Betting odds explained
In the first article ‘Understanding Betting Odds’ in this series we promised to tell you the whole truth and explain how bookmakers offer odds and why a bettor should use odds not as an indicator of potential profit, but as a betting tool. All this you will learn in the following articles, but for now it is necessary to explain to beginners what betting odds represent and what formats of odds exist. In this article we explain all about odds in detail.
If you’re new to betting and want to go home with money in your pocket you need to understand odds. There is no betting without odds, so there will be no winning players without understanding odds. The odds format usually depends on which country you live in, however you must be able to read odds and understand their meaning. Furthermore, you should be able to calculate potential winnings for bets in different odds formats and comfortably switch between these formats. There are three main formats of odds: Fractional, Decimal and American. As you can see the names describe how the odds are displayed and of course American format is represented by North American bookies. All odds formats are offered by almost all bookmakers in the world. The two most common odds formats are Decimal and Fractional. If you are living in Europe, you most likely used to Decimal odds, which is the most popular format currently in use. The traditional fractional system is largely used in Britain, but frankly speaking, this odds format is really a legacy of the past. Needless to say that regardless of which odds format you use, the potential profit will be the same.
The odds formats are simply different ways to display the same thing.
Fractional odds explained
Things get more complicated whenever you see two numbers separated by a slash; it’s a traditional format of odds used in the UK! A fractional odd is usually displayed as 8/1 or 8-1 which is read or spoken as “eight-to-one”. It’s a little bit confusing to calculate the winnings using this format so you just simply need to treat odds like fractions; after all, it is just mathematics. A numerator displayed above a slash is how much money you will win, a denominator, displayed below is how much you need to bet. So, for instance, if you bet £1 at 8/1 your profit will be £8, plus you will receive your £1 back and your estimated returns will be £9. Well, it looks very simple when a denominator is equal to 1, but what about such odds as 6/4 or 7/2? It is not so easy to calculate profit using such fractional odds! It’s already quite clear if you bet £2 at 7/2 you will win £7, but how much money you will get if your stake is £12 for example? Yes, it is not so easy and quickly to calculate profits from £12 stake at 7/2! You will have to remember the math and fractions.
For our example it will be £12 / 2 x 7 + £12 = £42 (£30 winnings plus your £12 stake back). Nowadays decimal odds are slowly taking over. Meanwhile fractional odds are rarely used even in the United Kingdom as it is much easier to calculate profits from decimal odds. But if you are an old fogey or do not like changes and still want to use the Fractional format you must know such terms as ‘odds against’ (when a denominator is larger than a numerator which means the winnings are greater than the stake) and ‘odds on’ (when a numerator is larger than a denominator which means the winnings are less than the stake).
Decimal odds explained
As it was mentioned above fractional odds are a legacy of the past and it’s hard to believe that anyone still uses this format. Let us imagine the situation when someone asks you how much money you will win from your bet and you say ok, my stake is ₤350 at 5/2…and my profit will be… hey, give me half an hour to calculate! Decimal odds are extremely easy to understand and that’s why they are more common in use. This format makes betting simpler since you do not have to calculate complicated fractions; it’s just a multiplier which shows your estimated returns (winnings + stake).
It is an easy way to calculate profits from Decimal odds, so remember your bet was ₤350 at 5/2. So, using Decimal odds it will be ₤350 at 2.50 and you can quickly say – my estimated returns will be ₤875 (₤350 x 2.50), including ₤525 winnings. As easy as ABC!
American odds explained
You’ll find it hard to believe but there can be even more confusing odds format than fractional! The North American odds (US odds or Money line) are quite different from the other formats. Probably, you need to be an American or always place $100 bets to understand why this odds format is needed… Ok, the fundamental idea of American odds is based on a $100 stake, and indicates a positive or negative amount of the winning. So when odds have a minus (-) the number means what amount you will have to bet to get a $100 profit. For example, odds (-200) mean you need to stake $200 to return $100 in winnings. So it will be like 1.50 at Decimal odds or 1/2 at Fractional odds. And plus (+) odds will show you how many winnings you will have if you stake $100. For instance, odds (+140) mean you will get $140 for a stake of $100. Thus, American odds (+140) are equal to decimal odds of 2.40. It becomes a little bit difficult to calculate winnings if you want for example to bet $350 at odds (+150) or (-150). Yes, American odds are a tricky thing!
Using the example above, if your stake is $350 with Negative American odds of (-150) you will get (100 / 150 x 350) $233 profit plus $350 stake; if your stake is $350 with Positive American odds of (+150) you will get (350 / 100 x 150) $525 profit plus $350 stake. That’s an American way, but it’s slightly difficult for the European mind…
How to convert one odds format to another?
Perhaps when you become a professional bettor you will be able to convert odds in your head, but for now you will need a math. Our conversion formulas will help you to convert one odds format to another.
→ To convert positive American odds into Decimal use the formula below:
(American odds + 100) / 100 = Decimal Odds
See how it works in practice (converting +150): (150 + 100) / 100 = 2.50
→ To convert negative American odds into Decimal use the formula below:
(American odds + 100) / American odds = Decimal Odds
See how it works in practice (converting -150): (150 + 100) / 150 = 1.67
→ To convert positive American odds into Fractional use the formula below:
American odds / 100 = Fractional Odds
See how it works in practice (converting +150): 150/100 = 3/2
→ To convert negative American odds into Fractional use the formula below:
100 / American odds = Fractional Odds
See how it works in practice (converting -150): 100/150 = 2/3
→ To convert Decimal odds of 2.00 or greater into American odds use the formula below:
100 x (Decimal Odds – 1) = American odds
See how it works in practice (converting 2.50): 100 x (2.50 – 1) = +150
→ To convert Decimal odds of less than 2.00 into American odds use the formula below:
(-100) / (Decimal Odds – 1) = American odds
See how it works in practice (converting 1.80): (-100) / (1.80 – 1) = -125
→ To convert Decimal odds into Fractional use the formula below:
(Decimal Odds – 1) / 1 = Fractional Odds
See how it works in practice (converting 1.80): (1.80 – 1) / 1 = 0.8/1 than multiply both sides by 100 (80/100) and simplify 4/5. As usually it’s not so simple when using fractions!
→ To convert Fractional odds when a numerator is greater than a denominator into American odds use the formula below:
Fractional Odds x 100 = American odds
See how it works in practice (converting 6/4): 6/4 x 100 = +150
→ To convert Fractional odds when a denominator is larger than a numerator into American odds use the formula below:
(-100) / Fractional Odds = American odds
See how it works in practice (converting 2/5): -100 / (2/5) = -250
→ To convert Fractional odds into Decimal use the formula below:
(Fractional Odds) + 1 = Decimal Odds
See how it works in practice (converting 6/4): 6/4 (=1.50) + 1 = 2.50
Now you know all the necessary information about odds formats, how to calculate the winnings and how to convert one odds format to another. Don’t forget to read the first article ‘Understanding Betting Odds’ in this series. Read our next article ‘What are bookmakers margins and probabilities – how to calculate them?’