Jun 19, 2020 Constantly evolving, the variety of sports betting odds available today is more diverse than ever before. That said, standard wagering odds remain unchanged from their original format. Back to basics – fractional odds explained Fractional or British odds are one of the oldest types of odds, typically used by sportsbooks from the UK and Ireland. If you have ever visited online gambling sites in the UK, you already know that they usually list odds in a form of slashed or hyphenated numbers. Betting odds represent the probability of an event to happen and therefore enable you to work out how much money you will win if your bet wins. As an example, with odds of +400, for every $1 you bet, you will win $4. There is a 20% chance of this happening. Learn more about sports betting.

• Gambling Odds Explained
• Vegas Sports Betting Odds Explained
• Baseball Gambling Odds Explained
• Gambling Odds Explained

If you want to come out on top against the bookies it is vital that you understand the fundamentals. When it comes to sports betting there is nothing quite as fundamental as the odds that the bookies offer. Unfortunately, betting odds can prove very confusing. That’s especially true for people who are new to betting.

That’s where this article comes in. We’re going to explain exactly how betting odds work, how they are set and the differences in the ways they are displayed. After taking in all the information below, you will be much better equipped to set about making some profit.

What Do Betting Odds Represent?

At their most basic, betting odds tell you two things:

1. How much you stand to make should the selection win
2. The probability of the selection winning

Take this example. If you were looking through the weekend Premier League fixtures and saw a team had fractional odds of 2/1 (that’s decimal odds of 3.0) you would know that you stand to win £2 in profit from every £1 that you stake should the team win. You’d also know that the bookmaker who set the odds ranks the team’s chances of winning as one in every three times the game is played.

If you saw a team had fractional odds of 8/13, you’d know that for every £13 you stake, you will win £8 or profit and that if the game was played 21 times in total, the bookies think the team would win 13 times and fail to win eight times (what is known as the implied probability).

Working out an implied probability percentage from fractional odds is simple. You just divide the stake by the combined sum of the two numbers which make up the fractional odds. In the case of 2/1 the equation looks like this:

1 / (2+1) = 0.33 or 33%

For odds of 8/13 this is the equation:

13 / (8+13) = 0.62 or 62%

That’s how the maths works but when it comes to the actual odds that bookmakers set, it’s a little more complicated.

How Do Bookmakers Set Their Odds?

The basic business model of a sportsbook is fairly uncomplicated. Bookmakers set the odds and take bets on an event. When that event ends they pay out everyone who backed the winner and then keep the rest for themselves.

But, consider the following horse race.

As you can see, the combined implied probability of the selections above is 100%. From a bookmaker’s perspective that is a big problem. That’s because, presuming they’ve got the same amount of liability on each selection, they’d never make any money as they’d have to collect and payout the same amount.

So, the bookmakers will build something called an overround into their odds. Here’s a real example of a match odds market from a football match:

With an total implied probability of 101.7%, the bookmaker who set those odds is guaranteed to make a profit of 1.7% assuming that they have the same amount of liability on all three selections. Of course, it rarely works out that the bookies manage to spread their liability evenly but you need to know that when you look at a betting market you’re not simply looking at a reflection of how the bookies think the event will pan out. There’s much more going on behind the scenes.

Armed with this knowledge of how the bookmakers set their odds, you can concentrate on finding value. That is, finding a bet where you believe the odds (and therefore the implied probability) is too big. If the bookies think that a side has a 50% chance of winning but you think they’ve got a better chance than that, that’s value.

The Difference Between Decimal and Fractional Odds

You will have seen above that we’ve spoken about both fractional and decimal odds. They are just different ways of conveying the same information but they do add another layer of complexity.

All the major online bookmakers will shows their odds as both fractions and decimals so it’s important that you understand just what they are showing and how to switch between the two. Thankfully, it only requires simple maths.

To go from a fraction to a decimal is as easy as dividing out the fraction and adding one. Here’s how that looks for odds of 2/1:

(2/1) + 1 = 3.o

And using our second example from above, 8/13, it looks like this:

(8/13) + 1 = 1.62

If you want to go from decimal odds to fractional odds is similarly simple. You just minus one from the decimal odds, turn that number into a fraction and reduce it down to it’s simplest form.

Let’s take decimal odds of 4.5, this is the equation:

4.5 – 1 = 3.5
35/10 -> 7/2

If the decimal price is 1.25, you convert it into fractional odds like this:

1.25 – 1 = 0.25
25/100 -> 1/4

Here’s a list of some of the most common fractional odds and their decimal equivalents (for a more in-depth list click here).

Key Terminology

When reading betting advice or searching for a value bet on the bookies’ websites you’ll come across some key terms relating to betting odds. To round up our article on betting odds, we’ve covered the most widely used terms to ensure you don’t get confused in your search for winners.

Stake – The amount of money that you place (or wager) on a specific bet.

Price – The price of a bet is simply another way of referring to the odds. You can either say that a football team can be backed at odds of 2/1or that their price is 2/1.

Odds On & Odds Against – Two of the key terms that you’ll hear when it comes to betting odds are ‘odds on’ and ‘odds against’. These terms refer to whether a price is greater or lower than evens. Any price above evens is known as odds against, while anything below evens is odds on.

Short and Long Odds – If something is described as being short odds it means the price is low. A long odds shot will provide you with a bigger win but is much less likely to win.

The evolution of exchange betting has revolutionised market-making to such a degree that even the biggest bookmaker names no longer employ professional odds setters.

How did odds making start?

As touched on in our Brief History of Betting blog, the concept of calculating the likely chance of a winner in a horse race, and converting that into bookmaker odds, was devised by one Harry Ogden.

Operating on Newmarket Heath towards the end of the 18th century, Ogden was the first bookmaker to take betting beyond its strikingly crude roots. Most early bets were simply a way of settling an argument over whether a named event would come to pass or not.

Not only did Ogden begin the process of making a book, he also understood that he had to save a percentage of his takings for his own purse. In order to achieve this, he slightly adjusted prices in his favour. It worked: if somebody won a bet and got paid out at odds of 4/1 they were unlikely to complain, especially at this early stage, that they had not been paid at the true probability of 5/1.

So already, within Ogden’s lifetime we witnessed the evolution of a book featuring a range of prices as well as the concept of what is now known as an “overround”.

What is an overround book?

A perfect book, without factoring in a margin for the bookie, would mean the implied probability of all outcomes would add up to 100%. However, bookies use the concept of overround to stretch this probability greater than 100% – which then becomes their profit.

Here’s an overround example from a tennis match:

Now, have you ever considered why bookmakers like to encourage accumulators in sports like football where punters enjoy backing multiple selections in a single bet?

Well it’s simple: if a bookmaker has an overround of 105% on each of five football matches, a punter placing a bet in all five of those matches is betting against an overround 125% because the extra 5% is factored in each time.

The growth of betting and odds compiling

By the 1950s the big firms that covered the length and breadth of the country betting on horses and greyhounds were already employing odds-makers to help them compile what was known as the “tissue” for each race.

This was effectively the first show of prices. Bookmakers would certainly collude to some degree to check their assessments of the market were not wildly out of place but by and large they were happy to trust their instincts.

The prices were not static: they moved to respond to market forces after the first show was published on the boards.

What did a bookie do if he felt liabilities were in danger of getting too big on a particular horse? All he had to do was rub off the displayed price on his chalkboard and put up a less attractive price. He might then balance his book by pushing out the prices of less fancied runners.

The advent of legal betting shops

Gambling Odds Explained

The golden age of betting was triggered by the 1960 Betting and Gaming Act – a watershed development that allowed betting on racing and greyhounds to take place in licensed shops around the country.

For the first time, punters did not need to be physically at a racecourse or dog track to legally place a bet. There was still an incentive for big-time punters to go racing because if they were betting in shops they had to pay tax.

But bookmakers small and large had to be on the lookout to protect themselves against betting coups in what was now “open season” for big-stakes punters. If, for example, a group of individuals could target multiple betting shops at the same time soon before the start of a race it was hard in the pre-internet age to ensure the price was cut in time.

The Yellow Sam plot of 1975 was a perfect illustration of how a meticulously organised plot could evade the best attempts of the bookies to minimise their exposure.

The 1990s: Multiple sports, multiple platforms

When restrictions were lifted on football betting to unlock a wide range of markets on individual matches, horse racing’s dominance as a sports betting medium was challenged for the first time.

At the same time, firms were opening more and more shops, allowing telephone and online accounts while accessing more and more global television feeds.

This was the decade in which odds-compilers really earned their corn for bookies like Coral, Ladbrokes and William Hill – traditional names with presence on the high-street, at the courses and, bit by bit, on rudimentary web browsers too.

Sports traders and palps

If, for example, you were a graduate with a good degree in maths or economics and you also followed rugby union religiously you could be hired specifically to draw up rugby union markets for one of the big operators.

Vegas Sports Betting Odds Explained

With so much sport to bet on, and so many new avenues from which to glean useful information, this was also the time that “palps” (bookie slang for palpable errors) were at their most prevalent.

Shrewd punters could sometimes find out if an obscure tennis match or an overseas domestic football game had been rescheduled to an earlier time slot. If the bookies were unaware they could find themselves accepting a bet on an event that had already happened.

How exchanges changed the landscape

The arrival of Betfair into an increasingly cluttered market in 2000 proved a positive intervention in a number of ways, even if some small on-course bookmakers to this day rue the dawn of exchange betting.

Betfair had a huge USP: it was allowing markets to be set by individuals trading on its platforms hours and sometimes days in advance. The prices were not set by individual odds-makers using personal assessment.

Over the intervening 20 years, the exchanges have had their ups and downs but for bookmakers they provide two major positives which serve as some sort of compensation for draining them of the business they once did.

Baseball Gambling Odds Explained

Firstly, by using the wisdom of the crowd, exchanges establish robust markets relatively quickly meaning betting companies no longer need to invest so heavily in their own odds-makers.

Secondly, the exchanges provide an easy mechanism for bookmakers to lay off worrying liabilities and can even provide early warning of a potential betting coup attempt.

What is BetConnect’s role in the market?

BetConnect is a hybrid solution that combines many of the strengths of the Betfair model – it is, after all, a peer-to-peer exchange – alongside the reassurance of big bets being matched without restrictions.

Available prices quoted are based on real-time markets provided by a wide range of online bookmakers. The platform gives bettors reassurance that they are getting the best bookie prices while layers know where to head for matched betting opportunities.

BetConnect’s single biggest advantage is its ability to fuse three disparate groups of individuals:

Gambling Odds Explained

1. Professional punters who have grown frustrated by restrictions imposed on them by the bookies
2. Recreational players who enjoy backing and laying selections
3. The growing community of matched betting enthusiasts

If you think you’re ready to bet on horse racing or any other sport then sign up for a BetConnect account now. BetConnect is the only exchange that lets you back selections at bookie odds with no restrictions, and lay the selections of other account-holders commission-free. Not sure how it works? Read this simple guide.

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