Updated on: November 27th, 2024
How Gambling Odds Work – Odds Explained
When you first start betting, gambling odds can seem very confusing. Firstly, there are different formats – some contain pluses and minuses, whereas others contain fractions. Secondly, there are numbers to deal with, and numbers are always going to seem intimidating if you struggled with maths at school.
But we are here to tell you that gambling odds should not strike fear in you. Although these systems seem complex, they’re actually very easy to understand. You don’t need to know much about math to understand how odds work either. Read on to find out how to read odds!
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What are Gambling Odds?
Gambling odds tell you how much you could potentially win on a bet. Reading gambling odds is an important skill in gambling, but it is more closely associated with sports betting.
When you play online casino games, it is usually assumed you already know the odds on the bet you are placing because that is part of learning how to play.
For example, if you play blackjack, you should already know that a natural pays 3:2 and a winning hand pays 1:1. These are standardized payouts that only change when you play a different variation. You should always learn the payout odds for each bet in a casino game before you begin playing. Often, this will prevent you from making bad bets for unrealistic gains.
In sports betting, it is a little more complicated because many factors come into play to decide the odds, such as form, history, venue, weather, etc. This means that a bet on one team will not have the same odds in every game, which is true with casino games. (A red/black bet in roulette is always going to pay even money.)
For example, the Cleveland Browns will have very different odds in a game against the Cincinnati Bengals than against the Kansas City Chiefs. The numbers will illustrate this. For this reason, it is important to understand how to read odds.
Types of Gambling Odds
There are three popular types of gambling odds systems, which we will explain below:
American
American odds are also known as moneyline odds. You will often find this odds format at US sportsbooks and casinos. The system makes use of both positive and negative mathematical signs.
A standard betting line using the American odds system looks like this:
Oklahoma City Thunder +370
Denver Nuggets -495
Generally, the negative sign denotes the favorite to win the game, whereas the positive denotes the underdog. However, there are times where both teams could have positive or negatives. (Usually, this is the case in evenly contested games.)
A good rule of thumb to remember is that the negative sign shows you much you need to bet to win $100. The positive sign shows you how much you could win if you bet $100.
You can use these formulas to calculate how much you could win on either of the two bets:
- Positive – Odds x (Stake/100)
- Negative – (100/Odds) x Stake
Decimal
Decimal odds are also known as European odds, but the system is used in several countries outside of continental Europe, including Australia, New Zealand, South Africa, and Canada.
If you ask us, this is probably the easiest system to read. Both teams have a decimal next to their name. The team with the larger number is the underdog, whereas the team with the smaller number is the favorite.
To calculate your total winnings, you multiply your stake by the decimal. To illustrate this, here is an example line:
New Jersey Devils (2.30)
New York Rangers (1.67)
The New York Rangers are the favored team in this game because they have the smaller decimal. A $100 bet on the team would payout $167 (stake + winnings). We know this because 100 x 1.67 is equal to 167. The same bet on the Devils would payout $230 because 100 x 2.30 is equal to 230.
As you can see, the formula is much easier to use because it only requires you to multiply two numbers.
Fractional
Fractional odds is the preferred system at sportsbooks in the United Kingdom. As the name suggests, odds are displayed in a fraction. Here is an example line:
Buffalo Bills 5/4
Kansas City Chiefs 20/29
You can use the following formula to calculate your winnings on a bet:
- Total Payout = [Stake x (Numerator/Denominator)] + Stake
The calculation provides you with both your winnings and stake combined. Unless you’ve always used fractional odds, we suggest staying away from this system because it can be a little confusing for newcomers.
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