The first time I heard about betting odds was in Rounders. You’ve probably seen the movie—Matt Damon plays poker and tries to outsmart the underground card sharks. I was a sophomore in college then and just thought it was cool. Now that I’m older and wiser, and make a weekly trip to Walmart for buying what seems like half the store, I actually understand betting odds. Let me tell you this: creating savings so you can send your little ones to college is hard.

So, betting odds. They tell you how much you can win and how likely it is to happen. There are just three main types and once you get the hang of them, you can make profitable bets (and add to your savings).

What Are Betting Odds?

Odds are the probability of something happening and importantly, how much you’ll win if it does. You could be betting on a football game, a basketball matchup, or even the Oscars (yes, people bet on those too), the odds guide you.

Depending on the place of betting, there are three main types:

  • Fractional Odds
  • Decimal Odds
  • American Odds

Here’s how each one works, and trust me, it’s not rocket science.

1. Fractional Odds

Fractional odds are popular in the UK and Ireland. They look like fractions, such as 5/1 or 2/3.

How They Work:

  • The first number (5) is how much you’ll win.
  • The second number (1) is how much you bet.

Example:

  • 5/1 means you’ll win $5 for every $1 you bet. A $10 bet would win $50 in profit.
  • 2/3 means you’ll win $2 for every $3 you bet.

They’re most common in horse racing and make it easy to see your potential profit.

2. Decimal Odds

Decimal odds are the easiest to understand and are widely used in Europe, Canada, and Australia. They’re shown as a single number, like 2.00 or 1.50.

How They Work:

The number tells you your total return for every $1 you bet, including your stake.

Example:

  • 00: A $10 bet returns $20 total ($10 profit + $10 stake).
  • 50: A $10 bet returns $15 total ($5 profit + $10 stake).

If you’re new to betting, this format is the simplest to calculate.

3. American Odds

American odds, also called moneyline odds, are the standard in the U.S. They use positive (+) or negative (-) numbers.

How They Work:

  • Positive Odds (+): Show how much you’ll win on a $100 bet.
  • Negative Odds (-): Show how much you need to bet to win $100.

Example:

  • +200: A $100 bet wins $200 in profit (total payout = $300).
  • -150: You’d need to bet $150 to win $100 (total payout = $250).

American odds are great for spotting favorites and underdogs at a glance.

Comparing the Formats

Here’s an example of the same bet in all three formats:

  • Fractional: 2/1
  • Decimal:00
  • American: +200

They all mean the same thing: a $10 bet wins $20 in profit and gives you $30 total.

How Are Betting Odds Calculated?

Sportsbooks calculate odds based on how likely they think something is to happen. They also include a small margin (called the vig) to make sure they profit.

Odds and Probability Formula

Probability=1Decimal Odds×100\text{Probability} = \frac{1}{\text{Decimal Odds}} \times 100Probability=Decimal Odds1​×100

Example:

Decimal odds of 2.50 mean a 40% chance of happening.
Probability=12.50×100=40%\text{Probability} = \frac{1}{2.50} \times 100 = 40\%Probability=2.501​×100=40%

What About Negative Odds?

Negative odds can seem tricky at first. They show how much you need to risk to win $100.

Example:

  • -150: You bet $150 to win $100.
  • Negative odds usually mean you’re betting on a favorite, so the risk is higher, but the win is more likely.

3 Tips To Read and Use Odds

  1. Learn the Formats: Knowing how to read fractional, decimal, and American odds helps you use any sportsbook.
  2. Look for Value: Compare odds at different sportsbooks to get the best payouts.
  3. Calculate Your Returns: Always know how much you stand to win before placing your bet.

Making Smarter Bets

Once you learn about betting odds, you can make a smarter decision by calculating the probability of the favourable outcome and how much you’ll win. But if you’re like me and want expert takes and strategies to your phone, try Bet Picks Pro.

You get a 14-day trial for free when you sign up. It’s risk-free, fuss-free, and stress-free. Make smarter bets, you’ve got this!