Every player who bet on sports at least once knows about the existence of odds. However, few bettors understand the real mechanism for calculating odds used by bookmakers.
This article reveals the essence of betting odds - what they are, where they come from, why they are constantly changing, how bookmakers put their commission there, etc.
Betting odds are the probability of a certain event expressed in numerical form. Bookmakers calculate the probability of something happening based on statistics, history, and ultimately human opinion (their own opinions, other bookies' opinions, and public opinion). They set certain odds with the bookmaker's commission already included. The player can calculate the potential income and possible payout on a particular bet using the specified odds.
Most of the players around the world use European odds when wagering on sports. They are indicated as a decimal fraction. This type is simple enough to understand and calculate the potential profit. You just need to multiply the event odds by the bet amount.
All bookmakers set the margin put as odds commission. It is the margin that is the bookmakers' earnings, but not the players' losses.
There are several types of betting odds, each of which is based on a certain system of measures. The most popular in the gambling world are three types:
The majority of bookmakers offer their customers any type of odds to choose from. Almost all types of quotas have something in common, however, their differences are significant as well. Therefore, it is important to know the pros and cons of each type to choose the right one for yourself.
Most players across Europe and the former Soviet Union use the European odds, which are also known as decimal. In fact, this type of odds is popular all over the world because it is presented in almost all bookmakers. Moreover, some bookmakers use exclusively European odds.
The decimal odds appeared at the moment when bookmakers migrated with their business from Britain to Western Europe (the first country was France). European players found the UK odds quite complicated, so the bookmakers had to come up with more understandable odds for their customers. As a result, the decimal type has successfully taken root and is now used as the main one in the world.
Calculating the possible winnings and potential payouts at the European odds is fairly straightforward. You just need to multiply the bet amount by the odds used: $100 x 1.75 = $175 of the potential payout. Therefore, the possible winnings would be: $175 (potential payout) – $100 (initial bet) = $75.
The UK is rightfully considered the pioneer of the gambling business, so it is not surprising that they have their own type of betting odds. Nowadays, UK or fractional odds are pretty popular, however only in British bookmakers.
Fractional odds have a fairly familiar marking for the British. It is indicated in fractional format, for instance, 2/5. This record displays the ratio of the amount of possible profit to the size of the bet. In this particular case, if you bet $5, you get a $2 win.
Many newbies ask the question “how to calculate the British odds?", but there is nothing complicated here. Fractional odds can be converted to decimal by dividing the potential winnings by the potential bet and adding one. In our example, we get: 2/5 = (2/5) + 1 = 1.4
The US bookmakers most often use their own type of odds, which is called American. This type of odds calculation appeared almost immediately after the US became an independent country, and all local gambling shops quickly switched to its use. However, these quotas are quite complex to understand, so they are rarely used outside the United States.
American odds are divided into two types:
This value allows you to understand which side is the favorite in the match. The bet on the favorite is indicated as “-135”, and on the outsider - “+135”. Let's consider some examples with positive and negative odds.
Positive odds value equals the sum of the potential net winnings for a $ 100 bet. Our example “+135” means that the player will be able to get $135 in profit on a $100 bet.
It is quite easy to convert the American odds to decimal: just divide the odds value by 100 and add one. In our case, it would turn out: (135/100) + 1 = 2,35
Negative odds value corresponds to the amount of the bet that should be placed to get a potential net win of $100. In our case, the player has to bet $135 to get $100 in net profit.
It is also easy to convert negative American odds to a decimal form: divide 100 by the odds value without a minus, and then add one. In this case, we’d get: (100/135) + 1 = 1,74.