Betting isn’t as easy as it seems. There are many ways to calculate odds, but three ways used the most. The US bookies use “American Odds” or “Moneyline Odds”, whereas in Europe and Canada fractional odds and decimal odds are the preferred method. At first glance this may seem complicated, but with a little professional insight you will be able to learn how to convert the two systems and become a confident bettor.
American VS Decimal Odds
Fractional odds are preferred by most bookmakers in Great Britain and Ireland. They are written as mathematical fractions such as 2/5 4/5 etc.
The odds can make or break your stake. For example, if you place a $20 bet that your team is going to win 20/1, and they win, you will get $400. 20/1 stands for $20 for each $1 you bet.
Decimal odds are also referred to as continental odds. This is the preferred system in Europe and Canada. It is also generally considered the most popular method. The odds are written as, you guessed it, decimal points. The odds 1.885 for your team to win with a $100 stake will give you a return of $188.50.
The decimal odds’ formula is simple: your odds multiplied by your stake, are equal potential winnings.
American odds aren’t the same as fractional odds or decimal odds. Some say it’s the most difficult method to use, but with a few easy tips and tricks the method becomes just as easy.
In American odds, the default stake is $100. The odds are written in positive or negative. For example: 180 would mean you need a $180 stake to make $100 profit. +210 would mean you make $210 profit for a $100 stake.
Just remember that the negative (-) sign signifies the team which is most likely to win. The plus sign signifies the team that is the least likely to win. To help you remember which is which, think of the plus as a plus for supporting the underdog team, and negative for going with the sure thing.
Odds do not changed depending on the odds system used.
For example, say fractional odds are at 1/100, European odds are written as 1.01, and Moneyline or American odds at -10000. You will still have a 1% net return.
Calculating The Probability of the Odds
Just knowing what the odds are isn’t enough. You have to calculate the outcome of the probability of the odds. True odds is when you calculate the the outcome of the probability of odds. This is when you calculate the probability of your odds with the basic odds with the bookie’s advantage. This gives you a percentage allowing you to analyse whether or not the odds are in your favour, and if so, by how much.
To calculate the probability of fractional odds, use a conversion formula which divides the denominator by the denominator + numerator.
With 5/2 odds, your formula would look like this:
2 /(5 + 2) to give an implied probability of 2/7 which you can divide to get a decimal solution of 0.286, and times 100 for 28.6% odds.
Decimal odds are calculated by dividing 1 by the decimal odds. If your odds are 1.65, you divide 1/1.65 to get the probability, which in this case is 0.606, then you add 100, and you’ll get a probability of 60.6%.
American odds are not as tricky as they first seem. For positive odds, you simply use the formula of 100 /(odds + 100). If your odds are +180, the calculation is 100 / (180 + 100) which gives you 100 / 280 or 0.357. Multiply that by 100, and the result is 35.7%.
Negative American odds start with – odds/-odds + 100. If your odds are 120 you take that number and convert it into an equation like this: (- (-120) / ((- (-120)) + 100). To solve the equation calculate this 120 / (120 + 100) and after solving the equation 120 / 220 = 0.545 multiplied by 100 and get 54.5%. It takes practice, but you most likely only need to have one of the true odds down!
Calculate Your Winnings
Fractional odds look at the amount gained over the original wager. So, 4/1 bets mean your stake is $4 and you get $1 return if you win.
Decimal odds are always equal to or greater than 1. The decimal will never have more than 2 or 3 decimal places. The formula for these odds is gross profit = quantity stake x odds and net income = gross profit – number bet.
A $20 bet with 1.3 odds becomes 20 x 1.3 when you calculate the winnings, this gives you $26 gross in bet winnings. Subtract that from your original $20 bet. Your net income is now $6. See, it’s not too difficult!
The the US systems net profit calculation is the same as the method used when calculating odds. A fee greater than or equal to 2, is positive. The fee indicates the net gain achieved, betting 100 units. So, if the fee is +150 this means that for a $100 bet, your win $150.
If your fee is a negative number, it is less than 2 and has a negative sign. In this situation, the fee shows the risk to make a profit of 100 units or dollars. If the fee is -300, then you will win $100 for each $300 you wager.
Converting the Odds
If you want to convert your probability into decimal odds, remember this quick formula: Decimal odds = 100 / implied probability. A 75% probability means that your equation is 100 / 75 = 1.33.
To convert fractional odds, start with: fractional odds = (100/implied probability) – 1. Start with a 25% probability (for example), (100 / 25) – 1 = 4 – 1 = 3. This means that your odds are 3 to 1.
American odds work a little differently, because there are positive and negative odds. If the probability is above 50%, American Odds = (implied probability/100-implied probability) x 100. Break it down: 75% odds in the formula are – (75 / (100 – 75) x 100 = -(75 / 25) x 100 = -3 x 100 = -300 is your odd for the American positive odds system.
In the negative American odds system, the probability needs to be less than 50%. You use the formula for American odds = (100 – implied probability / implied probability) x 100. At 25% odds, ((100 – probability) / (probability x 100) = ((75) / (25) x 100 = 3 x 100 and you get +300 odds.