Understanding Betting Odds and Converting Them to Probability

C9bet Home / Blog

Emily Tan Saturday, September 30, 2017

One of the most overwhelming parts of getting into sports betting for the first time is that of understanding betting odds. If you are brand new to it, seeing all these 3/1 and 5/11 figures being bandied around might seem like a bit of a foreign language to you.

However, understanding these betting odds will give a fundamentally better chance of making the right bets at the right time. If you understand these odds, you not only get a better picture about how much value your stake has but also what these odds represent with regards to the match/game/sporting event that you are wagering on.

So What Are the Odds That Are Shown All About?

Okay, so let’s use a soccer match between Liverpool and Chelsea as an example. There are three outcomes that can happen from this match, Liverpool can win, Chelsea can win, or the match can be drawn. Odds will be given by the bookmaker on each of those outcomes with those odds representing the chances of each outcome being possible.

So a bookmaker may say that for the above, they are offering 4/6 for Liverpool to win, 11/4 for the result to be a draw, and 4/1 for Chelsea to win.

Understanding the Basics of Odds                     

Now you might look at those odds and think “OK, so what do they actually mean?” Well to make it easy for you, let’s break it down. Odds of 2/1 would mean that you will need to bet one unit (amount of money staked) to win back two units (x2 of your unit staked). If you saw odds of 4/1 it would mean that you have to bet one unit to win back four units.

If you see odds of 1/2 it would require you to bet two units to win one unit back. Odds like these are given when one particular team is considered almost a certainty to win or lose. The odds in all cases represent what is classed as your risk versus reward factor.

So of course, 4/1 is a bit of a long shot that will give you back 4x your money on top of your original stake, while 2/1 is the underdog that will allow you to double your money and 1/2 is almost guaranteed but will have you risking double what you can win on the bet.

Converting Odds into Probability

Now that you know what odds are, you can also use them to figure out the probability of the particular result happening. Using the same teams and odds as we did above, Liverpool at 4/6 to win actually converts to being given a 60% probability of winning.

The calculation for that is (4 + 6) / 6 x 100 = 60%

Using the same formula you can also discover that the probability of a draw is 26% and the probability of a win is 25%. Now you might be wondering how it can be possible that 60%, 26%, and 25% adds up to 111% rather than 100% and the simple answer is that is how the bookmakers gain an edge.

This 11% margin is worked into all bets in order to give them an advantage over their customers. This means that in the long run, the bookmaker will make an average of 11% on every bet placed with them. While this might seem fair, there would not be any bookmakers in business if they did not have some kind of edge.

They are a business after all and have to guarantee that they make enough money to stay in business. And let’s be fair, many of us would bemoan there not being any legal bookmakers out that we can do business with.

Understanding Possibility

Although sports results will come down to which team played the best on the day, had the most desire and determination and showed the most skill, in the eyes of a bookmaker, results come down to chance. They use probability to calculate chance and while a n outsider will sometimes ruined the party by upsetting the odds, generally the odds given by a bookmaker are about right.

In any sport a result can go against what is expected – which is exactly why we love sports in the first place. It would certainly be boring if we always knew who was going to win!

So if Liverpool has a 60% chance of winning in the eyes of a casino, which looks pretty good doesn’t it as you yourself also have a 60% chance of winning. However, you also have to consider that there is a 40% chance that Liverpool will not win and the match might be a draw or win for Chelsea instead. This makes it look a little less comfortable!

It is not far from being 50/50 when you look at it like that. However, if you were to decide to bet on Chelsea the odds are telling you that there is a 75% chance that they will lose in the eyes of the bookmakers. So if you place your bet there, although you will win better money from your bet, there is higher risk.

This is the sort of dilemma that you will face with every bet. Funnily enough, the bookies love it when teams draw simply because most people bet on either team to win. They get a massive payday whenever teams draw for that very reason.

Whichever bet that you do decide to go with, just make sure that you have done your research before placing it. Study the odds at various bookmakers to get the best deal and look into everything from the form of the teams, the injury status of the players, the history when the two teams have met before and anything else that you might discover a pattern in.

With a bit of time and effort you might just start to become profitable at this type of betting.