Vegas Betting Odds Explained
Posted : admin On 7/31/2022Las Vegas Betting Lines at VegasInsider.com. Specializing in free sports picks, gambling handicappers, Internet sports betting odds and online sportsbooks. Calculating Winnings with American Odds. In order to win $100 on the Penguins (favorites), you’ll need to wager $130. If you wagered $100 on the Senators (underdogs), you’d be set to win $110. You can use the formula below to calculate the potential winnings for any value you wish to wager.
Many people start their betting journey with the same question. How do odds work? The answer to this question is incredibly important if you want to become a successful bettor, but it’s also only the start of a long journey. Read on to find out why all bettors need to know how odds work.
There is a conversation that all seasoned bettors will have had numerous times with friends and relatives who want a casual bet on a major sporting event. What are the odds on x? What do they mean? What will I win if I bet x amount?
The answer you give to these types of questions will vary depending on how much detail you want to go into, but they will centre around the same concept. Probability.
What do odds represent?
Bookmakers present their odds in decimals, fractions or an American format. They all look different but they all mean the same thing. All odds are a representation of the probability of something happening.
The fact that there are many different odds formats - American, Decimal and Fractional - illustrates the point that odds are simply a means to an end, i.e. offering betting. Bookmakers really deal in risk measured by probability.
Betting is about assessing the chance or probability of an event happening and bookmakers like Pinnacle use odds because it translates implied probability into a more usable form in order to offer betting.
Using implied probability in betting can also help you compare odds between bookmakers. However, if you consider betting to be just about odds, you're missing the bigger picture. To really expand your understanding of odds and betting, you must also understand how to calculate probability.
With a good understanding of how to calculate probability yourself and how it compares to the odds provided by the bookmaker, you can begin to make more informed decisions when it comes to what you should bet on, when you should bet and how much you should stake for the bets you make.
Basics of Betting How does betting work? - Episode 1
The basics of probability
Considering how we are faced with a problem to solve or an assessment of risk every single day of our lives, it is surprising how unfamiliar the average person is with being able to calculate probability.
How often do you think: “What are the chances of me making that train on time?” or “How likely is it to rain?”
We rarely attribute a numerical figure to answer these questions but we are still dealing with a question of probability.
Using implied probability to calculate a bookmaker’s margin is easy and very useful as few, if any, bookmakers publicly share it.
In the simplest of terms, probability is a scale running from 0 (where there is no chance of an event occurring) to 1 (a certain future event). The likelihood of all other potential outcomes fall somewhere in between those two end points of the probability spectrum.
A coin toss is a great way to explain how to calculate probability because we know the true probability for each outcome. The coin will definitely land on either heads or tails, which taken together provide us with the certain event. We now know this certain event has a probability of 1.
Of course as a bettor what you really want to know is the probability (or chance) of your chosen call, which we will say is heads. To do this there is a simple equation:
Favourable outcomes / all possible outcomes
If you are calling heads, then the favourable outcome will be heads. Therefore to get your probability value, you divide the favourable outcome (in this case there is one, heads) by the number of possible outcomes (this is two as it will either be heads or tails). This leaves us with a probability of 0.5.
In general people are more comfortable with percentages, so by multiplying the probability of your event (0.5 for heads) by 100 you can say that there is a 50% chance of the coin landing on heads, and you winning your bet.
How to calculate betting odds
Getting a handle on how to calculate probability yourself and converting it into odds is the first step in developing your own assessments of betting value.
Once you know how to calculate probability, turning that figure into odds is a straightforward process. Decimal odds are one of the three main formats used by bettors and bookmakers alike.
You can arrive at the Decimal odds value for your coin toss choice with the simple equation:
So the Decimal odds for a coin being heads is 1 (certainty) divided by the probability of it occurring which we know is 0.5, producing decimal odds of 2.0. At this point you can equally take odds and reverse engineer the implied probability with the inverse of the equation for turning probability into odds:
1/decimal odds = probability
Take your newly found knowledge and work out the implied probability for your coin toss with your friend and you'll see the aggregate implied probability of both outcomes in the coin toss is 100% - (0.5/1+0.5/1)*100 - no surprises as a certain event is 1 (100/100).
However, performing the same calculation for actual odds from your favourite bookmaker will produce a value greater than 100%. So what is happening here?
Calculating a bookmaker’s margin
In simple terms the odds don't reflect the true likelihood of the outcomes concerned with an event. The amount by which the implied probability diverges from 100% is the margin the bookmaker has added to that particular that market.
This is an essential piece of information for a value-seeking bettor as it highlights the true cost of placing a bet with a bookmaker. Using implied probability to calculate a bookmaker’s margin is easy and very useful as few, if any, bookmakers publicly share it.
While it is important you are able to use the above information to convert odds into probability and calculate a bookmaker’s margin, you don’t have to do it yourself for every single bet. If you want a quick way to calculate how much margin a bookmaker has applied to the odds, you can use Pinnacle’s Margin Calculator.
Using odds to calculate your payout
Calculating odds and probability opens up a new world for calculating value but you also want to know what your bet will payout if you win. For our coin toss example this requires a simple multiplication:
So if you bet €10 on heads with odds of 2.0 your return including stake is 2.0 x €10 which equals €20 (this includes your €10 stake + €10 profit).
- Read: Do you know how difficult betting is?
Being able to calculate probability and understand where odds actually come from is an essential part of evolving as a bettor because it enables you to calculate your own expected frequency for an event - starting to model your own odds - and then compare what you think will happen with what odds are available.
Where the two diverge you can potentially turn that edge in your favour, and generate profit, which is what a bettor should be focused on.
If you want to calculate the return and profit of your bet, Pinnacle's Bet Calculator will do the work for you.
Now that you know how to calculate betting odds, you can take advantage of Pinnacle's low margin odds or read more expert betting articles to help make more informed betting decisions.
This guide will help you understand how betting odds work.
There are 3 different kinds of betting odds; Fractional, Decimal and American. American odds are often called Moneyline odds.
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HOW DO DECIMAL BETTING ODDS WORK?
Decimal odds are the easiest type of odds to understand.
To calculate your winnings using decimal odds, simply multiply your [tooltip text=”stake” gravity=”n”]Your “Stake” is the amount of money you wish to bet[/tooltip] by the decimal number. For example…
If you placed a $10 bet at odds of 2.00, you would simply multiply 10 by 2.00 to calculate your return.
10 x 2.00 = 20.00 = $20 return from your $10 bet
How about placing a $15 bet at odds of 1.57?
15 x 1.57 = 23.55 = $23.55 return from your $15 bet
That was easy wasn’t it?
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HOW DO AMERICAN [MONEYLINE] ODDS WORK?
American odds are calculated based on how much money you have to bet in order to win $100. The odds are always accompanied by either a plus [+] or minus [-] symbol. The symbols determine whether you need to bet more than $100 (-) or less than $100 (+), to win $100.
This may sound confusing at first, but it’s really not that difficult!
Lets jump right into an example of how American odds work. Remember that American odds are all about how much money you have to bet, in order to win $100.
Imagine the odds looked like this for a particular fight…
Fighter A = -150
Fighter B = +200
When working with American odds, you need to remember that the minus [-] symbol always means that you will have to bet more than $100 to win $100. Minus [-] odds are considered the “favourite”. Odds with the plus [+] symbol are considered the “underdogs”.
If you take a look at the odds above, you can see that Fighter A is the favourite at -150. This means that in order to win $100, you would have to bet $150.
Fighter B on the other hands is a +200 underdog. This means that you would only have to bet $50 to win $100. Here are a couple more examples using more challenging odds…
Fighter A = -600
Fighter B = +1000
In this example Fighter A has odds of -600, which means that you would have to bet $500 to win $100. Fighter B on the other hand has odds of +1000, which means you’d only have to bet $10 to win $100.
Working with American odds will take some getting used to and it can be difficult to work out the exact amount of money you will win from your bets at first.
You can practice working with American betting odds by visiting Best Fight Odds and using an Odds Converter to calculate your returns.
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HOW DO FRACTIONAL BETTING ODDS WORK?
Fractional betting odds are favoured in the United Kingdom and Ireland and they’e the most popular type of odds used in Horse Racing. Although they may look confusing at first, they’re actually not that hard to work out. Lets jump right into looking at an example of how Fractional odds work…
If you wanted to bet $50 at odds of 6/4 six to four, this is how you would work it out:
First you have to add the numbers of the fraction together, in this case it would be 6 + 4 = 10. Then divide this number by the second number, in this case 4. 10 divide by 4 = 2.5. Then multiply this number by your stake. 2.5 x 50 = 125. Your return for a $50 bet at odds of 6/4 would be $125.
(6+4 = 10) 10 divided by 4 = 2.5
2.5 x 50(stake)= £125
Understanding Vegas Betting Odds
If you get stuck and you’d like some help calculating how betting odds work, please don’t hesitate to get in touch.