Sports Betting Odds Explained
Sports betting would be almost non-existent without betting odds. Odds are an integral part of the gambling industry, and a critical understanding of them is required to ensure that bettors are not only aware of what they are placing, but to also help guide their decision making.
What are sports betting odds?
Whenever you go to a casino or an online sportsbook’s landing page, the majority of what you first see are numbers underneath specified events. If you’re a seasoned bettor, you already know what those numbers represent.
However, if you’re new to sports betting, those numbers may confuse you. In the betting world, those numbers are the representations of the probability of different events and are referred to as betting odds, which form the crux of the industry.
How do the odds work in sports betting?
Simply put, betting odds define the likelihood of a certain event to happen, and that’s why they are represented in numbers.
A simple rule of thumb to keep in mind is this: the lower the odds an event has, the more likely it is to happen. This, however, isn’t a guarantee that lower-odd events will definitely happen, but just a measure of probability that bookies use to calculate odds.
Odds are also what determine how much a bettor will win when they place their money on a certain bet or event.
Therefore, if you had wagered $100 on the Lakers to beat a lowly-ranked team and cashed out $110 when they did, the profit of $10 was based on the odds of this match. Additionally, since such an event had a high probability of happening, the payout will be lower too; hence the meager $10 profit on such a bet.
What are the different betting odds formats?
Betting odds are usually represented in three main formats: American odds, fractional odds, and decimal odds.
The type of format used will depend on the sportsbook, the location of the sportsbook, and/or the main region that the sportsbook operates in.
Certain online sportsbooks give users the freedom to change to their desired odds format. However, it’s still important to understand how all three formats work to help in situations where you are forced to interact with either of them.
What are American odds?
The American odds format, as suggested by the name, is the main mode of displaying odds in the US. American odds are also known as moneyline odds or US odds.
These types of odds are displayed with a plus (+) or minus (-) sign in front of the numbers. The odds with the negative symbol usually signify the favored or more likely outcome and indicate the amount needed to win $100.
For example, if the Rams have odds of -310 to win their next match, you need to bet $310 to win $100, which will then give you a possible payout of $410 after the initial stake has been added.
On the other hand, odds with a positive sign show how much you’ll win if you bet $100. For example, if the Rams were the underdogs in their next match and instead had odds of +500, you would win $500 if you placed a stake of $100, which will then give you a possible payout of $600 after adding the initial stake.
What are fractional odds?
Fractional odds are most popularly used in the United Kingdom. From the name itself, these odds are represented in the form of fractions.
Though this method of odds representation can seem complicated, it’s simple once the basics are understood. Take, for example, a team that has odds of 1/3 to win a match.
In this scenario, for every three units staked, you will win one unit. So if you placed $3 on such a bet, the total payout will then be the amount won, $1, plus the original stake, giving you a total payout of $4.
The same would apply if the team had odds of 2/5, 4/11, 4/1, etc.
Fractional odds with a numerator (top number) that is smaller than the denominator (bottom number) imply a probability of greater than 50% and that the event is more likely to happen. Odds of 1/1 imply a 50/50 chance and are normally referred to as evens. Odds with greater numerators than denominators imply a probability of less than 50%.
Therefore, odds like 1/9, 1/8 will have lower payouts than odds like 5/1, 7/1, etc.
What are decimal odds?
Decimal odds, the most commonly used odds format in the rest of the world, are odds represented in decimals which are usually rounded off to two decimal places.
This format is widely used because of its ease in calculating payouts and has become the standard for many online bookies.
The decimal number shows the total payout, stake included, for every unit placed (i.e. odds of 1.40 mean that if you bet $1, you will receive a total payment of $1.40).
Calculating potential winnings using decimals is also easy. You just multiply the stake times the decimal to see how much you will win in total. For example, a $10 stake multiplied by odds of 1.70 will give a total payout of $17.
Odds of 1.01 are the lowest, implying a very likely probability. Odds of 2.00 imply a 50/50 win, while odds greater than 2.00 — such as 3.50, 4.80, and 9.80 — imply a harder likelihood of the event happening and will thus have larger payouts if the chosen bet happens to land.
Common types of sports bets and wagers
After understanding how sports betting odds work, the next crucial thing to note is the different types of bets, and how to calculate payouts. For this, we’ll be looking at the three most popular bet types.
This is the easiest and most common bet that is made in sportsbooks. It is simply betting on a specific team to win a game.
Take, for example, an NFL game between the Baltimore Ravens and the Buffalo Bills. The Ravens have odds of +150 to win the match and the Bills have odds of -120 to win it instead. If you placed $100 on the Ravens to win, you’d have a total payout of $250 if they won it. If you instead placed $100 on the Bills to win it, you’d have a total payout of $183.33 if the bills were the ones to win it.
Point spread betting
Point spread betting is employed to give even value between two different teams, and that’s why it’s also known as handicap betting.
Here, for the bet to win, a team has to win by a certain number of points or goals; or, alternatively, avoid losing by a specific number of goals or points. That’s why a common phrase that accompanies this type of bet is ‘covering the spread.’
Let’s take the Ravens and the Bills again with the spread looking like this:
- Baltimore Ravens +2.5
- Buffalo Bills -2.5
Since the Ravens are the underdogs, they are given a 2.5 point advantage coming into this game. Therefore, if you picked the Ravens in this point spread, they would need to avoid losing by 3 points for the bet to win. So even if they lost by just 2 points, you would still win the bet.
Alternatively, since the Bills are the favorites, they are given a handicap heading into the match. They will thus have to win by three points or more for the bet to win. So in such a scenario, a win of 51-48 would win the bet, while a score of 50-48 would mean that you lost the bet even though the Bills still won the match.
As a result, bets are only paid out if the team that you bet on manages to cover the spread.
Totals (over/under) betting
Over/under betting is another popular betting alternative. Here, the match result doesn’t matter but the points/goals totals matter instead; hence the name ‘totals betting.’
In this type of betting, you have to correctly predict whether the combined totals of the points in the match will be over or under the line set by the sportsbook.
Referencing basketball this time, let’s take a game with an over/under line of 224.5. If you placed an over in this match, you would win if the combined points of both teams are 225 and above (i.e. scores like 110-115, 120-110, 130-115, etc., would win you the bet because their combined totals are greater than the line set by the bookies).
However, if the combined points total is less than that line, you will end up losing that bet.
If you were to instead pick the under, combined points totaling 224 or below would win you the bet while anything above 224 would mean that you lose the bet.
How do I calculate betting odds payouts?
After you’ve decided on the type of bet that you wish to place, your next question may then be how you’re supposed to calculate your potential winnings.
Fortunately, a lot of online sportsbooks will calculate this for you. Depending on the sportsbook, all you need to do is click on the odds you wish to place and then type an amount in the pop-up box, which will then let you see your potential winnings.
However, it is still crucial to know the formulas employed in this calculation, which will in turn help you calculate your potential winnings on the go.
For American odds, you can calculate your payout by simply following one of the appropriate methods below:
In the case that you’re dealing with ‘-’ odds, divide 100 using those given odds, then multiply that with the amount you wish to place, and add your initial stake to get your total payout.
When dealing with ‘+’ odds, divide those odds by 100, then multiply the result with the stake you wish to place, and add your original stake to get your total payout.
So, say a team has odds of -130 and you wish to place a $10 wager, simply divide 100 by 130 (drop the minus symbol), which will then give you 0.77. Then multiply the stake with this number ($10 x 0.77), which will give you a profit of $7.7 and a total payout of $17.7 after the initial stake has been added back.
If that same team had odds of +200 instead, and you were still placing a $10 wager, simply divide 200 by 100, which will give you 2. Then multiply the stake with this number ($10 x 2), giving you a profit of $20 and a total payout of $30 after the initial stake has been added back.
Other popular types of sports bets
Apart from the above, here are other alternate bets that you can make.
Live (in game) betting
Live betting was the last decade’s biggest trend in online sports betting, and its popularity will only continue to grow especially with advances in technology. A large part of its growth was particularly due to the growth of betting from mobile phones, which gives users a convenience like no other since most people have their phones with them at all times.
Additionally, with the growth in popularity of mobile applications, most online sportsbooks now have applications of their own which ease the experience even more.
Live bets still consist of all the above-mentioned bet types, but with varied odds depending on how the game is progressing. For example, if the Lakers were the favorites before their game started with odds of -110 but started the game poorly, their odds will increase as the game progresses.
Or if an over/under line was set at 244.5 before the game started but the match has been a low-scoring affair, the line will continue to decrease as the game progresses.
Live bets also give bettors other options such as betting on halves and quarters. Since bettors are also following or watching the game, they can easily make calculated predictions depending on how the match is progressing. This gives customers a slight edge in online betting as opposed to pre-game betting.
Futures betting is making a bet on an event that will conclude in several days, weeks, or even months (i.e. the result will not be decided in the short term). Such examples are things like tournament winners in tennis tournaments, season winners in sports like European soccer, championship winners in sports like basketball, etc.
Futures bets extend to non-sporting events as well and are common in election years.
These bets are decided and paid out when the selected event has happened or after the end of the period that the selected event is scheduled.
Prop bets are also known as proposition bets. These are special bets that focus on the occurrence of other incidents that do not directly relate to the outcome of the match. Some examples of prop bets are how many strikes will a pitcher throw, how many cards will a certain player get, who will win the Super Bowl coin toss, or how many points will a player score.
Prop bets can be tied in to live bets as well and are common in NBA and European Soccer. These can be bets such as who is going to score next or which player will finish the match with the most rebounds; all of which will depend on the live progression of the game.
Parlays, known as multi bets or accumulators in other regions, are bets made up of two or more events on a single ticket. Parlays usually combine the odds of several events and thus give bettors increased winnings as opposed to betting on a single event. However, all of the events on the ticket have to be correct for the parlay to win.
A quick example of a parlay would be putting the Rams, the Patriots, and the Lakers to win in a joint ticket. If all of those teams end up winning, the bet will subsequently win. However, if one of them fails to win, the entire parlay is considered as a lost bet.
Progressive parlays are still similar to parlays but grant a slight margin of error with a reduced payout. They are usually made up of between four to 12 picks. Here, if one of the picks loses, the ticket won’t be considered a loss but will instead have a decreased payout should all the other bets land.
Teasers are similar to parlays, with the exception that bettors are allowed to alter the lines in their favor in teasers.
Take, for example, the Chiefs with a -5.5 spread, the Patriots with a -3.5 spread, and the Bills with a +5.5 spread. You can combine these three into a single ticket and alter the point spread in your favor to have something like the Chiefs with a -3.5 spread, the Patriots with a -2.5 spread, and the Bills with a +7.5 spread.
The tradeoff of this, however, will be that the payout will be less when compared to a traditional parlay. And, just like a parlay, all of the picks have to be correct for the ticket to win.
Odds boosts are promotions that sportsbook use to offer customers better and increased odds on certain wagers. These help to improve the payouts of events that would have otherwise had low payouts.
Odds boosts are normally given to newer customers or to entice older customers to log back on to the site.
The best scenario to take advantage of odds boosts is in events where the odds have been severely boosted, meaning that the initial risk has been lessened considerably.
These are some of the basics that you need to know before you dive into the world of sports betting. Such information may seem daunting to fully grasp and comprehend at first, but just like many other things in life, you’ll fully understand it as you continue to interact with other elements of the sports betting world.