Odds and implied probability

Odds aren't just "what you win". They're also the bookmaker's opinion, expressed as a number, on the chances of an event happening. Not an entirely neutral opinion, though: the bookmaker also adjusts its odds according to how its customers' stakes are spread, to limit its risk. Knowing how to read them is the value bettor's first skill.

The three odds formats

These three odds are identical. In this app, we use the decimal format, the easiest one for calculations.

Useful conversions:

• Fractional → decimal: $\text{odds}=\frac{a}{b}+1$ (3/2 → 2.50)
• Positive American → decimal: $\text{odds}=\frac{US}{100}+1$ (+150 → 2.50)
• Negative American → decimal: $\text{odds}=\frac{100}{|US|}+1$ (−200 → 1.50)

Implied probability

The implied probability is the probability "hidden" in the odds:

Key takeaways

• The lower the odds, the more likely the bookmaker thinks the event is.
• Odds of 2.00 correspond to 50%: a coin flip.
• Odds don't tell you what will happen. They tell you what the market thinks will happen, at a given price.