Many people will first encounter betting in the form of friendly bets with friends and family. Normally in this situation a bet or wager is placed between two parties on a specified event with both parties agreeing to risk the same amount of money. An example of this can be the 2019 Champions League final between Tottenham and Liverpool. One of the parties could bet that Liverpool will win after 90 minutes, and the other party could bet that Liverpool will fail to win and as such have a bet for Tottenham or draw.
Odds are a betting term for the likelihood that something will occur. Decimal odds are nothing but the inverse of the probabilities for different outcomes.
Betting only at even odds (2.00, 1/1 or +100), would not be able to facilitate fair betting for Tottenham to win though. And what if Tottenham is not playing Liverpool in the Champions League, but Oxford United in the FA Cup instead? The parties could introduce a handicap to keep the wagering somewhat fair. However even using handicaps it is more or less impossible to keep the wagering attractive and fair for all involved parties, if all betting propositions needs to be priced up at even money. For most people it soon becomes apparent that the concept of wagering only at even money has severe limitations and that the introduction of different odds for different outcomes would better facilitate betting.
As it is obvious that betting odds will better facilitate betting than betting only at even money can, we will now move on to examine what exactly betting odds are.
Odds are a betting term for the likelihood that something will occur. Decimal odds are nothing but the inverse of the probabilities for different outcomes. To explain the concept of odds we will revert back to the imaginary FA Cup match at Tottenham Hotspur Stadium between Tottenham and Oxford United and two friends.
Two friends, Elizabeth and Jodie, are in the habit of making friendly wagers on different soccer matches that they watch together at the pub down the road. Elizabeth an avid Tottenham-fan feels certain that there is no way the Lilywhites will fail to win this match, but she is also afraid that once they are two goals ahead, they may lose interest in the match. Jodie however has noticed that several Premiership teams have been eliminated in the past few weeks by what on paper has been far inferior opposition. She fancies an upset but also feels that if the home side scores early the contest could easily become very lopsided. This makes Jodie interested in betting draw and away at a generous price, but uninterested in taking anything but a very large handicap at even money. In the past they have always agreed on betting propositions allowing them to make wagers at even money, however this time it proves impossible as they are unable to agree what the fair handicap for this match should be. Eventually Jodie suggests that instead of wagering their standard 10 pounds at even money, she can risk 1 pound to be paid 10 pounds if Tottenham fails to win. Elizabeth, feeling certain that he home team will win, agrees to this proposition.
The above example is a good illustration of odds. In the UK, fractional odds used to be completely dominant and are still very common. Fractional odds refer directly to the stake and potential payout in any bet, in other words to the money put up by both parties. In the above example Jodie is putting up 1 Pound to potentially win 10. Using the fractional odds format we would say that her odds are 10/1. The number in front of the slash indicates what the punter can win and the number after the slash indicates what he or she risks. As Elizabeth is risking 10 to potentially win 1, her fractional odds would be 1/10. This would be pronounced 10 to 1 on. In betting terminology “odds on” means that you are risking more than you potentially can win.
Even if fractional odds are still predominant on the British Isles, decimal odds have been getting more and more common through the last few decades. This is partly due to the rise of betting exchanges, like Matchbook and Betfair.
Elsewhere in Europe, decimal odds are and for a long time have been by far the most popular way of displaying odds. Decimal odds are also widely used in Australia, New Zealand and Canada. Decimal odds show how much you will be getting back, including profit and stake, if your bet wins. If you multiply your stake with the decimal odds you have calculated your potential payout. If you multiply your stake with your decimal odds – 1, you will have calculated your potential profit.
To use Jodie’s and Elizabeth’s wager as an example yet again, Elizabeth’s decimal odds is 1.1. This is because Jodie’s potential profit of 1 plus her stake of 10 divided by her stake of 10 equals 1.1.
(Potential Profit + Stake)/Stake = Decimal odds
(1 + 10)/10 = 1.1
Jodie’s decimal odds is 11. This is because her potential profit of 10 plus her stake of 1 divided by her stake of 1 equals 11.
(10 + 1)/1 = 11
Many people like the decimal odds format as they feel it is easier to work with. The fractional odds format uses a large variety of different fractions to display the various odds. This can be confusing for newbies not adept at calculating fast on the spot.
Another advantage of the decimal format is that the odds displayed are essentially just the inverse of the chance that something will happen. A 50% likelihood will translate into odds 2
100/50 = 2
A 33.33% chance will translate into odds 3
100/33.33 = 3
American odds are popular in the United States. The odds are expressed relative to a 100 unit base figure. If a minus is indicated in front of the odds, it means that this is the amount you need to wager to get a profit of 100 units. If there is a plus in front of the odds, it means that this is the amount you will win for every 100 units wagered.
Elizabeth’s wager of 10 Pounds equals 1000 pence. Her potential profit of 1 Pound equals 100 pence. This easy illustrates that her American odds is -1000 as she is wagering 1000 units to profit 100.
Jodie’s wager of 1 Pound or 100 pence can potentially win 10 Pounds or 1000 pence. As her wager of 100 units can profit 1000, her American odds are +1000.
It is important to understand that even if many different odds formats exists, the actual stake required to deliver a certain profit, does not change. The only thing which is changing is the presentation of the odds.
Most betting companies will allow you to choose which odds format will display their odds in their interface. Even so, we have added an odds converter in our tool section, allowing you to easily convert the odds between the most common formats.