How Do Betting Odds Work? This is What You Need to Know

Whether you are new to betting or you're a seasoned veteran, knowing how betting odds work and understanding probabilities are essential to successful betting. At first, it might seem a bit confusing, but with some help from this guide, you'll know everything there is to know about betting.

So how do settings odds work? Well, let's get started!

How Do Betting Odds Work?

When looking at betting odds, they're going to tell how likely an event might play out and how much money you can total profit. That's why understanding those odds before you place your bets is so important. Now it might seem overwhelming at first, but understanding what betting odds mean is simple when they're broken down!

There are 3 mains types of betting odds to cover over; Fractional, Decimal, and American.

We're going to start with Fractional odds.

Fractional Odds

Also referred to as British odds, Fractional odds are traditional odds and are often used when betting on horse racing. This is important when looking at the Kentucky Derby betting odds.

These types of odds are written using a slash (/) or a hyphen (-) and announced as five to one. For example, 5/1 or 5-1.

When looking at a bet listed as 5/1, with this listing, if you were to bet on it, it would mean you are going to win $5 on every $1 you wager (and of course receiving your dollar back as well).

So if you were to stake $10 on the odds of a 5/1 bet, you would win $50 profit in addition to your $10 stake, making the total winnings of $60.

Here is a simple equation too look at when trying to look at your possible profit

[Stake x (Numerator/Denominator)] + Stake = Total Return

Pretty simple right? Now let's move onto European odds.

Decimal Odds

Odds normally used in Europe and Australia, decimal odds are even easier to understand. When talking about decimal odds, the number represents the total return, rather than the profit like fractional odds.

For example; When looking at the odds of 4.00, the numbers represent the amount you could win for every $1 you bet. So if you were to place $100 on the odds of 4.00, you would win $400 (Unlike fractional odds though, this includes your initial bet, so your net profit would be $300).

The equation for decimal odds is

Stake x Decimal Odd Number = Total Return

Now the final type of odds to cover is the American standard type of betting.

American Odds

Used throughout the U.S., American odds are known as moneyline odds. The moneyline odds are broken into 2 types with either a minus sign for the favorite or a plus sign for the underdog.

When placing a bet on the favorite, the line shows you how much you will need to stake in order to win $100

For the underdog, the line shows you how much you will win for every $100 you bet.

Here is a betting example,

Underdog +400

Favorite -600

If you were to bet on the underdog, you would need to risk $100 to win $400 (in addition to your initial $100 for a total profit of $500).

Rather if you bet on the favorite, you would need to bet a total of $600 to win $100.

Wrapping Up

Now you don't have to ask yourself "how do betting odds work?" and you can start looking at more detailed strategies and probabilities with betting.

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