Sports Betting Odds Explained
The number of sports bettors that have no clue how to understand odds surprises me. This is an exhaustive guide that will teach you how to understand betting lines, how to convert odds into an implied probability, how to calculate a no-vig line and much more.
Most Common Types of Betting Odds
- American Odds – Miami Heat (+110) vs. Los Angeles Clippers (-120)
- Decimal Odds – Miami Heat (2.10) vs. Los Angeles Clippers (1.83)
- Fraction Odds – Miami Heat (11/10) vs. Los Angeles Clippers (5/6)
The odds above equate to how much your return would be on a bet although they’re calculated differently.
Want to know how to calculate the potential profit on a bet?
American Odds (Favorite / Negative): Amount risked to win $100 (Ex: Clippers –120 = Bet $120 to win $100)
American Odds (Underdog / Positive): Amount won on a $100 bet (Ex: Heat +110 = Bet $100 to win $110)
Decimal Odds: Multiply the Odds X Bet Amount – Bet Amount (Ex: Heat 2.10 = 2.10 X $100 – $100 = $110)
Fraction Odds: The numerator equals your profit if your bet is equal to the denominator (Ex: Clippers 5/6 = Bet $6 to win $5)
The first step to understanding the betting markets better is being able to read the odds and figure out the potential profits based on the amount that you bet. Make sure you understand the calculations above before moving on to the next section.
How to Convert Odds to an Implied Probability
- American Odds (Minus) – Odds / (Odds + 100) x 100 = Implied Probability
- American Odds (Plus) – 100 / (Odds + 100) x 100 = Implied Improbability
- Decimal Odds – 1 / Odds = Implied Probability
- Fraction Odds – Denominator / (Denominator + Numerator) x 100 = Implied Probability
The formulas above will allow you to convert any odds into an implied probability. What does the implied probability tell you? It tells you how often a bet is expected to win based on the odds from the bookmaker and is important when handicapping potential bets.
Using the odds above the Clippers implied probability is 54.5% and the Heat’s implied probability is 47.6%.
If you added those percentages up already you may be wondering why the total equals 102.1% and not 100%?
The percentage over 100% is the bookmaker vig (commission) on this market, which in this case is 2.1%.
How to Convert Odds to a No-Vig Line
Taking away the bookmaker vig from the odds will give you a fair line. When calculating the no-vig line you should use Pinnacle odds, as they have the most efficient prices for numerous reasons although I won’t get into those in this guide.
Using the same odds as we have throughout this whole article, let’s take a look at how to remove the vig from this bet.
- Implied Probability / Overall Market Percentage = No-Vig Line
We take the Heat implied probability (47.6) and divide it by the overall market percentage (102.1), which equals 46.6%. You can do the same to the Clippers (54.5 / 102.1 = 53.4%). When you add up both percentages (46.6 + 53.4) you’ll notice they now equal 100%.
This means that the market thinks the fair line for Miami to win is 46.6% (+114) and 53.4% (-114) for the Clippers. You can utilize an online betting calculator to figure out what the fair line would be in American odds, but I’ve posted the calculations below as well.
Convert Implied Probability (Above 50%): (Implied Probability) / (100 – Implied Probability) x 100
Convert Implied Probability (Below 50%): ((100 – Implied Probability / (Implied Probability) x 100)
How to Calculate Expected Value (EV)
Calculating the expected value (EV) is simple and it will tell us how much money we expect to make on average per bet.
- EV Calculation – (Probability of Winning) x (Amount Won Per Bet) – (Probability of Losing) x (Amount Loss Per Bet)
Let’s use our example from above to explain how to calculate EV a bit better. If you wanted to calculate the EV on the Clippers you would calculate (0.545 x 100) – (0.476 x 120), which equals –2.62 and means that this bet has a –EV of $2.62 for every $120 staked.
Often when you can find a bet at better odds than the Pinny no-vig line the bet will be +EV. If the no-vig line on the Heat is +114 and a slow moving bookmaker is still offering +120 odds the bet is +EV and the more your bets are +EV the likelier you’ll win long term.
Using the Math Formulas Above to Your Advantage
The calculations above will help you identify value and how to determine market sentiment, but to make use of these numbers you have to apply your own numbers to games. By this I mean you need to determine the probability of a bet winning.
For example, if you study the stats and determine that the Clippers have a 60% chance of beating the Heat at home and the odds are –120 your EV would be (0.60 x 100) – (0.40 x 120) = +12. This means you’d win $12 on average per bet based on a $120 stake.
Of course, everything will rely on how sharp your numbers are. This is why handicappers spend countless hours crunching numbers and trying to build profitable systems. If your implied win probabilities are poor you’re going to be making poor betting decisions.
With all of the tools on the internet to make these calculations for you I wouldn’t expect you to make these calculations every time you place a bet. The goal of this article was to teach you how to understand odds and what they are telling you as a bettor.