Understanding Betting Odds: How odds work and how to calculate potential payouts

Betting odds are one of the most important aspects of gambling, as they indicate how likely an event will happen and how much money you can win if you bet. However, betting odds can also confuse beginners, as they come in different formats and require some basic calculations. In this article, we will explain how betting odds work, how to read them, and how to calculate your potential payouts using simple formulas.

What are betting odds?

Betting odds represent the probability of an event happening in a sports or casino game. The higher the odds, the less likely the event will happen, and vice versa. For example, if a team has odds of 10/1 to win a match, the bookmaker thinks there is a 10% chance that the team will win and a 90% chance of losing. Conversely, if a team has odds of 1/10 to win, it means that the bookmaker thinks there is a 90% chance that the team will win and a 10% chance of losing.

Betting odds also tell you how much money you can win if you bet on an event and it happens. The higher the odds, the more money you can win, and vice versa. For example, if you bet £10 on a team with odds of 10/1 to win, and they win, you will get £100 in return (£10 x 10), plus your original stake of £10. However, if you bet £10 on a team with odds of 1/10 to win, and they win, you will only get £11 in return (£10 x 1.1), plus your original stake of £10.

How to read betting odds

There are three main formats of betting odds: fractional, decimal, and American. Each format has advantages and disadvantages, and you can choose the one that suits you best. Here is how each format works:

Fractional odds

Fractional odds are the most common format in the UK and Ireland, and they are written as two numbers separated by a slash (/), such as 10/1 or 1/10. The first number is the numerator, which shows how much you will win if you bet the second number, the denominator or the stake. For example, if you bet £10 on a team with odds of 10/1 to win, you will win £100 (£10 x 10) plus your stake of £10. If you bet £10 on a team with odds of 1/10 to win, you will win £11 (£10 x 1.1) plus your stake of £10.

To calculate the probability of an event happening using fractional odds, you can use this formula:

Probability (%) = denominator / (numerator + denominator)

For example, if a team has odds of 10/1 to win, their probability of winning is:

Probability (%) = 1 / (10 + 1) = 0.09 x 100 = 9%

If a team has odds of 1/10 to win, their probability of winning is:

Probability (%) = 10 / (1 + 10) = 0.91 x 100 = 91%

Decimal odds

Decimal odds are the most common format in Europe and Australia, and they are written as one number with a decimal point, such as 11.0 or 1.1. The number shows how much you will get in return if you bet one unit of currency on an event, and it happens. For example, if you bet £10 on a team with odds of 11.0 to win, you will get £110 in return (£10 x 11), including your stake of £10. If you bet £10 on a team with odds of 1.1 to win, you will get £11 in return (£10 x 1.1), including your stake of £10.

To calculate the probability of an event happening using decimal odds, you can use this formula:

Probability (%) = 100 / decimal odds

For example, if a team has odds of 11.0 to win, their probability of winning is:

Probability (%) = 100 / 11 = 9%

If a team has odds of 1.1 to win, their probability of winning is:

Probability (%) = 100 / 1.1 = 91%

American odds

American odds are the most common format in North America, and they are written as either a positive or a negative number with a plus (+) or minus (-) sign in front of it, such as +1000 or -1000. The sign indicates whether you must bet more or less than £100 to win £100. For example, if a team has odds of +1000 to win, you must bet £100 to win £1000, plus your stake of £100. If a team has odds of -1000 to win, you must bet £1000 to win £100, plus your stake of £1000.

To calculate the probability of an event happening using American odds, you can use these formulas:

If the odds are positive, use this formula:

Probability (%) = 100 / (odds + 100)

For example, if a team has odds of +1000 to win, their probability of winning is:

Probability (%) = 100 / (1000 + 100) = 0.09 x 100 = 9%

If the odds are negative, use this formula:

Probability (%) = -odds / (-odds + 100)

For example, if a team has odds of -1000 to win, their probability of winning is:

Probability (%) = -1000 / (-1000 + 100) = 0.91 x 100 = 91%

How to calculate potential payouts

Now that you know how to read betting odds, you can also calculate how much money you can win if you bet on an event and it happens. The formula for calculating potential payouts is:

Potential payout = stake x odds

For example, if you bet £10 on a team with odds of 10/1 to win, your potential payout is:

Potential payout = £10 x 10/1 = £100

If you bet £10 on a team with odds of 1/10 to win, your potential payout is:

Potential payout = £10 x 1/10 = £11

You can also use online calculators or converters to find your potential payouts using different betting odds formats.

Conclusion

Betting odds are essential to gambling, as they show how likely an event will happen and how much money you can win if you bet on it. However, betting odds can also confuse beginners, as they come in different formats and require some basic calculations. In this article, we explained how betting odds work, how to read them, and how to calculate your potential payouts using simple formulas. We hope that this article helped you learn more about betting odds and how to use them in your favour.