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# How do Betting Odds Work: Odds Explained

If you are new to the world of sports betting or just betting in general, a better understanding of how betting odds work will be crucial to your enjoyment of this popular pastime. Essentially, betting odds can act as a good pointer to how likely a certain outcome is and what cash reward you can receive if it’s successful.

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Although betting odds might look daunting to begin with, this useful guide will explain some of the different formats for how sports betting odds are presented and how each of them work.

## Three different formats of sports odds

If you plan to start betting on sports, it is important to know about the three different formats for betting lines and how odds will be presented to you.

The three main formats used in the sports betting industry are fractional odds, commonly used in the UK, decimal side odds format, popular in Europe, Canada and Australia, and moneyline odds which are mainly used online sportsbooks in the United States.

They are all alternative ways to present the same types of odds but don’t hold any difference in terms of what you can expect to receive as a payout.

## How do Fractional Odds Work?

Fractional odds are a popular way to present odds in the UK and Ireland. Typically, they are presented using a slash (5/1) or a hyphen (5-2). A fractional odd of 5/1 (five-to-one) means you would win \$5 for every \$1 you stake and you would get your stake back too. So, that means your total return would be \$6.

Alternatively, if you staked \$10 at 5/1, you would win a profit of \$50 and get your \$10 stake back making your overall return \$60. To display this as a calculation it would be:

Total Return = (Stake x Numerator/Denominator) + Stake

Let’s look at an example of how a betting market using fractional odds might look and what information we can ascertain from it. These are the odds on the four teams who are most likely to win the NFL Finals:

• Buffalo Bills – 7/2
• Kansas City Chiefs – 6/1
• Philadelphia Eagles – 8/1
• Green Bay Packers – 17/2

We can quickly determine that the Buffalo Bills are favourites to win the NFL Finals, while the chances of the Chiefs, Eagles, or Packers winning it are longer or less likely. Here, the Bills odds are presented as 7/2, which means for every \$2 you stake you will win \$7 of profit, with an overall return of \$9. However, if you choose to stake original bet of just \$1, you will win \$3.50 profit with an overall total return of \$4.50.

If the bookmaker or sportsbook priced the Kansas City Chiefs at 6/1 and they go on to win the NFL Finals, you will get winnings of \$6 for every \$1 you stake, netting an overall return of \$7. But if you’re confident that the Chiefs will win it and decide to stake \$10, you can achieve a profit of \$60 and be rewarded with an overall return of how much profit \$70.

A win for the Philadelphia Eagles will gain you an \$8 profit for every \$1 you stake, returning you \$9, or if the Green Bay Packers win the NFL Finals at 17/2, you will win an \$8.50 profit for every \$1 stake you place with a total return of \$9.50.

## How do Decimal Odds Work?

Decimals are the most popular types of way to present odds in continental Europe, Australia, New Zealand, and Canada. The decimal odds number represents the amount you will calculate winnings for every \$1 staked, so you will be able to see the total payout you can achieve rather than the profit. Therefore, your stake is already included in the decimal number as opposed to fractional odds. To display this as a calculation it would be:

Total Return = Stake x Decimal Odd number

Let’s look at an example of how a betting market using decimal odds might look and what information we can establish from it. These are the odds on the three teams who are most likely to win the Major League Baseball (MLB) World Series:

• Los Angeles Dodgers – 4.00
• Houston Astros – 4.50
• New York Yankees – 5.50

Again, we can quickly see the point spread that the Los Angeles Dodgers are favourites to win the World Series, with the Astros and the Yankees at longer odds. If we were to place a \$1 wager on the Dodgers and they go on to win the series, you will receive a total return of \$4 which includes your stake. And, you can expect to receive \$4 for every \$1 wagered. So, if you bet \$10 you would win \$40 overall.

The same principle applies to wagers on the Houston Astros or the New York Yankees. For every \$1 staked on the Astros, you can expect to receive \$4.50 returned if they win the World Series. For the Yankees, you will get \$5.50 for every \$1 if they go on to win it.

As the stake is already priced into the decimal odds, many people find simple math on these odds better to follow and can calculate their potential winnings easier.

## How Moneyline (American) Odds Work?

Moneyline odds are mainly used in the United States and are presented in a very different way compared to fractional or decimal odds.

The odds for favourites are displayed with a minus sign (-) and show the amount of money you would need to stake to win \$100. Whereas the odds for the underdogs, those deemed less likely to win by the bookmaker or sportsbook, are displayed with a plus sign (+) and show the amount you would win for every \$100 staked.

The difference implied probability between the odds of the favourite and those of the underdog will widen as the implied probability of of the favourite winning increases. Whether you choose to bet on the favourite or the underdog, if you win, you will get your initial stake back.

Let’s look at an example of how a betting market using moneyline odds might look. These are the money line odds on two teams playing against each other in the NBA:

• Milwaukee Bucks -765
• Atlanta Hawks +580

The sportsbook or bookmaker, has presented us with odds for the Hawks to win the game at +580, meaning they are the underdog and are judged as having less chance of winning the game. It also means you will need to stake \$100 on the Hawks to win \$580 for a total return (including your initial stake) of \$680. You can of course wager less, so a \$1 stake would earn you a \$5.80 profit and a \$6.80 total return.

However, if you decide to bet on the favourite you would need to bet \$765 on the Milwaukee Bucks to win \$100. So, if the Bucks won, you’d receive \$100 profit, plus your \$765 stake rewarding you with a total return of \$865. Again, you can wager a smaller stake of \$7.65 to win a \$1 profit.

## How to Read Betting Odds?

Betting odds can be intimidating for beginners, but once you understand how they work, they become easier to read. Here are some steps to help you read betting odds:

• Determine the type of odds being used: fractional, decimal, or American (moneyline).
• Understand that odds represent the probability of an event happening.
• Know that negative odds indicate that the outcome is more likely to happen, while positive odds indicate that the outcome is less likely to happen.
• If the odds have a minus sign, that means you have to risk that amount to win \$100.
• If the odds have a plus sign, that means you'll win that amount of money if you win the wager.
• Look for the favourite and underdog in the odds. The favourite will have a negative number, while the underdog will have a positive number.
• If the odds are in fractional form, the numerator represents the amount you will win if you bet the denominator amount.
• If the odds are in decimal form, multiply the amount you want to bet by the decimal odds to determine your potential payout.

Keep in mind that odds can change over time, so it's important to stay up to date on the latest odds.

## Are Negative or Positive Odds Better?

The (–) and (+) presented next to the numbers on a sports betting moneyline indicates the prospective payout you can receive if your selection is successful and whether you are wagering on the favourite or the underdog.

Negative numbers beside your selection indicate that they are the favourite and also show you how much money you will need to stake to win \$100 profit.

A positive number beside your selection indicates that they are the underdog, with the negative number showing the amount of money you can win if you bet \$100 and your selection is successful.

## How to Convert Fractional to Decimal Odds

Most online bookmakers and sportsbooks will allow you to change your preference for how you would like your odds to be presented. However, if you wanted to convert fractional odds to decimal odds yourself, it is straightforward to do.

To calculate 4/1 (four-to-one) as a decimal, simply divide the number on the left by the number on the right, i.e. 4 ÷ 1 = 4 and add the 1, so the decimal odd would be displayed as 5.00. If the fractional odd was 13/2, divide 13 by 2 for 8.50, then plus 1 and the decimal odd would be 9.50.

Here are some other examples:

• 11/1: 11 ÷ 1 = 11, and 11 + 1 = 12.00
• 7/4: 7 ÷ 4 = 1.75, and 1.75 + 1 = 2.75
• 2/5: 2 ÷ 5 = 0.4 and 0.4 + 1 = 1.40

## Betting Odds FAQ

### Are the types of betting odds used based on the sport?

Generally, the types of betting odds used are based on world location rather than the sport. Fractional odds are used in the UK, with decimal odds used in Europe, Australia and Canada. Moneyline odds are used in the US.

### How do you convert betting odds?

To calculate fractional odds as decimal, simply divide the number on the left by the number on the right, i.e. 6 ÷ 1 = 6 and add the 1 stake, so the decimal odd would be displayed as 7.00.

### What does +/- mean in betting odds?

In sports betting, the plus (+) and minus (-) signs are used to indicate favourites and underdogs. If the odds have a minus, that means you have to wager that amount to win \$100. For example, if the odds are -150, you have to bet \$150 to win \$100. If the same odds also have a plus, that means you'll win that amount of money if you win the wager. For example, if the odds are +140, you'd get \$140 if you win.

### How do you read spread odds?

If you want to bet the favourite on the spread, it would mean that the favourite needs to win by at least the number of points in the spread for you to win the bet. If the favourite bet wins by fewer points, it is a loss. If the favourite wins by more points than the spread, it is a winning bet.

### Are higher odds better?

The answer to whether higher odds are better is not straightforward. Here are some factors to consider:

• Higher odds mean higher potential payout, but also lower likelihood of winning the bet.
• Lower odds mean lower potential payout, but also higher likelihood of winning the bet.

High odds are good for big bankrolls, risk-takers, and sharp punters who have some insight into a game beyond what the online sportsbook offers.

Betting on the underdog with higher odds is riskier than betting on a favourite with lower odds, but a higher risk means a higher potential reward.

### Can the odds change after I place my bet?

Yes, the odds can change after a bet has been placed. Here are some things to keep in mind:

• Odds change regularly throughout the week in the lead-up to an event.
• If the odds change just before you're about to place a bet on a certain betting market, you have the option to accept the change in odds before you place the bet.
• If the odds change after you place a bet, the bookmaker will alert you that the odds have changed as you were placing the bet, they'll tell you what the new line is, and ask whether you'd like to proceed with the same bet amount at the new odds.
• If you have selected the option "Accept All Odds Changes," you will not be asked to accept changes that occur during bet submission. This also means, however, that you will not be able to take advantage of any favourable odds changes.
• If you bet fixed odds, the moment you place your wager on any game, line, and odds, the bet will be locked in at those odds and the odds changing afterwards will not affect your bet.

### How do negative betting odds work?

Negative betting odds indicate the betting favourite, meaning that the outcome is more likely to happen. When you see a negative odds number with a minus (-) sign in front of it, it means you need to bet that amount to win \$100. For example, if the odds are -110, you need to bet \$110 to win \$100.