors. American odds are standard in the U.S.
Who sets the odds?
Sportsbooks usually have a lead oddsmaker managing the odds and lines for games. This oddsmaker uses sources like computer algorithms, power rankings, and external consultants to determine the odds.
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A pro writer since 2015, immersed in the world of crypto since 2016, Will built up a wealth of knowledge and experience in both crypto gambling and crypto betting, making him one of the most prominent voices in the industry. His high-quality reviews have been featured on prominent gaming platforms, making him a trusted authority in the field.
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