Understanding odds – A beginner’s guide to online gambling

 

For newcomers, online betting seems complex and intimidating. The crucial concept to grasp is understanding odds – the numerical expressions that indicate the likelihood of different outcomes and determine potential payouts. An event’s odds are a measure of its probability. Gambling odds serve two purposes:

  • Reflecting the likelihood of different outcomes
  • To determine how much money you can win from a successful bet

Odds are expressed in different formats, including:

  1. Decimal odds

Decimal odds are considered the simplest format to understand, especially for beginners. The number represents the total amount you’ll receive for every unit wagered, including your original stake. If the odds are 2.50 and you bet $10:

Potential payout = Stake x Odds

$25 = $10 x 2.50

Your profit would be $15 ($25 payout minus your $10 stake).

To calculate implied probability, divide 1 by the decimal odds:

Implied probability = 1 / Decimal odds

40% = 1 / 2.50

  1. Fractional odds

Fractional odds are expressed as fractions, like 3/1. The first number represents potential profit, while the second number is the stake required to win that profit.

For a 3/1 bet with a $10 stake:

Potential profit = (Stake x Numerator) / Denominator

$30 = ($10 x 3) / 1

Your total payout would be $40 ($30 profit plus $10 stake).

To calculate the implied probability:

Implied probability = Denominator / (Numerator + Denominator)

25% = 1 / (3 + 1)

  1. American odds
  • Positive odds (e.g. +150) show how much profit you’d make on a $100 bet. So +150 means a $100 bet yields $150 profit (plus your $100 stake back).
  • Negative odds (e.g., 200) indicate how much you need to bet to make a $100 profit. With -200 odds, you’d need to wager $200 to win $100 profit.

For implied probability:

Positive odds: 100 / (Odds + 100)

40% = 100 / (150 + 100)

Negative odds: |Odds| / (|Odds| + 100)

66.67% = 200 / (200 + 100)

Understanding the value

Now that we’ve covered the basics of odds formats let’s discuss a crucial concept in gambling: value. Finding value is the key to long-term betting success. Value exists when the probability of an outcome is greater than the odds suggest. For example, if you believe there’s a 50% chance of winning, but the odds suggest only a 40% chance, there’s positive expected value in that bet. To calculate expected value:

EV = (Probability of Winning x Amount Won per Bet) – (Probability of Losing x Amount Lost per Bet)

If the EV is positive, the bet has value. However, remember that short-term results vary significantly due to variance.

Common bet types

With a grasp of odds, let’s look at some common types of bets you’ll encounter in online gambling:

  1. Moneyline – A straight bet on which team or player will win.
  2. Point Spread – A bet on the margin of victory, with odds typically set at -110 on both sides.
  3. Over/under (Totals) – Betting on whether the combined score will be over or under a specified number.
  4. Parlays – Combining multiple bets into one for a higher potential payout, but all selections must win.
  5. Prop bets – Wagers on specific events within a game, like the first goal scorer or the number of corners in soccer.
  6. Futures – Long-term bets on outcomes like championship winners, often available at higher odds. Check my responseto learn more information.

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