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How do betting odds work

super-administrator στÎčς September 27, 2022

We at Helpbet have often talked about how important value is in betting. Sports wagering is all about the betting odds. But how do they work? What do they represent, how do bookmakers set those odds, and what do you need to know before placing a bet? In this article, we will analyze everything you have to know about sports betting odds.

The first thing you need to know is that the odds represent the probability of an event happening. The bookmakers set the odds based on their estimation of the likelihood of an event occurring. For example, if they believe that the chances of a team winning are 50%, they will set the odds at 2.00 in decimal odds (not calculating the margin, which we will analyze later on). This 2.00 value comes from dividing 100 by 50 (the percentage of the likelihood of something being confirmed).

It might seem complicated at first, so let’s start from the top, as understanding how odds work is key in order to find value in sports betting.

Probability and odds

Probability is the likeliness of an event happening. We can calculate it by dividing the number of times an event has occurred by the total number of trials. For example, if we want to know the probability that a die will show a 4 when rolled, we would divide the number of times a 4 has been shown (1) by the total number of trials (6). Therefore, the probability of a 4 being shown on a die is 1/6 or 16.67%.

Odds, on the other hand, are what we use to place bets. They represent how much money we will win if our bet is successful. For example, if we bet $100 on a team with odds of 2.00 and they win, we will receive $200 in total (our $100 bet + our $100 winnings).

As we have seen, probability and odds are related but not the same. In fact, we can convert one into the other. To do so, we just have to use this simple formula:

Odds = 1 / Probability

For example, if the probability of a team winning is 50%, we know that the odds will be 2.00 (1/0.5). Similarly, if the probability of an event happening is 20%, we know that the odds will be 5.00 (1/0.2).

The odds of an event happening

Now that we know what odds are and how they work, it’s time to learn how bookmakers set them.

When a bookmaker sets the odds for an event, they do so based on their estimation of the probability of that event happening. In other words, they try to anticipate how likely it is that something will occur.

This estimation is based on different factors, such as statistics, the current form of the teams or athletes involved, weather conditions, etc. Once they have all this information, they try to establish how likely it is that a certain result will occur.

Of course, bookmakers are not always right in their estimations. Sometimes they may underestimate or overestimate the probability of something happening. That’s why it’s so important to be able to identify value bets: those bets in which the bookmaker has made a mistake in their estimation and, as a result, the odds offered are higher than they should be.

Betting odds

Vigorish and how does it affect odds sets

When we talk about odds, we must also mention the vigorish or margin. The vigorish is the percentage of each bet that bookmakers keep as a commission for offering their services. In other words, it’s the amount of money they make on each bet.

This margin is built into the odds offered by bookmakers. For example, if the probability of a team winning is 50%, we know that the odds will be 2.00 (1/0.5). However, these odds are not what we will find in the bookmakers’ offers. In reality, they will be lower because they must include the vigorish.

For example, if the vigorish is 5%, the odds offered by the bookmaker will be 1.90 instead of 2.00. Therefore, if we bet $100 on this team and they win, we will only receive $190 in total (our $100 bet + our $90 winnings). The other $10 are the profits made by the bookmaker through the vigorish.

As you can see, the vigorish affects the odds offered by bookmakers and, consequently, also our potential winnings. Therefore, it is very important that we take it into account when placing our bets.

Understanding payout odds

When we talk about betting odds, we must differentiate between two types: decimal odds and fractional odds.

Decimal odds are the most popular type, especially in Europe. They are very easy to understand and calculate because they represent exactly what we will receive if our bet is successful, including our initial stake. For example, if the decimal odds for a team to win are 2.50, it means that for each euro we bet we will receive 2.50 euros if they win. Therefore, if we bet $100 on this team and they win, we will receive a total of $250 ($100 x 2.50).

Fractional odds are used mainly in the United Kingdom. They may seem more complicated at first, but they are actually very easy to understand. These odds represent the ratio between what we will win and what we bet. For example, if the fractional odds for a team to win are 1/2, it means that for each euro we bet we will win one euro. Therefore, if we bet $100 on this team and they win, we will receive a total of $200 ($100 + $100).

As you can see, both types of odds have their advantages and disadvantages. It’s up to each bettor to decide which one they prefer.

The different types of betting odds

There are three main types of betting odds: American, decimal and fractional.

American odds are the most popular in the United States. They are very easy to understand because they represent how much money we will win or lose for each $100 we bet. For example, if the American odds for a team to win are +250, it means that for each $100 we bet we will win $250 if the team wins. On the other hand, if the American odds for a team to win are -250, it means that for each $250 we bet we will win $100 if the team wins.

Decimal odds are the most popular type, especially in Europe. They are very easy to understand and calculate because they represent exactly what we will receive if our bet is successful, including our initial stake. For example, if the decimal odds for a team to win are 2.50, it means that for each euro we bet we will receive 2.50 euros if they win. Therefore, if we bet $100 on this team and they win, we will receive a total of $250 ($100 x 2.50).

Fractional odds are used mainly in the United Kingdom. They may seem more complicated at first, but they are actually very easy to understand. These odds represent the ratio between what we will win and what we bet. For example, if the fractional odds for a team to win are 1/2, it means that for each euro we bet we will win one euro. Therefore, if we bet $100 on this team and they win, we will receive a total of $200 ($100 + $100).

As you can see, both types of odds have their advantages and disadvantages. It’s up to each bettor to decide which one they prefer.

How to calculate your potential winnings

Now that we know what betting odds are and how they work, it’s time to learn how to calculate our potential winnings. This is very easy to do and only takes a few seconds.

To calculate our potential winnings with decimal odds, we just have to multiply the amount of money we bet by the decimal odds. For example, if we bet $100 on a team with decimal odds of 2.50 and they win, we will receive a total of $250 ($100 x 2.50).

To calculate our potential winnings with fractional odds, we just have to divide the amount of money we bet by the fractional odds. For example, if we bet $100 on a team with fractional odds of 1/2 and they win, we will receive a total of $200 ($100 + $100).

As you can see, it’s very easy to calculate our potential winnings with both decimal and fractional odds.

What factors affect the odds for a particular bet

There are many factors that can affect the odds for a particular bet. Some of these factors include:

  • The team’s performance: This is probably the most important factor. If a team is playing well, they will be more likely to win and their odds will reflect this. On the other hand, if a team is playing poorly, their odds will be lower.
  • The team’s recent form: This is another important factor. If a team has won their last few games, they will be more likely to win again and their odds will reflect this. On the other hand, if a team has lost their last few games, their odds will be lower.
  • The team’s home/away form: Another important factor. If a team usually plays better at home, their odds will be higher when they are playing at home. On the other hand, if a team usually plays better away from home, their odds will be higher when they are playing away from home.
  • The team’s injury situation: This is also an important factor. If a team has several key players injured, their odds will be lower. On the other hand, if a team doesn’t have any injuries, their odds will be higher.
  • These are just some of the factors that can affect the odds for a particular bet. There are many other factors that can also affect the odds. It’s important to take all of these factors into account when placing a bet.
  • Odds can also be affected by external factors such as weather, referee decisions, etc. These factors are usually out of the control of the teams and can’t be predicted. For this reason, it’s important to be aware of them and take them into account when placing a bet.

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