How Do Odds Work?
It's important to know how odds work and how to read sports betting lines, as online sportsbooks will display odds differently, based on the sport and location you're betting on.
Our betting odds calculator is free to use and presents the different types of odds. With practice using the guides listed below however, you'll soon end up converting the odds calculations in your head like a seasoned professional.
Remember, no matter what type of odds are shown, they all indicate the same thing: your potential winnings.
How to Read Betting Odds
There are three different ways in which sports betting odds can be displayed. Despite all being presented differently, the above examples all translate to the same chance of winning (33.33%) – all will yield $2 of profit for every $1 wagered successfully.
Understanding American Odds
As the name suggests, American odds are most popular in the United States. Working differently for favorites and underdogs, they're also known as 'moneyline' odds.
American odds for betting on the favorite work by showing how much money you would have to bet in order to win $100.
Things are different when betting on an underdog. The positive number shows how much you can win if you risk $100. You may notice that this is similar to 'odds-on' bets in UK markets. Let's illustrate that concept with some football odds…
If you see the letters PK alongside the odds offered on a game, it means there is no favorite and you should "pick" the winner of the game without worrying about any point spread.
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Transcript
How to Understand American Odds
If you're new to sports betting, the odds are usually listed in one of three ways:
- American
- Fractional
- Or Decimal
American odds work a little differently to the others. The odds for a favorite team to win the game are usually listed with a '-' sign, which indicates the amount a better would need to bet to win $100.
For the underdogs, the odds are accompanied by a '+' sign. This shows how much a better would win if they staked $100.
Let's see this in action.
The Miami Dolphins are favorites to win this Sundays game at -110 odds. You place a successful $110 bet on them, which means you receive $100 winnings and your original bet of $110 back as well! Your total payout is $210. So that's what happens when you bet on favorites using American odds.
Let's see what happens when you use American odds to bet on the underdog. In another football game on that Sunday, the Buffalo Bills are the underdogs to win at +240 odds. You place a $100 bet, which will yield $240 in winnings if successful!
Good news for the Buffalo Bills and you! They've won the game! You receive $240 in winnings and you get your original bet of $100 back, equaling $340 in total.
So that was the basics to sports betting using American odds.
Check Online Gambling for more information and to start betting today.
Here is what American odds will typically look like
- NFL
- MLB
- MLS
NFL
Football Team +260 Underdog
Chiefs -320 favorite
Buccaneers +195 Underdog
Patriots -250 favorite
- NFL
- MLB
- MLS
MLB
Twins +220 Underdog
Yankees -260 favorite
Rockies +160 Underdog
Diamonbacks -180 favorite
- NFL
- MLB
- MLS
MLS
United +825 Underdog
United -350 favorite
Whitecaps +825 Underdog
Red Bull -125 favorite
Understanding Fractional / UK Odds
Fractional odds, also referred to as British odds, UK odds or Traditional odds, are often used in horse racing.
These odds quote the net total which will be paid out to the bettor should they win, factoring in their stake.
On the other hand, a gambler backing Manchester United, who have odds of 1/5, will see a payout of just $1 for every $5 bet. That means a total payout of $6 for someone betting $5.
- You Bet $20 on Bournemouth
- You Win $100 (20 x 5=100)
- You also get your $20 bet back
- You Bet $50
- You Win $1,000 (20 x 50=1000)
- You also get your $50 bet back
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Manchester City | 11/8 |
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Liverpool | 5/2 |
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Manchester United | 11/8 |
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Tottenham Hotspur | 20/1 |
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Chelsea | 33/1 |
Understanding Decimal / European Odds
Decimal odds are most popular in Europe, Australia and Canada and many think they're the easiest format to understand. Almost all online sportsbooks will offer the option of displaying odds in the decimal format, which is sometimes known as European odds in the UK.
With decimal odds, the figure quoted is the exact amount that will be paid out if the bet is a winner. Decimal odds are essentially equivalent to the decimal value of the fractional odds, plus one.
- You Bet $100 on the German Football Team
- You Win $200 (2.0x100=200)
Your bet
$10
Your bet
$10
Armed with the above knowledge, you should now have a pretty good idea of how to read sports lines. Sportsbook odds can appear in any of the above formats, so it's helpful to be able to compare and convert between them.
Comparing Odds
It's not uncommon for the same odds to appear over and over again in relation to different games or events, since the disparity of skill levels between the teams/competitors can only be so large before a contest becomes totally unfair.
Most internet sportsbooks in 2024 will let you change between Fractional, American or Decimal odds on their markets. It's a little trickier to convert between moneyline/American odds and decimal odds because moneyline takes the form of both positive and negative numbers.
To convert positive American odds to decimal odds, just divide the moneyline odd by 100, and then add 1. For converting negative American odds to decimal odds, divide 100 by the negative moneyline odd, and then add 1. The examples below show how these equations work:
Positive American Odds to Decimal Odds
American Odds / 100 + 1
=
Decimal Odds
Example: +240
240 / 100 = 2.4
2.4 + 1 = 3.4
Negative American Odds to Decimal Odds
100 / American Odds + 1
=
Decimal Odds
Example: -350
100 / 350 = 0.28
0.28 + 1 = 1.28
How Do Vegas Odds Work?
Sports odds, whether you're reading them in your local bricks and mortar venue or on the web, are inevitably influenced by what the bookies are saying in Sin City.
Bookies use Vegas odds as a benchmark, meaning there's less variation between gambling venues across the world. Offering odds that are much better for players than Vegas odds will certainly attract more gamblers, but it can be disastrous for gambling venues if there's a big upset or underdog victory.
While Vegas odds are built to generate a profit for "the house", they're also created in such a way that means it's possible for gamblers to win big.
Calculating Your Payout
An odds converter or odds calculator is essential if you're betting on more than one sport at a time, so why not calculate your payout before betting?
Test Your Sports Betting Knowledge
How Well Do You Know Your Odds?
Start test
Answer the questions and discover how well you know your odds.
We all know that online gambling is a great way to make a little (or maybe a lot!) of extra cash in your spare time, with some lucky folks even able to turn it into a full-time career. Before you get to that, though, you'll need to know all the ins and outs of how American odds work.
That's why we put together this fun little quiz to test your skills. Think you're an odds-on favorite to get full marks? Or are the odds stacked against you…? Give it a try!
We've put together this fun little quiz to test your American odds skills. Think you're an odds-on favorite to get full marks? Or are the odds stacked against you…? Give it a try!
Results
How did you do?Class Clown
Eek! We'd recommend that you take another look at our guide on how different types of odds work. You don't want to end up losing money just because you didn't take enough time to get familiar with the basics.
Dr. Mike Zabrocki is a professor of mathematics at York University in Toronto, Canada. He specializes in algebra and representation theory.
FAQs
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How do sports betting odds work?
Sports betting odds are created by bookmakers to show what the outcome of a game or event is likely to be. They also dictate how much profit a player can make when betting on an event at that sportsbook. They're often heavily influenced by Vegas odds, football in particular.
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How do I read sports betting odds?
Odds are you’ll find one of the three different ways of listing odds explained above easier to understand than the others. Those raised around fractional odds, for example, can easily see that the numerator represents how much profit they stand to make based on a bet of the denominator’s value. E.g. A bet of $3 of 5/3 odds will yield $5 profit, thus a total payout of $8.
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Are the odds different depending on the sport?
In theory, odds can be shown in any format no matter what the game. In practice, however, the location of the target audience will have some impact on this. For example, NFL odds will virtually always be shown (initially, at least) in the American format because the viewing audience is predominantly based in the USA.
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How do I calculate my potential winnings?
Most sports betting sites have functions to calculate your potential winnings in real time. If not, there are sports betting calculators that you can use to work out your potential profits if you don’t feel comfortable doing so in your head.
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Why do I need to understand sports betting odds?
It’s important to have an understanding of different types of odds because it means that you can choose from sites worldwide, some of which may display their odds in just one format. Plus, it will help you to avoid making silly mistakes like placing big bets on events that actually have bad odds.
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Who sets the odds for sports betting?
Most bookmakers use their own teams to calculate odds based on various criteria, from the location of the match and the weather, to player absences or injury risks. Odds change quickly, as bookmakers update them while events are in-play. They will also use Las Vegas betting odds as a benchmark for their own calculations, which can influence the variety of odds they offer gamblers.
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What’s the difference between American, fractional and decimal odds?
Although they sometimes look very different, there’s no real difference between the purposes of these different types of odds - they all exist to show you your payout on a bet, a figure that will remain constant no matter which odds are used.
There’s no real difference between them, even though they look dissimilar. All betting odds share the same purpose – to show you your payout on a bet, a figure that will remain constant no matter which odds are used.