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Are you a bit confused when it comes to how betting odds work? No worries, we’ve got you covered with this guide, that explains what odds are and the purpose of these numbers. First of all, in order to understand what betting odds are, you must first gain an understanding of the concept of “chance“.
The odds tell you the chance of a specific outcome, at least from the betting site’s perspective. They are basically values that can be directly translated into percentages, which are also referred to as probability. It will always be the odds that are the foundation for your chance assessment, especially when it comes to finding value bets.
Let’s say that you roll a dice. A roll of the dice has a probability of 1 out of 6 for each outcome. The chance of the dice landing on one of the six numbers is equally big. In percentage terms, this means a 16.66% chance (or probability) that the dice will land on the number that you have chosen.
This is calculated simply by dividing 100 per cent with the 6 possible outcomes (100 / 6 = 16.66%).
Now, the bettingsites do not give you the probabilities in percentage, you could say that they translate into odds. These odds are presented in different ways around the world, and there are basically three types of odds, decimal, fractional, and money line odds, also called American odds.
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Again, odds are simply another way of expressing probability. Decimal odds, for example, are inverse probabilities, which is why they are so easy to use, as well as why they are so prevalent. They are also sometimes referred to as European betting odds. Instead of writing that an outcome has X% probability, X translates to a number, where 100 per cent is divided by the chance = decimal odds.
Let’s say that you estimate that the probability of Astralis winning a specific CS:GO match, is 40%, then the decimal odds will look like this:
100 / 40% = 2.50 in odds
Since decimal odds are based on percentage, you simply take 100 divided by the percentage that you believe reflects the chance of that outcome.
This means, that for every unit (amount) you bet on that outcome, you get 2.50 times your stake if you were to win. But mind that the amount that you in reality win, is not 2.50 times the stake, because your stake is included in the winnings.
Payback: €100 x 2.50 = €250
Actual winnings: €250 – €100 (the stake) = €150
Actual winnings in odds: 1.50 (100 x 1.50 = €150
So, you didn’t win 2.50 times your money, in reality, you won 1.50 times your money.
If you have a calculator lying around, you may have a 1/x button on it, and that’s also the mathematical formula that was just used. Try entering some decimal odds of your choice and then press the 1/x button. Then you end up with the implicit probability. If you press the 1/x button again then the probability is reverted into decimal odds.
Fractional betting odds are another way of showing odds and they are primarily used in the United Kingdom. These odds are basically just another mathematical way of also showing the probability of an outcome. To use the previous example with the decimal odds of 2.50, then fractional odds will express the probability as 6/4, 3/2 or 1.50/1. To win 1.50 units you must bet 1 unit in other words.
A common mistake is to assume that the decimal odds of 2.50 is translated to 2.5/1 but this is incorrect. Fractional odds calculate your profit rather than your total win or bet, which is why the actual bet (equal to 1) is displayed below the fractional line. Odds 3/2 reads as 3 to 2, which means that you must bet two units to win three units.
If this is very confusing for you, then it’s because you are not familiar with the mathematical purpose of fractions. That’s perfectly normal, you are not alone in the world when it comes to that. In all honesty, fractional odds are overcomplicated, just like inches compared to the metric scale.
So, to be able to understand the value of fractional odds, you need to understand the mathematical concept around fractional numbers.Fractional numbers are shown as A/B, where A is called the numerator and B is called the denominator.
For example, 4⁄5 is a fraction, and the line separating the numbers 4 and 5 is the fraction bar. The number above the fraction bar is the numerator, and the one below the fraction bar is the denominator. A numerator represents the number of parts out of the whole, the denominator, so: Numerator / Denominator.
To make it very easy to understand, you can compare it with dividing a pizza into slices. If you have a pizza, the whole pizza is the denominator, and if you cut it into x-slices, each slice of the pizza is a numerator.
You can convert fractional odds to decimal odds by dividing the two fractional numbers and then adding 1.
6 / 4 + 1 = 2.50
You can also put the numerator (the first number in the odds) and the denominator (the second number) together and then divide that with the denominator.
6 + 4 = 10 / 4 = 2.50).
This way of showing betting odds is not as popular as it used to be, and it’s even starting to fade away in the UK. This makes sense, since it is easier to calculate with decimal odds, especially when calculating the underlying probabilities. Again, it’s the same with the metric system, which is replacing the inch system in the UK, the US, and several other countries that are still using the outdated ad complex system.
Money line odds, also sometimes referred to as US odds, can be a bit more confusing than fractional odds.
First, they are either positive or negative. For example, -150 or +150. Basically, they show how much you must bet to make a profit of 100 dollars, or how much profit you can make if you bet 100 dollars.
Negative odds show you how much you must bet to make a profit of 100 dollars. If a team is represented with odds -150, that means you must bet 150 dollars to win 100 dollars. Here is an example of how to convert the negative US odds of -150 to the decimal equivalent.
Divide 100 with 150 and then add 1 = 1.67
Positive odds, on the other hand, show how much profit you will make if you bet 100 dollars. If a team is represented with odds +150, that means you get 150 dollars profit if you bet 100 dollars. This is how you convert the positive odds of +150 to the decimal equivalent.
Divide 150 with 100 and then add 1 = 2.50
As we have seen in this guide, betting odds show a probability or chance of an outcome occurring. Something that is a great help to understand is what is called implicit probability. It is this probability that the odds express. So how do we calculate implicit probability from decimal odds? It’s simple actually – just divide 100 with the decimal odds. Here is an example:
100 / 2.50 = 40%
Understanding how to calculate the implicit probability based on odds is important in the quest to identify value bets. A topic you can read about in our value betting guide.
Understanding betting odds is the key to success with your esports betting
Decimal odds are clearly the most popular way to show odds. But the format that makes the most sense to you is the one you should choose to work with. It is important to remember that betting odds reflect the chance/probability that an outcome will occur. Once you understand this, you are well on your way to more successful esports betting!