Betting odds are as fundamental to sports betting as the bookmakers and the sporting events themselves. Without them, any form of betting would not exist.
In this post, we are going to explain a number of important things to note about odds. Starting with what sports betting odds are, how sports betting odds work, the different types of betting odds formats and how you can convert odds from one format to the other.
We will also look at how you can read betting odds and help contextualise them, how you can ensure you get the best betting odds so that whatever type of bet you place, you know you are getting the best value on offer for your bet.
By the end of this piece, hopefully, you will understand betting odds considerably better than before, so you are confident using them with your bookmaker and on betting exchanges.
Let’s begin though with a simple, but obvious question: –
What are Betting Odds and What do They Tell us?
Betting odds are simply a method that bookmakers use to describe how much chance of winning a particular bet has. Betting odds work by showing punters the implied probability of an event occurring.
When odds are calculated, the bookmaker is assessing how probable it one of the events is likely to happen. For example, in a football match, when it comes to the Full Time Result market, only three outcomes are possible. A Home Team Win, an Away Team Win or a Draw.
Using their algorithm (more on that later), you will find that most bookmakers software will work out the probability of each of those three outcomes happening and then they will take the implied probability of each of the three outcomes and convert them into betting odds.
So, odds tell you how much chance there is of one of the possible outcomes happening based on implied probability. Although of course, this is not an exact science.
You can also convert odds back to the implied probability of an event, for example odds of even money mean that according to the bookmaker there is around a 50% chance of that outcome being the winner.
However, odds of 3/1, mean that there is only a 25% chance of that event occurring. This is how you use odds to calculate the probability of an outcome occurring. It’s called reading the odds.
When betting odds are explained in this way, many people are surprised at what the implied probability suggests is the percentage chance of winning that even short-priced favourites have.
What are the Different Betting Odds Formats?
Odds can come in a variety of different formats. However, there is an equivalence between each format which means that whatever format is used to state the odds, it means the same in terms of how much you will get back for your betting stake.
The three main types of betting odds formats used by bookmakers around the world today, complete with an example of how the odds are notated, are outlined below:
- Fractional Odds – 100/30 or 100-30
This is the more traditional odds format that has been used for many years, notably in the UK but also in many other countries around the world. These odds are displayed as fractions.
- Decimal Odds – 5.75 or 11.00
Decimal odds were developed in Europe to make calculating sports betting winnings easier, especially when fractional odds were more complex (such as 13/8 or 100/30 or 15/4).
These odds are displayed as a decimal.
- American Odds – +275 or -145
As the name suggests, American odds are used widely across North America for sports betting. They use a series of positive odds or negative odds (numbers) to show how much you could win or need to wager to win $100.
Sometimes, these types of odds are also referred to as moneyline odds but they are more commonly known as American Odds.
Other odds, such as Hong Kong odds, may be available with a small number of bookmakers, but generally these formats tend to be used in the Far Eastern markets.
- Odds Equivalence
As odds are displaying the implied probability of a particular event occurring, there is an equivalence between the three.
That means that for every price you can find in Fractional Odds or Decimal Odds or American Odds, you can find the same price in the other two formats.
For example, let’s take odds of 2/1 as an example.
- Fractional Odds – 2/1
- Decimal Odds – 3.00
- American Odds – +200
However, there are also equivalents for more complicated odds. Let’s use 13/8 as an example here.
- Fractional Odds – 13/8
- Decimal Odds – 2.63
- American Odds – +163
You can use an online odds calculator to convert fractional odds to decimals, decimal and fractional odds to American odds and vice versa. Some calculators may even offer options to convert into less commonly used formats. Others will also show the implied probability of the odds too.
However, if you are simply looking to work out how much you could win from a bet then you may not want to convert decimal odds as they are the simplest to work out how much you could win.
How Can I Work Out My Potential Returns Using the 3 Most Common Betting Odds Formats?
Now that we know what odds mean, let’s start using them practically in a situation where you want to know the potential winnings you have on a bet.
For this we are going to use three equivalent odds (4/1) to show you how to understand and calculate odds and what the calculation is for each format of odds in common usage today.
Fractional Odds Calculation
To work out your returns for a simple fractional calculation, such as 4/1, it is easy.
The first number in the fraction (4) refers to the amount you could win for your unit stake (1). This is the case for every fractional odds calculation but it gets more complicated when the unit stake is not one (such as when it is 13/8 or similar).
In this example, let’s say the unit stake is £50.
With fractional odds (x/y), the calculation to discover what you could win is (x*y)+y.
Now let’s substitute actual odds figures into the calculation. Your odds are 4/1 and your unit stake is £50. So we now substitute the Unit Stake we placed into the equation as follows:
(x*y)+y with the figures inserted is (4 x £50) + £50. Which then works out, once the brackets have been resolved as £200 + £50 = £250 potential total return.
You can see the bracket parts (£200) refers to the profit you make on the bet, whereas the non-bracket part of the equation simply returns your betting stake to you (£50)
For more complicated Fractional odds, such as 100/30, 5/8, 9/4, many people use a bet calculator to translate the fraction into a decimal odds which makes the calculation a lot easier as we will show you below.
Decimal Odds Calculation
Decimal odds are the easiest to use to calculate the potential total return on any bet as the equation used is simply decimal odds x stake.
So in a simple example odds of 2.50 x £100, would return £250 (£150 profit, £100 stake return).
The same calculation is used even for more complicated odds for example 7.69 x £40 = £307.60 (£267.60 in winnings, £40 stake returned).
This is why decimal odds are ideal for beginners as all you need is a calculator to work out how much you stand to win on any bet.
American Odds Calculation
American odds are slightly different because there are two types of odds, positive numbers and negative numbers and how you work out the potential returns for your bet is different for each.
With positive numbers, such as +270 or +600, the number indicates how much you would make in profit for a theoretical bet of $100. So a $100 bet at American odds of +270, would see you win $270 in profit (plus you’d bet your $100 back too for a total return of $370).
Odds are scalable, so if you placed a $10 bet at odds of +270, then your bet would see you return $27 in profit, plus your $10 stake back.
With negative odds, the number indicated shows how much you would need to bet in order to make a profit of $100 on that bet. So odds of -154 means you would need to bet $154 to win $100 (for a total return of $254).
Again, the bet is scalable, so if you bet $10 at odds of -154, then you would win $15.40 as profit, plus get your $10 stake back for a total return of $25.40.
Many people now use bet calculators to work out their returns for the different odds formats. These are often available at bookmakers sites, or on standalone bet calculator sites.
How do Bookmakers Decide Their Odds?
Bookmakers now use complex mathematical processes called Algorithms to work out the odds for the vast majority, if not all of their betting markets.
Software, including AI software, has been honed to take into consideration a massive range of data points and factors to come up with a range of prices across a typical sporting event.
Many bookmakers still employ one or more people to oversee this process and they may make small adjustments to the odds to make their book balance, or to offer customers a special deal on a selection or similar.
The aim of the bookmaker is to open a book on a market that not only entices punters to bet, but which also will guarantee them at least a small profit (or at least not risk too heavy a loss), regardless of which of the outcomes occurs.
The advances in AI, computing power and processing speed mean it is now possible for bookmakers to offer odds on markets within a fraction of a second, or to update markets in real time (which is what happens in In Play betting).
Why Do Odds Either Increase in Value (Lengthen) or Decrease in Value (Shorten)?
The process of making odds begins with setting the odds via the process outlined above. But what happens to them depends upon how much money is bet on the different outcomes for a betting market.
This is the essence of how sports betting odds work, and it is the case regardless of the type of bet.
When a selection in a market is backed, the bookmaker will adjust the odds on that selection to a lower price. This is called shortening the odds or the odds are said to “come in”.
Conversely, if a selection is not attracting as much money as the others, or is attracting very little money, then the bookmaker may increase the value of the odds on that selection. This is known as the odds lengthening or “drifting out”.
How Can I Get the Best Value Odds on My Bets More Often?
The easiest way to get best value on any bet you make is to do two things: –
- Open multiple betting accounts with reliable, trustworthy providers.
- Use an odds comparison site to compare the odds available for the bet you want to make.
The reason for this is simply that despite bookmakers’ odds being similar for most markets, sometimes when individual bookmakers calculate odds, they will offer different prices.
And when online betting, you can take advantage of these differences to make sure you get the best price on offer.
For example, if you wanted to back France to win FIFA World Cup in 2026, you may find that the French are 5/1 to win the World Cup with most bookmakers, but they may also be available at odds of 7/1 with another.
So, why would you want to take the 5/1 price, when you can get 7/1? If you were to bet £10 on that outcome, you would gain £20 more in returns at the price of 7/1, compared to 5/1.
Over time, you can increase your returns markedly by betting with different bookmakers to ensure you get the best odds possible on a market.
That pretty much concludes our guide to how betting odds work, so let’s finish with a look at some of the more frequently asked questions from punters seeking to understand odds better!
Frequently asked questions
What is the easiest betting odds format for beginners to use?
The simplest format for novice punters to use when they start betting is probably European decimal odds.
There is a good reason for this and that is with decimal odds, you just multiply the odds by your stake to give you your potential total return for the bet.
For example, a £10 bet on a selection of decimal odds of 4.66 would see you win £46.60. £36.60 in winnings and your £10 stake back.
Customers in some parts of the world, notably the UK, may be more used to seeing fractional odds used, as they tend to predominate across the UK. Other odds systems are used more commonly in other parts of the world too.
Most bookmakers allow you to switch between fractional and decimal odds. Some even have other options such as American odds and Hong Kong odds to select from too.
How do I know I am getting the best value odds for my bet selection?
The easiest way to get the best value odds for your chosen bet is to use an odds comparison site.
These sites will compare the odds for a vast range of markets from a wide number of sports to show you which bookmaker is offering the best price for that particular bet.
The list of bookmakers on these sites is not exhaustive, but there are many included on the best sites and this is the quickest and most effective way to ensure you get the best price for your bet.
However, you will of course need to have multiple betting accounts, certainly with the best betting sites to take full advantage of the best odds when betting on sports.
What does “odds-on” mean?
Odds-on is a phrase that simply implies that the chosen market will pay out less than double the amount of your stake if it is a winner.
Essentially it is any price that is below even money (2.00). Such as 1/2 (1.50) or 2/5 (1.40).
In racing, an odds-on selection’s odds are often stated as “6 to 4 on” for odds of 4/6.
What is Tic-tac (tick-tack) and how does it relate to betting odds?
Tic-tac is a method used ostensibly by bookmakers at horse racing meetings in the UK to communicate the value of odds of horses between them.
It is not commonly used nowadays, as most bookmakers’ odds are computerised, but it uses a series of gestures of the hands and arms to signify the odds of certain runners in the race.
The aim being for bookmakers to try and unify their odds, especially when a big bet has been placed.
The signalling system used a series of arm movements, gestures and phrases such as crossing your arms palm down over your chest to signify odds of 100/30 (the term used for this is Burlington Bertie).
