What are Odds?

Just as a consumer at the mall needs to know the price of a product, so too do bettors when it comes to bets.

Is the shirt worth the price? Is the bet worth the price offered? Same thing.

Everybody needs to know the value of what they’re buying.

In betting, the price given is displayed through odds.

The information we take from odds is twofold:

- First by indicating the likelihood of a particular event happening. The more likely an outcome, the lower the odds will be.

- Second, by demonstrating the monetary amount that can be won should said event happen, relative to your stake of course.

This makes perfect sense; if something is very likely and almost certain to happen, you have to expect lows odds and a low payout. There’s little risk attached to the bet and so why should you be rewarded for predicting something many also think will happen?

On the flip side, an event not seen as so likely to happen generates higher odds and a higher payout. The bet carries more risk and isn’t likely to be made by as many, so it’s only right this is reflected in how much you win.

High odds = Less chance of winning = High payouts

Low odds = More chance of winning = Low payouts

Depending on where you are in the world, you may find odds presented in one of three ways:

• American
• Decimal odds (European)
• Fraction (British)

They may appear different visually but essentially, the odds give us the same information. While we’ll look more in-depth at the most common way of displaying odds in the US (moneyline) shortly, there may be the odd occasion you’re faced with a decimal or fraction system so it’s worth knowing how European and British odds work too.

The team/participant deemed the favourite to win is assigned a negative (-) value, while the underdog given a plus (+) value.

As well as making clear the predicted fortunes of each side, the plus and negative signs tell us how each wager will pay. For instance the plus sign (underdog) will pay out more than the original wager. The minus sign (favorite) will pay out less.

Let’s illustrate this with an example:

• Tampa Bay - 175
• Detroit Red Wings +143

The best way of understanding a moneyline bet is to use $100. Going by what we know with Tampa Bay being favorites and Red Wings the underdogs, a $100 wager on the Red Wings would pay $143 should the Wings win. On the other side, a $175 bet on Tampa Bay would pay out $100 should they win.

Naturally, and as discussed, the payout is less than the original amount wagered for the team considered favorite - they’re expected to win and so the reward isn’t as high. This is why bettors can be drawn to backing the underdog where the payout will be more than the amount wagered.

It depends what you’re used to but decimal odds are arguably the most commonly used way of displaying odds. The fact that this way is widely used by the majority of online bookmakers today points to such.

The decimal number that follows a team or participant, represents the amount one can win for every €1 wagered. Here, not only can we clearly decipher a favorite and an underdog, the decimal number is already inclusive of our stake making it visible straight away how much we can win.

We've listed the five favorites for the prestigious prize, with the five teams less fancied to win at the Hard Rock Stadium in Florida.

From this, we know New England Patriots are the outright favorites - a €1 stake gives us potential winnings of €7 - while it would take something close to a miracle for Miami Dolphins to win the showpiece event - staking €1 would yield a return of €251.

In this case, the higher the number and the longer the odds, the less likely an event is of happening and vice versa. The lower the number and shorter the odds, the more chance there is of the team winning.

Odds of 12/5, or 12-to-5 can be an alien way of seeing odds displayed.

The good news is, it’s most likely you come across the American and European odds before seeing fractions.

The bad news is that fractional odds are frequently used by British bookies and because several of those happen to be among the world’s largest, there’s every chance that fractional odds will find their way into your betting world at some stage. So without further ado…

Unlike plus and minus values and numbers as decimals, here, we have numbers as fractions.

Now, I’m aware this wasn’t top of your list of subjects at school, so let’s begin with a relatively straightforward example, say 5/1 (five-to one). The second number (or denominator) is always the amount wagered, so in this case, $1. The first number, also called the numerator, refers to the amount your wager will yield if your bet is successful, this being $5.

In Layman’s terms, this means for every $1 wagered, you stand to win $5, almost like a ratio. Also important to remember is you receive your stake back.

For instance:

• Team A are 5/1 to win
• You’ve staked $1 on this happening and Team A have pulled through to win you your bet.
• As a result, you win a total of $6.
• $5 of this is the amount that was offered for the bet, while the remaining $1 is your stake

I suspect you’ll be betting more than $1 on occasions so what happens when the stake is increased? To make it easy, let’s take $10 as the amount staked. $10 at 5/1 will bring a return of $60 ($50 from winning bet + $10 stake).

Taking this knowledge into assessing a futures bet, is quite simple then, not least because you’ll mostly find teams listed in the order in which they’re likely to win.

But even if this wasn’t the case, you still be able to make out that Golden State Warriors stand a much better chance of winning the competition, than Orlando Magic, according to the bookmakers.

A wager on the Warriors will actually see a return less than our stake, going to show the likelihood of them winning. Orlando Magic meanwhile, will see a substantial return for our stake. Here, the bookmakers are so confident of this not happening that they’re prepared to offer $500 for your $1. In short, they don’t have a prayer.

Easy so far, agreed? Ok, but would I ruin the good vibes if I chucked odds of 10/11 or 9/4, into the mix?

You see, not all odds will be ‘to-one’. But if we apply the same logic we learnt at the start, i.e, second number being the amount wagered and the first number referring to the potential return, then it’s easy to see this price is for a strong favorite; one wins $10 for every $11 wagered. 9/4 translates to: for every $4 stake, you stand to win $9.