Sports Betting Odds: How They Work and How To Read Them (Examples)

Understanding sports betting odds is fundamental for anyone who wants to engage in sports betting, whether online or at a physical sportsbook. 

Odds not only tell you the potential payout of a wager, but they also reflect the implied probability of a particular outcome occurring. 

We’ll cover American, British, and European odds, as well as various types of bets and how odds impact payouts.

What Are Betting Odds?

Betting odds are a numerical representation of the likelihood of an event happening. They tell you two main things:

1. The likelihood of a particular outcome – the higher the odds, the less likely the event is to happen (according to the bookmaker).
2. How much you stand to win – based on the amount you bet.

Odds are offered by bookmakers and are essentially their way of pricing up an event. For example, in a tennis match, one player may be deemed more likely to win than the other, and odds will be offered based on this assumption. The key to success in betting lies in understanding how these odds work and how they translate into payouts.

The Three Main Types of Betting Odds

While the concept of betting odds is universal, the way they are represented varies by region. The three most common formats are:

Moneyline Odds (American)

• Popular in: The United States.
• Format: Odds are expressed as a positive or negative number. A minus (-) sign indicates the favourite, while a plus (+) sign represents the underdog.
• Usage: Common in all major American sports, including NFL, NBA, and MLB.

Fractional Odds (British)

• Popular in: The United Kingdom and Ireland.
• Format: Odds are expressed as a fraction, e.g., 5/1, 10/3, 7/2. The first number is the potential profit, and the second is the stake.
• Usage: Frequently used in horse racing, football, and other sports.

Decimal Odds (European)

• Popular in: Europe, Canada, Australia, and New Zealand.
• Format: Odds are expressed as a decimal number, such as 1.50 or 3.25. This number represents the total payout for each dollar wagered, including the stake.
• Usage: Common in European football (soccer), rugby, and other international sports.

How Betting Odds Are Calculated

Betting odds are not random; they are carefully calculated based on the perceived probability of a particular outcome. These probabilities are converted into odds using specific formulas. Here’s a breakdown of how odds are generally calculated:

American Odds (Moneyline)

• For favourites: The odds show how much you need to bet to win $100.
• For underdogs: The odds show how much you’ll win if you bet $100.

Example: If the odds are -200 (favourite), you need to bet $200 to win $100. If the odds are +300 (underdog), you win $300 on a $100 bet.

Fractional Odds

• These odds are displayed as a ratio of profit to stake. For instance, odds of 5/1 mean you’ll win $5 for every $1 staked.

Example: If you bet $10 on odds of 5/1, your potential profit is $50, plus your initial $10 stake back.

Decimal Odds

• The total payout is calculated by multiplying your stake by the decimal odds.

Example: A bet of $100 at odds of 2.50 would return $250 in total payout (including your stake).

Read: Bankroll Management Sports Betting Guide

How to Read American (Moneyline) Odds

Example 1: NFL Game Moneyline Odds

Let’s take an NFL game between the Green Bay Packers and the New England Patriots with the following moneyline odds:

• Packers: -150
• Patriots: +130

Here’s how to interpret these odds:

• Packers (-150): You need to bet $150 to win $100. If the Packers win, you’ll get $100 in profit, plus your initial $150 back, totaling $250.
• Patriots (+130): A $100 bet would return $130 in profit, plus the original $100 bet for a total payout of $230.

Example 2: NBA Game Moneyline Odds

In an NBA matchup between the Golden State Warriors and Los Angeles Lakers:

• Warriors: -200
• Lakers: +170
• Warriors (-200): A bet of $200 would win you $100. If you bet $200 and they win, you’ll receive $300 in total ($200 original bet + $100 profit).
• Lakers (+170): A $100 bet would win $170, and your total payout would be $270.

How to Read British (Fractional) Odds

Example 1: Horse Racing in the UK

Imagine you’re betting on a horse race with the following odds:

• Horse A: 4/1
• Horse B: 2/1
• Horse C: 10/1

These odds mean the following:

• Horse A (4/1): For every $1 you wager, you’ll win $4 in profit, plus your initial stake. If you bet $100, you’ll win $400, plus your $100 back, for a total of $500.
• Horse B (2/1): A $100 bet would win you $200, and your total payout would be $300.
• Horse C (10/1): A $100 bet would return a $1,000 profit, and your total payout would be $1,100.

Example 2: Premier League Football

In a Premier League match between Manchester United and Liverpool, the odds might be:

• Manchester United: 6/5
• Liverpool: 4/7

Here’s what these odds mean:

• Manchester United (6/5): For every $5 wagered, you’d win $6 in profit. A $100 bet would win you $120 in profit, for a total payout of $220.
• Liverpool (4/7): A $7 wager would return $4 in profit. If you bet $100, you’d win about $57, giving you a total payout of $157.

How to Read European (Decimal) Odds

Example 1: UEFA Champions League Match

In a UEFA Champions League match between Real Madrid and Bayern Munich, the odds might be:

• Real Madrid: 2.40
• Bayern Munich: 1.70

Here’s what these decimal odds represent:

• Real Madrid (2.40): A $100 bet would return $240 ($100 stake + $140 profit).
• Bayern Munich (1.70): A $100 bet would return $170 ($100 stake + $70 profit).

Example 2: Formula 1 Race

Let’s say the odds for a Formula 1 race are as follows:

• Lewis Hamilton: 1.50
• Max Verstappen: 2.75
• Lewis Hamilton (1.50): If you wager $100, your total payout would be $150 ($100 stake + $50 profit).
• Max Verstappen (2.75): A $100 bet would return $275 ($100 stake + $175 profit).

Implied Probability in Betting Odds

Betting odds can be converted into implied probability, which is the bookmaker’s estimate of how likely an event is to happen. Implied probability is a crucial concept that helps you assess whether a bet has value.

American Odds to Implied Probability

For negative odds (favorites):

• Formula: Implied Probability = (-Odds) / (-Odds + 100)

For positive odds (underdogs):

• Formula: Implied Probability = 100 / (Odds + 100)

Fractional Odds to Implied Probability

• Formula: Implied Probability = (Denominator / (Numerator + Denominator))

Decimal Odds to Implied Probability

• Formula: Implied Probability = 1 / Decimal Odds

Example:

• American Odds: -200 (favorite) equates to an implied probability of 66.67%.
• Fractional Odds: 2/1 (underdog) equates to an implied probability of 33.33%.
• Decimal Odds: 1.50 (favorite) equates to an implied probability of 66.67%.

Understanding the Overground

Bookmakers build in a margin to ensure they make a profit, known as the overround. This means that the total implied probabilities of all possible outcomes often exceed 100%. For example, in a tennis match with odds of -120 for Player A and +100 for Player B, the total implied probability may be around 105%, meaning the extra 5% is the bookmaker’s edge.

Types of Bets and Their Odds

Over-Under Bets

In an over-under bet, you’re wagering on the total points scored by both teams in a game, rather than on the outcome. For example, in an NFL game, if the total is set at 47.5 points, you can bet on the final score being over or under that number.

• Example: If you bet on “Over 47.5” in a Patriots vs. Dolphins game and the final score is 27-24, the total points are 51, so you win the bet.

Parlay Bets

Parlays combine multiple bets into one wager. To win, all your selections must be correct. While parlays offer higher payouts, they also come with higher risk.

• Example: You place a parlay bet on the Packers, Warriors, and Red Sox to win. If all three teams win, you win the parlay. If one loses, the entire bet is lost.

Teaser Bets

Teasers allow you to adjust point spreads in your favour, but they offer lower payouts than regular parlays.

• Example: If the Packers are -7 and you’re worried they won’t cover, a teaser might let you shift the line to -4. However, the payout will be lower than a standard parlay.

Prop Bets

Prop (proposition) bets focus on specific outcomes within a game rather than the final score. Examples include betting on who will score the first touchdown in an NFL game or how many points a basketball player will score.

• Example: In an NBA game, you might bet on LeBron James to score over 28.5 points. If he scores 29 or more, you win.

What Do the + and – Mean in Sports Betting?

In American odds, the plus (+) and minus (-) symbols indicate whether a team or player is the favorite or the underdog. The minus sign represents the favorite, while the plus sign represents the underdog. The values also indicate how much you need to bet to win $100 (for favorites) or how much you can win with a $100 bet (for underdogs).

Example:

• Packers: -200: You must bet $200 to win $100.
• Patriots: +150: A $100 bet wins you $150.

Vegas Odds and How They Differ

Vegas odds, often synonymous with American odds, refer to the betting lines offered by sportsbooks in Las Vegas. While the format (Moneyline) is the same as other American odds, Vegas is known for setting industry standards. The odds can fluctuate based on the amount of money bet on either side of a matchup, reflecting the consensus view of the betting public.

How to Convert Between Odds Formats

Understanding how to convert between American, Fractional, and Decimal odds can help you navigate different betting platforms. Here’s a quick guide:

• American to Decimal: For positive American odds, divide the odds by 100 and add 1. For negative odds, divide 100 by the odds (without the negative sign) and add 1.
  Example:
  • +200 = (200 / 100) + 1 = 3.00
  • -150 = (100 / 150) + 1 = 1.67
• Fractional to Decimal: Divide the numerator by the denominator, then add 1.
  Example:
  • 5/2 = (5 / 2) + 1 = 3.50
• Decimal to American: If the decimal is greater than 2, subtract 1 and multiply by 100 to get positive odds. If the decimal is less than 2, subtract 1, divide 100 by the result, and apply a negative sign.
  Example:
  • 3.50 = (3.50 – 1) × 100 = +250
  • 1.50 = 100 / (1.50 – 1) = -200

Common Mistakes When Reading Odds

1. Misunderstanding the Format: A common mistake is assuming that American, Fractional, and Decimal odds are the same. Always double-check which format the odds are in before placing a bet.
2. Ignoring Implied Probability: Many bettors overlook the implied probability behind the odds. Calculating the implied probability can help you understand the true likelihood of an outcome and determine if the bet offers value.
3. Betting Based on Emotions: It’s easy to get caught up in supporting your favourite team, but successful betting requires making objective decisions based on odds and probability, not loyalty.

Final Thoughts

Understanding how sports betting odds work and how to read them is essential for making informed betting decisions. 

Whether you’re betting on the NFL, NBA, horse racing, or European football, knowing how to interpret American, British, and Decimal odds will give you an advantage. 

Always consider the implied probability behind the odds and assess whether the bet offers value. By mastering these skills and avoiding common mistakes, you can improve your chances of success in sports betting.