How do Sports Betting Odds Work?
To the uninitiated, the world of sports betting has the potential to be a very confusing place. Every online sportsbook will offer odds on the outcome of a particular event and these are designed to reflect the probability of each individual outcome.
When it comes to UK Football for example, Tipsters and professional bettors will always take the football betting odds into consideration before recommending or placing a wager. Understanding how to unearth a value bet is absolutely essential to them making a consistent long-term profit and this is major factor in helping to make them a successful service.
In sports betting, the probability reflects the chances of a particular outcome. All online Sportsbook’s employ a team of traders who crunch the numbers in order to calculate the likelihood of each possible result. The odds are used to imply this. Gamblers will use these odds to work out whether or not they agree with the bookmaker’s assessment.
Each price will also be partly determined by the number of potential permutations. For example: A tennis match has just two potential outcomes (Player A or Player B) whereas the Grand National may produce one of forty different results.
How to Calculate Probability
In the UK, odds are displayed in fractional form (2/1) and it is a fairly simple process to calculate the probability of each outcome.
The two numbers are added together (2+1) and are divided by 1.
For example – 1 / (2+1) = 0.33. This indicates that there a 33% chance of this particular outcome.
This infers that if the match was played three times in a row, team A would win just one of those meetings. Bettors are subsequently tasked with deciding whether this is accurate assessment of this particular match-up.
Bettors will base their wagers on a number of aspects. Factoring in current form, historical head-to-heads and team news, gamblers must then decide whether the probability of an outcome matches the bookmaker’s odds.
If Team A are priced at 1/1 (Evens), this would indicate that they would be victorious in 50% of their meetings with the opposition. Bettors may disagree. If they believe that Team A are far better than the odds imply and would win around 75% of the time – this represents value.
It is also possible for some teams to be potentially overrated by online sportsbooks. A side may be priced up at 4/9 which indicates that they have a 69% chance of success. However, they may be facing in-form or much improved opposition and many bettors will opt to oppose them at such a short price. Professional gamblers will often map out potential outcomes and if they deem this match a 50/50 split, then odds of 4/9 would be deemed wholly inadequate.
Bookmakers will always factor in a ‘house edge’. Although a 50% chance should be displayed as Evens (1/1), this will not be the case with the majority of online sportsbooks. Events such as the toss at the beginning of the cricket match is a good example of a 50/50 outcome, however each possibility will typically be priced up at around 10/11. This is the only way that the bookmakers can ensure they make a profit on each market.
Calculating Your Winnings
Sports betting odds will also allow gamblers to calculate their returns. Some prices are easier than others – for example 4/1 (£4 profit for every £1 stakes). However, odds such as 17/2, 4/7, 19/20 and 12/5 aren’t quite as straightforward.
Although online bet calculators are rife, it is relatively simple to calculate your returns.
Odds of 9/4:
9 divided by 4 = 2.25
For every £1 you bet, you will get £2.25 in return (plus your stake)
Odds of 17/20:
17/20 = 0.85
For every £1 you bet, you will get 85p in return (plus your stake)
How to Use Odds Effectively
Although every gambler will have their own unique system for measuring the probability of an event, it simply comes down to whether a bookmaker has underestimated or overestimated the chances of a particular outcome.
Successful gambling is a case of understanding probability and being able to outsmart the bookmakers by taking advantage of potential oversights. If two teams played one another ten times and you believe that Team A would win on at least six occasions, then anything bigger than Evens (1/1) represents tremendous value.
However, it’s also important to avoid any potential traps and savvy gamblers will always look to avoid teams or players who have been priced up prohibitively as a result of their reputation or previous form.