How are odds calculated?

odds

How likely is it that Liverpool will win the Champions League in the 2021/2022 season? 

betting odds

That’s what bookmakers calculate when they come up with the quotes, also known as odds.

Quotations are numerical representations of how likely a particular event is to occur. In our example, Liverpool have a good chance of reaching the quarter-finals, making them one of the contenders. Bayern Munich remain favourites to win their second Champions League in three seasons. To compare quotes, go to the odds comparison section of our betting site.

Quotations are useful if you are not familiar with the sporting event in question. If you don’t know much about American football, for example, you can use the bookies’ odds to determine who you should bet on to win the Superbowl. 

Of course, bookmakers want to make a profit too. They employ experts who study the odds for each individual sporting event. A difficult job in the case of live betting, for example, where the odds are constantly changing. Bookmakers therefore add a profit margin to ensure that they make money on the prices offered.

For example, they may give more odds on ‘heads’ than ‘tails’ in a toss. The odds of heads or tails are 50/50. If the odds offered are more than 100%, then the extra amount is their profit margin.

Of course, bookmakers cannot always be right. There may be times when the odds given are higher than you think they should be. This is also known as a ‘value bet’.

What kind of odds are there?

betting site

There is no one set way to calculate odds. The two main ways are the fractal and the decimal. Fractal odds have been around the longest. An example is 2/1. The second number is the stake you make ( $1) while the first number represents the amount you win on a successful bet. A bet of  $1 becomes  $2 if you win. Only in the case of a so-called free bet could this be different.

Decimal quotations are written as 3.0. This means that in the event of a successful bet, you will be refunded three times your stake. In that case,  $1 becomes  $3.

It may be that a particular selection has so much chance of winning that it becomes an ‘odds on’ quotation. In such cases, in the fractal form, the second number will be higher than the first. For example, 1/2 means that a bet of  $2 will yield only  $1. With decimal odds, an ‘odds-on’ selection has a number less than 2.0. Example: 1/2 in fractal odds is represented in decimal form as 1.5. Each  $1 you wager will then yield 50 cents.

There are also American odds that can be used. Here the ‘+’ and ‘-‘ signs are important. If a selection has a quote of +200, it means that a bet of $100 will yield a profit of $200. The equivalent of 2/1 (fractal) and 3.0 (decimal). A rating of -120 means you need to put $120 on your selection to win $100.

When you join an online bookmaker, you will be able to choose between the different types of odds. Our advice is simply to choose the form that you prefer and that you understand best. Understanding odds is very important. Hopefully this article has helped you understand how they work in practice.

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