Betting odds, simply referred to as ‘odds’, are a numerical expression in the form of a pair of numbers, i.e. 2/1 or ‘two to one’. The odds on a particular horse/person/event are meant to represent the likelihood of that prediction coming true. Likewise, the odds against such an event represent the probability that it will not come true.
In terms of gambling, odds as a fraction represent the ratio between the amount staked (or risked) by the bettor and the amount they can expect to win if they are correct. As there is no such thing as a guaranteed win for a horse, football team or sports person, gamblers place their bets based on the balance of probability.
With this in mind, punters will look for ‘value’. For example, a horse may be quoted as a 4/1 shot. Given that the stake is included and the bookmaker’s overround may be 105%, then this means they feel the horse basically has around a 21% chance of winning.
The punter knows that, just because he fancies this particular horse, it is not a certainty. However, he may feel that the horse has a 50% chance of winning the race and so therefore should be priced at around the 11/10 mark which is a huge discrepancy. That being the case, the punter will take the bet because they believe they are getting great value for money.
What Does ‘Probability’ Mean?
The intrinsic explanation of betting basically means you are predicting the outcome of a contest or event. Should you prove to be correct, you will win money based on the odds you have received. For any given race, match, event etc, there will always be numerous possible outcomes.
When playing with a pack of cards; there will be a 1 in 4 chance of the card being a spade. If someone wanted to bet that the next card would be a spade, there would by a 25% chance of that happening. Odds on such events simply represent how likely a certain outcome is, though a bookmaker will also add in their overround (their guaranteed profit) and will show the odds as a fraction. Some bookmakers, especially in Europe, will show the odds as decimals instead (we will explain the difference later).
How To Calculate Odds
Seeing ‘nine to one’ written as 9/1 means the odds are fractional. These odds will, in general, give you the basic probability of an event happening, though we must always remember that there will be an overround or ‘vig’, giving the bookmaker an advantage. The basic calculation then is: Probablility (%) = B / (A+B).
The odds on a given bet allow punters to calculate how much they can expect to win if making a successful bet. Using a similar example to the above, e.g. 6/1 can be represented by A/B. Simply put, for every value of B that a punter stakes, then will win A from the bookmaker, plus their original stake.
- 1/1 (or ‘evens’) : each £1 bet returns £1 (plus stake, always)
- 2/1 : each £1 bet returns £2
- 7/2 : each £1 bet returns £3.50
- 10/1 : each £1 bet returns £10
- 1/3 : this time £3 would need to be staked to win just £1 profit. These negatives are referred to as ‘odds-on’ and usually mean that a selection has a huge chance of winning their event.
In the UK, decimal betting is used primarily on betting exchanges, such as BETDAQ and Betfair. Should you prefer decimal betting though, something common among bookmakers and punters in Europe, most online betting sites have an option to use these odds instead of fractions.
The main difference and the thing to remember is that decimal odds will always show the stake included, i.e. if a selection were effectively 7/2 as a fraction, it would be shown as 4.5 on the decimal odds. Put simply, always take off one point when working out what profit you expect to be paid from bet placed in decimal odds.
- 4.0 would mean £3 profit for a £1 stake
- 2.5 would mean £1.50 profit for a £1 stake
- 1.85 would mean £0.85 profit for a £1 stake
- 17.75 would mean a £16.75 profit for a £1 stake and is essentially 16.75 to 1
Comparing Decimals And Fractions
In reality there is no right or wrong here; betting in either decimals or fractions won’t give punters an advantage or a disadvantage, they are merely different ways of working out how much a bet will pay out. This basically comes down to traditions, as the UK and Ireland have always used fractions whereas Europe have always placed their bets in decimals.
For UK and Irish punters, seeing decimals on a betting board was basically a once-a-year thing until recent times. On Prix de L’Arc de Triomphe day in Paris each October, TV viewers would often get confused at the ‘parimutuel’ system, which is essentially decimal betting. As the betting world becomes smaller though, we see these odds all the time including on our own exchanges and they are now much more commonly used at home.
The key fundamental difference is that parimutuel style betting includes the stake, whereas fractional odds only show the profit a gambler can expect from placing his or her bet. Despite the rise in popularity of decimals, on racecourses and in betting shops around the country fractions are, and probably always will, be used in the UK and Ireland.
Summary Of ‘Betting Odds’
Betting odds basically show the general probability of an event happening, i.e. a horse to win a race or a football team to win a match. Showing the odds enables betting punters to work out how much profit they can expect to win if their bet is successful. Simple really!
One final thing to remember is that betting odds are very fluid; they will change all the time during the lead up to an event. In horse racing for example, if a runner is particularly well fancied and a lot of money is being bet on the horse, its odds will shorten.