How do Betting Odds Work?

Betting odds tell you how much profit you can receive from a bet. There are many different odds formats, from fractional to decimal odds and even American style. But how do betting odds work exactly? And how much will my bet win? 

Our 'betting odds explained' guide answers those questions and more, while also taking you through the various odds formats you'll find at the best betting sites.

How do Betting Odds Work?

Betting odds allow you to work out your potential profits from a bet and allow the bookmakers to make their money by gaining an edge on the punter.

When punters can find an edge on the bookie, however, the roles are reversed and winning bets are made.

In the majority of cases, the math is simple and you should be able to roughly work out your profits at a glance. In fact, most new betting sites will automatically do this for you when you add a stake to your online bet slip.

With that said, understanding the most popular types of odds and how to use them will make betting easier for you.

How to Read Betting Odds

There are loads of odds formats but most have simple formulas you can read very quickly. For example, with fractional odds, the number on the right of the fraction tells you how much you can win if you wager the number on the left.

You can change your stake, which requires more consideration, but getting an idea of the value of your odds is still simple.

Types of Betting Odds Formats

We've listed the three most common odds formats below, with simple explanations alongside each of them.

Remember that if you want to go from fractional to decimal odds or vice-versa, most betting sites will allow you to change the format to suit your preferences.

Fractional Betting Odds

Fractional odds are the most commonly-used odds format in the UK and Ireland and you’ll find them available with most online bookmakers worldwide. These odds will display your potential profit as a fraction, such as 3/1 or 1/1.

The number on the right of the line indicates how much you need to bet to get a profit equal to the top number.

For example, say you're on one of our recommended horse racing betting sites and you want to bet on a horse. You see your pick is 3/1 to win the race. That means you'll need to wager A$1 to win A$3.

You’ll have your A$1 stake and A$3 profit in your account after a successful bet, giving you A$4. 1/1 odds, also known as evens, will provide you with a profit equal to your stake.

Decimal Odds

You’ll find that decimal odds are popular across continental Europe, Australia, New Zealand and Canada.

Rather than displaying your profits from a particular stake, all decimal odds display your stake and profit from a A$1 wager. For example, with odds of 3.0, you can make A$2 profit from a A$1 stake. This would be 2/1 in fractional odds. 

Decimal odds are commonly used in exchange betting and have become more popular recently as a simple way to read odds. It's arguably a lot easier to understand decimals like 5.25 than awkward fractions like 17/4.

American Betting Odds Explained

American odds, as the name suggests, are commonly used in the US and give you a triple-digit number with either a (-) or (+) symbol. The whole American odds system is based on A$100.

For example, the numbers next to a (-) sign tell you how much you need to bet to win A$100. If you're browsing the best football betting sites and you fancy a team to win at odds of -200, you need to wager A$200 to win A$100 in profit.

Following a winning bet on these odds, you’d have A$300 in your account (your stake and your wager).

The (+) symbol next to the numbers tells you how much you can win by betting A$100. If you wager A$100 on odds of +200, you get A$200 in profit. After this bet, you’d have A$300 in your account (your stake and your profit).

Odds Conversion Table

If you want to convert fractional to decimal odds or even American odds to fractional, you can use the below table to see some of the most common price conversions.

How to Convert Odds Manually

You can use our conversion table to convert betting odds or find a site to convert odds. However, the best way to understand odds and use them to boost your betting is to be able to convert between odds formats manually.

Below, we’ve explained how to convert between the most common odds formats.

Convert Fractional Odds to Decimal

It's actually quite straightforward to convert fractional to decimal odds with simple maths.

All you need to do is divide the top number by the bottom number and add one to the decimal you get. For example, to get 1/2 odds in decimal, you need to divide 1 by 2 to get 0.5. Add 1 to 0.5, and you get decimal odds of 1.50.

You need to add 1 to all fractional odds to decimal odds conversions, because decimal odds include your stake, unlike fractional odds.

Convert Decimal Odds to Fractional Odds

Converting from decimal to fractional odds is slightly more challenging but can still be done.

All you need to do is take 1 away from the decimal. For example, take 1 away from 4.00 to get 3.00.

If you’re left with a whole number or only zeros after the decimal point, just put that over 1. The 3.00 from the previous example becomes 3/1.

Yet this becomes trickier with odds that are not whole numbers when you take away 1. For example, 5.5 minus 1 is 4.5. With these odds, you must multiply until you reach a whole number. So with 4.5, you need to multiply it by 2 to get 9.

Now, whatever number you need to multiply your original number by goes under your new whole number. In this example, 4.5 becomes 9/2.

American Betting Odds vs Decimal Betting Odds

While American betting odds may initially look confusing, it becomes easier if you remember that the favourite’s odds always start with a minus symbol in front of them, such as -163.

It doesn’t mean that you actually lose money but that you would effectively win A$63 should you stake A$100 on this selection.

When it comes to a selection at bigger odds, such as +300, A$300 this is the amount of money you would win if you staked A$100.

Remember that these moneyline odds always use a baseline of A$100, which might benefit higher-staking customers, although decimal odds are probably easier to understand.

How to Calculate Winnings with Betting Odds

While everyone wants betting odds explained, they aren’t designed to be challenging to read.

Once you understand how odds work, you can determine your profits just by glancing at the betting lines.

If you want to understand your odds meaning quickly, check out our expert advice below.

Fractional Odds Example

Using odds of 3/1 as an example, you can easily work out what you could win by looking at these fractional odds.

For example, if you are wagering A$1, you can win A$3. If you wish to bet A$5, you will make A$15 profit.

Decimal Odds Example

Seeing your profits with decimal odds is simple. All you have to do is subtract 1 and multiply the number by your stake.

For example, take away 1 from the odds of 4.00, and you get 3.00. If you want to bet A$1, you’ll make a profit of A$3. If you wish to wager A$12, you’ll get a profit of A$36.

American Odds Example

With American odds, there are two types to consider. However, calculating your profits is easy using two simple formulas.

If you're betting on (-) odds, you just divide your stake by the odds and multiply by 100 to calculate your potential profits. If you’re wagering on (+) odds, multiply your stake by the odds and divide by 100.

If you are betting A$100, A$10, or A$1, you can also see your potential profits at a glance.

Betting Odds and Implied Probability

The best way to find value while betting is to convert odds into implied probability.

Implied probability is a percentage which tells you how likely something is to happen.

You can find betting value if you think something is very likely to happen, but a bookmaker’s implied probability doesn’t reflect this. We’ve listed the formulas to work out implied probability with the three most common types of odds.

Fractional

bottom number / (top number + bottom number) x 100 = Implied Probability

Example (1/2):

1 (top number) + 2 (bottom number) = 3

2 (bottom number) / 3 = 0.66

0.66 x 100 = 66.6

Implied Probability = 66.6%

Decimal

(1/decimal odds) x 100 = Implied Probability

Example (4.00):

1/4.00 = 0.25

0.25 x 100 = 25

Implied Probability = 25%

American

(-) Odds: odds / (odds + 100) x 100 = Implied Probability

(+) Odds: 100 / (odds +100) x 100 = Implied Probability

(-) Example: -250

250 +100 = 350

250/350 = 0.714

0.714 x 100 = 71.4

Implied Probability = 71.4%

(+) Example: +400

400 + 100 = 500

100/500 = 0.2

0.2 x 100 = 20

Implied Probability = 20%

How Do You Work Out Betting Odds?

Bookmakers use implied probability to determine the odds for every event you see at a betting site.

Betting sites will assign every outcome a probability by analysing past results and statistics to get the most accurate number. The bookie will also add a 'vig' or 'juice' to every probability to ensure it makes a profit.

Many bookmakers will adjust betting lines to encourage bettors to back both sides and guarantee a profit. Doing so can lead to some betting lines having a lower or higher implied probability than you think is fair, which is where you find value in your wagers.

Use Betting Odds to Increase Potential Profit

So, the next time you find yourself asking, 'how do betting odds work?' you’ll have all the answers.

After reading this page, you should better understand how sports betting sites use odds to display your potential profits.

You can use this knowledge to compare the odds at top bookmakers and to select the bookie with the best odds. Better odds means better potential payouts.

Thankfully, most bookmakers will calculate your potential profits or you and display them on screen once you've added a stake to your bet slip. 

Before placing any bet, always ensure the odds accurately reflect the probability of the prediction.