How to Understand Betting Odds
For people new to betting, one of the most complicated aspects of it is the ability to understand and feel comfortable with betting odds. One of the first lessons you should take as a new gambler is understanding how these work, it will save a lot of confusion in the future and also make you a more profitable gambler.
There is one key thing to remember here, which explains why betting odds are so popular.
Betting odds inform you how much money you will win from a bet. With so many bookmakers available, comparing odds is vital, if you know how to do this, you know where the best value is and you can make sure you take home the most profit from every bet you place.
How Probability and Betting Odds Work Together
When you place a bet, you are predicting that an outcome will be true. The bet has odds attached to it, and these odds are a reflection of the probability that selection has of winning, according to the bookmakers.
The betting odds on offer also show the probability of something happening, this is something else you can use yourself. For example, if a bet is priced up at 4/1, this gives the bet a 20% chance of winning. Punters often ignore the losing side of gambling, but it is important to understand this, so avoid being downhearted when placing losing bets. A 20% chance of winning means an 80% chance of losing, so when you are betting at odds of 4/1, you should expect to lose four times out of five.
Fractional odds such as 4/1 that we have mentioned above are the most common way in which bookmakers show their odds. However, you can also view the odds as decimals if you want to more about those later in this piece.
Calculating Probability Using Betting Odds
So, if you want to take the odds of a selection you are interested in betting on and find out the probability of that selection winning, here is how you do that.
4/1 is calculated as 1 / (4+1) = 0.20 – This means a 20% chance of being correct.
The sum of 4+1 is determined by the odds on offer, you add together both numbers which make up the odds, so if you were looking at a smaller fraction such as 13/8 then the addition would give you 21. This sum works for every fractional odd you will use, giving you the ability to quickly work out the chances of you winning, according to the bookmakers of course.
Calculating Winnings Using Betting Odds
There is a simple way to calculate winnings using the betting odds you have on your bet.
The number on the right of the odds is the amount you place, the number on the left of the odds is the amount the bookmaker will pay you.
For example, if you place a bet at 4/1, the odds show that you stake £1 to receive £4 back. You always get your stake back, so your total returns in this instance would be £5.
When looking at more complicated odds such as 13/8, you need to add a final calculation to the method if you want to find out your returns based on a stake of £1, rather than £8. In this example you stake £8 to win £13, so the total returns on the bet is £21. If you then divide this by the stake on your odds, in this instance 8, you will see the return based on £1 stakes, rather than £8.
Here is another example:
Odds of 6/4 mean £4 stake to win £6. To find this to a £1 stake, take the total returns which is £10 and divide by the stake you have placed, which is £4, this gives you a return of £2.50 per £1 staked.
Calculating Decimal Odds
Decimal odds are not used as commonly as fractional odds, although they are popular on betting exchanges. Calculating decimal odds is much easier for new gamblers, because with a decimal, everything is based around values to a £1 stake.
Using the example above, a calculation was needed to show that 6/4 offered a £2.50 return for a £1 stake, but the decimal odds of 6/4 is 2.50, so we are already there without a calculation.
The odds shown in decimal are the returns for a £1 stake, if you want more then you simple times the odds by the stake. If you placed a £4 bet at 2.50, you would do 2.5 x 4 which gives a return of £10.
The one thing to remember with decimal odds is that the returns always include your stake money, this is not added on top.
Which is Best: Decimal Odds or Fractional Odds?
The answer to this question is that neither is better than the other, and it all comes down to personal preference.
Fractional odds are the traditional odds used by many bookmakers, and when you log onto a site, these are the default setting for most, if not all, bookmakers. However, as younger people are beginning to bet more, we are seeing a rise in the number of people using decimal odds.
These are seen as much simpler to use for new players, who don’t have any knowledge or ties to the traditional methods like many older punters.
Those betting on horse racing will see that bookmakers at racecourses and odds that are displayed on TV are shown in fractions, this is a very big tradition in horse racing. If you intend to bet on this sport as a newcomer, it may be best for you to learn fractional odds.
For others though, you can choose how you want to learn and set your bookmaker setting to reflect this. When you have an account with a bookmaker you can change your own settings and give yourself the best possible experience. The key is to make things as easy for yourself as possible.
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