Sports betting odds: Everything you should know about understanding markets

Online sportsbooks aren’t the only place fans can access sports betting odds. If you watch any sporting event on television, you’ll see betting odds displayed or referenced frequently. Odds are often tied into game previews and pre-match analysis to give fans a deeper understanding of the upcoming event. So, understanding how sports betting odds work is vital during the continuous surge of online gambling.

Each game and sport has unique odds. While they’re displayed in various ways, all sports betting odds show the probability of a particular event manifesting and how much money you’d receive from a successful wager. However, odds can change at a moment’s notice to completely alter the expected value.

Before placing a bet on the NFL, MLB or NBA, fans should know the basics of sports betting odds. Learning how lines are set, presented and changed is imperative for successful online betting.

What Are Sports Betting Odds?

Every market on an online sportsbook has betting odds. Sports betting odds serve two essential functions for bettors. First, oddsmakers establish a “line” to show the implied probability of an outcome. Second, odds show how much money someone must wager to earn a specific profit.

In-house oddsmakers carefully craft sports betting odds. Sportsbooks have multiple goals when setting the odds, aiming to strike the ideal balance of accuracy, playability and profitability. Oddsmakers will utilize all data types and consult third-party organizations to set the correct odds on any sport.

While sportsbooks want to give customers the best odds, they also need to make money. Oddsmakers create a house edge for every bet, otherwise known as a “vig” (short for vigorish). The vig guarantees sportsbooks profit from any bet, even if an individual customer wins their wager. When deciding between multiple sportsbooks, bettors should opt for the odds with a lower vig, aka more potential winnings.

Different Types of Betting Odds

Sportsbooks present their betting odds in three common ways: American moneyline odds, British fractional odds and European decimal odds. Bettors will likely encounter each one at some point, so they should learn how to read and calculate these odds types.

American Odds (Moneyline)

Online sportsbooks in the United States typically apply American odds. Using $100 as a baseline, minus (-) odds are assigned to favorites and show how much money you must wager to win $100 in profit. Meanwhile, plus (+) odds are given to underdogs, expressing the profit you’d earn from a $100 bet.

The Falcons are 2.5-point favorites over the Steelers with -110 odds to cover the spread. Therefore, I’d need to wager $110 to make $100 in profit. The same rule applies to the Steelers covering the +2.5 spread since they also have -110 odds.

Plus (+) odds come into play for the moneyline prop, the market for choosing the outright winner of a game. Since the Falcons are favorites, they have -142 moneyline odds that pay $100 in profit after a successful $142 bet. However, if the Steelers (+120) pull off the upset, a $100 wager delivers $120 in cash profit.

While American moneyline odds are based on $100, bettors can place any amount on any market. For example, I can bet $20 on Pittsburgh’s +120 moneyline and get $24 in winnings.

British Odds (Fractional)

If you’ve ever heard someone say a team has “7-to-1” odds to win the championship, they’re using fractional betting odds. Instead of plus and minus signs, odds are displayed as fractions like 3/1, 5/2 or 9/4. Multiply your wager by the numerator (top number), then divide by the denominator (bottom number) to calculate your cash profit.

The defending champion Celtics are the favorites to win next season’s NBA championship. A $100 bet on Boston’s 3/1 odds means a repeat and nets me $300 in profit. If I put $50 on the new-look 76ers at 8/1, I’d qualify for $400 in cash winnings.

Fractional odds are easy to calculate when the denominator is one, so let’s apply the formula to the Knicks at 33/4, the equivalent of +825 in American odds. If I bet $30 on New York, I’d take 30 and multiply it by 33 to equal 990. Then, I’d divide 990 by four to give me $247.50 in potential profit. Including the original $30 stake marks a final return of $277.50 if the Knicks win the NBA Finals.

European Odds (Decimal)

Many overseas sportsbooks use decimal odds. These are displayed as one number, the amount a bettor will receive for every $1 wagered. A number between 1.0 and 2.0 gets assigned to the favorite, while anything above 2.0 goes to the underdog. A market with 2.0 odds is even money, +100 in American odds.

Chelsea hosts Manchester City to kick off its English Premier League campaign. The Blues have 3.85 decimal odds to win, meaning a $1 bet returns a total of $3.85: the original $1 wager and $2.85 in cash profit. If you bet on the 4.0 odds and the match ends in a draw, a $1 bet nets your stake back plus $3 in profit. Lastly, Man City’s sub-2.0 decimal odds (1.77) indicate they’re the favorite. Wagering $1 on City to win returns your dollar and $0.77 in cash winnings.

There are a couple of easy ways to translate decimal odds. First, multiply the odds by your wager to calculate the total return. For example, a $15 bet multiplied by Chelsea’s 3.85 odds comes to $57.75. You’d earn the $15 back plus $42.75 in profit.

To convert an underdog’s decimal odds to American, subtract one from a decimal of 2.0 or higher and multiply the new number by 100:

Chelsea: (3.85 – 1) x 100 = 285 American odds

If you’re converting a favorite’s decimal odds, take -100 and divide it by the new number:

Manchester City: -100 / (1.77 – 1) = -130 American odds (-129.87)

How Sports Betting Odds Change

Oddsmakers set lines as far in advance as possible. Given the days, weeks and months from the opening line until game time, it’s common for odds to dramatically shift from emerging data and information.

There are several primary reasons why sports betting odds change before or during an event:

Game-Related Information

The most common explanation for odds moving in any direction is info regarding a participating team or player. Lineup changes, injury reports and suspensions are among the factors oddsmakers consider before adjusting lines accordingly. If the Chiefs are a 2.5-point favorite over the Ravens, but Patrick Mahomes is suddenly ruled out with an injury, sportsbooks will recalculate the game’s probable outcome and set new odds.

Betting Handle

Two sides of a bet getting approximately 50% of the action is the ultimate goal for oddsmakers. However, big spenders or mispriced lines can lead to most of the money wagered, known as the “handle,” going toward one side. Sportsbooks don’t want to be on the losing end of a lopsided bet receiving 80% of the handle. Therefore, they’ll guide the line in the opposite direction to incentivize bettors to wager on the other side.

Live Betting

Most online sportsbooks offer in-game wagering. Once an event is in progress, the odds will shift according to the action. Score updates, possession changes, injuries, weather and many other factors force sportsbooks to continuously alter the betting odds.

Understanding Implied Probability

American, fractional and decimal odds don’t just show bettors how much money they’ll win. They are also integral in calculating the implied probability, the expected chances of an outcome occurring. Knowing the implied probability helps users consider a possible bet’s value or lack thereof.

Bettors can research implied odds calculators online. However, they can use simple formulas for each odds type:

American Odds to Implied Odds

Since American moneyline odds have positive and negative values, there are two calculations for implied probability. Let’s start with minus odds, like the Giants having -155 moneyline odds versus the Twins:

Minus American odds / (minus American odds + 100) x 100 = implied probability

155 / (155 + 100) x 100 = 60.8, meaning the Giants have a 60.8% implied probability to win.

Florida Atlantic is a +360 underdog vs. Michigan State in Week 0 of the college football season. To calculate FAU’s implied odds, use the formula for plus money bets:

100 / (plus American odds + 100) x 100 = implied probability

100 / (360 + 100) x 100 = 21.7, implying a 21.7% chance for FAU to win.

Fractional Odds to Implied Odds

Figuring out the implied probability from fractional odds is a little simpler. If the Browns have 6/1 odds to win the AFC North, this is how you’d calculate the chances of that hitting:

Denominator / (denominator + numerator) x 100 = implied probability

1 / (1 + 6) x 100 = 14.3% implied probability of Cleveland winning the AFC North.

Decimal Odds to Implied Odds

Bettors will have the easiest time of all converting decimal odds to implied odds. Here’s the formula to find the probability of Israel Adesanya (1.74) beating Dricus Du Plessis at UFC 305:

(1 / decimal odds) x 100 = implied probability

(1 / 1.74) x 100 = 57.4% implied probability for Adesanya to win.

Calculating Break-Even Percentage

Another way to assess sports betting odds is through a break-even percentage, the percentage a bet must win to break even. Take your wager, then divide it by the sum of your wager and the profit to calculate the break-even percentage.

The break-even rate is above 50% for minus American odds. That means consistently betting minus odds requires you to win more than 50% of the time to stay even or turn a profit. Plus-money odds have a sub-50% break-even rate, so winning less than half of your bets won’t necessarily put you in a hole.

For example, many NFL spread bets and over-unders start with -110 odds. If I plan to bet $20 on multiple NFL spreads with -110 odds, here’s how I’d get the break-even percentage:

Wager / (wager + profit) = break-even percentage

20 / (20 + 18.18) = 52.4%

The break-even percentage formula shows I’d have to win 52.4% of my $20 spread bets to avoid a loss. If I’m unsure I can win over half of those spread bets, I’d consider another market.

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