Understanding Sports Betting Odds

Sports betting has grown in popularity thanks to state-level legalization. This type of wagering was previously only available through legal casinos, underground bookies, or unregulated offshore sportsbooks.

Now, 38 states have legalized sports betting as of May 24, 2024. Some allow statewide online betting, while others have in-person sportsbooks that accept bets. Many allow both forms of gambling.

This new accessibility has made it easier to try your hand at sports betting. Whether you want to put a few dollars on your favorite team, add excitement to a major game, or test your betting system to find favorable odds, it’s important to understand how to read sports betting odds.

How Do Sports Betting Odds Work?

Sports betting odds reflect the chance that each possible outcome in a sporting event will happen. The chance that a football team with a poor record will beat an undefeated team is low. The odds reflect the unlikelihood of that outcome. However, to get people to bet on the underdog, sportsbooks will offer a higher payout. For instance, if you bet $100 on the bad team, you might have a chance to win $1,000 (+1000 moneyline odds).

However, if you bet on the favored team, your payout will be lower, reflecting the likelihood of a win. The moneyline odds might be -800, meaning you need to bet $800 to win $100. The more likely the outcome, the less you can win if your bet succeeds.

However, two evenly-matched opponents may offer similar payouts. Both may have odds of -110, meaning you have to bet $110 to win $100.

How Are Sports Betting Odds Presented?

You’ll see odds in three different formats. The previous example features American odds, but you may also see fractional and decimal odds. All three formats mean exactly the same thing, but you might favor one for making quick decisions or calculations.

American Odds

Moneyline odds, commonly known as American odds because of their popularity at American sportsbooks, use a baseline of $100 to calculate odds.

The odds are written with either a positive or negative sign in front of them. Here is what each means.

• A positive sign (+) indicates an underdog. The amount that follows the “+” is the amount you would win if you bet $100. For instance, if the odds were +200, you would win $200 if your team wins, and you would get your original $100 stake back. If you lose, you lose your $100.
• A negative sign (-) is for a favored team or competitor. The amount after the “-” is the amount you have to bet to win $100. For example, -400 means you have to bet $400 to win $100 (plus get your original stake back). However, if you lose, you lose all $400.

Occasionally, you might come across “even” odds. This means you receive $100 on a $100 winning bet.

Of course, you do not have to wager $100 for each moneyline bet. The ratio between the amount bet and the possible winning amount will remain the same regardless of how much you gamble. For instance, a $5 bet could potentially win you 5% of the moneyline odds.

Decimal Odds

Decimal odds are sometimes called European odds because of their popularity with bettors in Europe.

These odds represent your total payout for a bet, including your original stake. If you bet $1 at odds of 1.75, you would return your original stake plus win $0.75, for a total of $1.75. If you bet $1 at odds of 2.50, you’d win your original stake plus $1.50, for a total of $2.50.

For decimal odds, favorites are below 2.0 and underdogs are above 2.0. If the odds are exactly 2.0, it is the same as an “even” in moneyline odds.

If you are a novice, you may find decimal odds slightly more intuitive because you can simply multiply the odds by your stake to see how much you can potentially win on the bet.

Fractional Odds

Fractional odds are sometimes used in the U.K. and are sometimes called British odds. If you’ve ever watched horse racing, you have probably seen fractional odds.

In these odds, the top number is your potential payout and the bottom number is your stake. For instance, if the odds are 6/1, you could win $6 for every $1 bet.

If the fraction is greater than 1 (the numerator is bigger than the denominator), the bet is for an underdog. If it is less than one (the denominator is bigger), the odds are for the favorite. In a race or futures betting market (which team out of 32 will win the Super Bowl), the lowest number greater than 1 is the favorite.

Using Odds to Calculate Your Break-Even Percentage

The break-even percentage is the amount of times you have to be correct to earn a profit on each particular bet. The equation is simple: 1/odds. This equation gives you a percentage. You can then compare it to your own opinion of how likely your chosen outcome is. If you think it is more likely than the break-even percentage indicates, it’s a good bet (in your opinion). If the break-even percentage is higher than you think it should be, the odds are not in your favor.

You can convert the other odds types to decimal odds to simplify this equation. To do this, you divide fractional odds and add 1 to the dividend. For positive moneyline odds, the break-even equation is 100/(odds + 100), and for negative, it’s moneyline/(moneyline + 100). You do not include the negative symbol in the equation for negative moneyline bets.

Arbitrage: Using Sports Betting Odds to Your Advantage

Arbitrage is a risk management concept in finance. It involves exploiting inefficiencies in the market that guarantee a profit if you bet on every outcome. This strategy can apply to sports betting, as well.

Sports betting arbitrage opportunities occur when the combined odds add up to more than an even chance of a profit.

For instance, one team has decimal odds of 2.10 and the other has odds of 2.05. Betting $10 at 2.10 will lead to $11 in profit, while betting $10 at 2.05 will lead to $10.50 in profit. If you bet on both sides, you are guaranteed to lose $10, but you are also guaranteed to win more than $10. The winning bet minus the losing bet will be $1 or $0.50.

Arbitrage is rarely this simple and often requires sizing bets correctly to ensure a profit. However, with knowledge of the odds or help from arbitrage-spotting software, you can find such guaranteed-profit opportunities. Often, this will involve betting on two different sportsbooks with different odds for a game.

With an understanding of sports betting odds, you can enjoy casual betting or try to find opportunities with favorable odds or arbitrage to seek potential profits.