How do Sports Odds Work?

How to read sports odds

Table of contents

When it comes to betting on sports, the one factor that remains constant, no matter what you are betting on, is the odds. 

These betting odds can provide you with a wealth of information, and do so without many people realizing it.

With that, our guide will be focusing on breaking down the concept of betting odds. This will include different odds formats, types of odds, and how you can use the odds given to calculate implied probability.

Types of Odds Formats

When discussing betting odds, it is imperative to understand that there are three major types of odds formats, all of which can be converted from one another. These essentially convey the same message but are presented differently. 

American Odds

As the name suggests, American Odds are primarily used in the United States. American odds always appear as a number, regardless of what bet you are making or what sport you are betting on.

The standard odds for most point spread or total bets in the United States are -110. You can also use the following formulas to calculate what your profit would be given the odds of the bet you are making:

Positive American Odds: 

  • Profit = Bet Amount X Odds/100
  • Total Profit = Bet Amount + Profit

Negative American Odds:

  • Profit = Bet Amount X 100/Odds
  • Total Payout = Bet Amount + Profit

Decimal Odds

The second odds format is Decimal Odds. This format is primarily used across continental Europe, Australia, New Zealand, Asia, and Canada. The standard decimal odds are 1.91, which converts to -110 in American odds. 

A formula is also available with decimal odds to calculate your potential winnings:

  • Total Payout = Bet Amount X Decimal Odds
  • Profit = (Bet Amount X Decimal Odds) - Bet Amount

Fractional Odds

The final odds format is fractional odds. These are mainly used in the United Kingdom and for most Horse Racing bets. 

The standard fractional odds are 10/11, which converts to -110 in American Odds and 1.91 in Decimal Odds.

Using the following formula, you can calculate your profit using fractional odds:

  • Profit = Bet Amount X Numerator/Denominator
  • Total Payout = Bet Amount X Numerator/Denominator + Bet Amount

Favorites vs. Underdogs

Regardless of which odds format you are using, the two major types of odds are favorites and underdogs. Like with odds formats, favorites and underdogs will appear differently depending on which format you are using.

American Odds

With American odds, favorites are typically indicated by a minus sign “-“, while underdogs use a plus sign “+”.

For example:

  • Team A: -150
  • Team B: +125

In the example above, we know Team A is the favorite because its moneyline of -150 has a minus sign. In this example, Team B would be an underdog because the +125 has a plus sign attached to it.

There are, of course, cases in which none of the odds listed have a minus sign. These are typically future bets or some of the individual sports. 

An example of this would be when betting on a tournament winner in golf:

  • Golfer A: +750
  • Golfer B: +1400
  • Golfer C: +2200

In this example, none of the odds listed have a minus sign, but we know Golfer A is being regarded as the favorite because the odds are the lowest.

Decimal Odds

Instead of using plus or minus signs, a favorite in decimal odds is indicated by being less than 2.00. This means that for underdogs, they will be listed at more than 2.00.

For example:

  • Team A: 1.74
  • Team B: 2.40

In the above example, Team A is the favorite because 1.74 is less than 2.00, while Team B is the underdog at 2.40 because the odds are higher than 2.00.

Like in the American odds format, there are situations where the decimal odds will all be above 2.00. Using the same golfer example from before, it could look like the following:

  • Golfer A: 8.50
  • Golfer B: 15.00
  • Golfer C: 23.00

Once again, none of the decimal odds are below 2.00 to indicate a favorite, but in this case, we know Golfer A is the favorite because their decimal odds are the ones closest to 2.00.

Fractional Odds

Given that this odds format is fractions, a favorite is determined by the denominator being more than the numerator, while an underdog is indicated by the numerator being more than the denominator.

An example of this would be the following:

  • Team A: 2/3
  • Team B: 6/5

From this example, Team A is the favorite because in the fraction 2/3, the denominator, 3, is greater than the numerator, 2. Conversely, Team B is an underdog because in their odds of 6/5, the numerator, 6, is greater than 5, the denominator.

The same concept applies to fractional odds, where there might not be a favorite. This could look like the following:

  • Golfer A: 15/2
  • Golfer B: 14/1
  • Golfer C: 22/1

While none of the fractions here indicated a traditional favorite, Golfer A would be the favorite in this event because the odds are the closest to 1/1.

Calculating Implied Probability

Another thing betting odds can tell us is the implied probability. Using the following formulas for the different odds formats, we can calculate this: 

Positive American Odds:

100/(Odds +100) x 100

Negative American Odds:

 Odds/(Odds + 100) x 100

Decimal Odds:

1/Decimal Odds

Fractional Odds:

Denominator/(Numerator + Denominator)

Implied probability is handy for money line bets where the odds are vastly different. This implied probability can tell you the percent chance your bet has of winning.

Conclusion

When it comes to betting odds, the best advice is to pick the format you are most comfortable with. Use the formulas for this format or a betting calculator to determine your potential profit ahead of time, and the implied probability to help determine your chances of winning, so you are making worthwhile bets.

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