Want to know how much you could win from your sports bets? This guide explains odd formats to help you calculate potential returns, gives you the lowdown on implied probability, and teaches you how to remove the vig from betting lines.
Firstly, be aware that sportsbooks and online betting sites use three odds systems: American, decimal, and fractional. Understanding how to read betting odds is key to making informed wagering decisions.
If you see odds displayed with positive (+) and negative (-) symbols, this is the American betting odds system. These figures indicate how much money you could win when wagering on that outcome.
Positive American odds tell you how much you can win from a $100 bet; negative American odds show you how much you have to bet to try and win $100. If you see “PK” (pick’em) next to the odds offered on a game, it means that both teams have an equal chance at winning the matchup. Therefore, successful wagers placed on either outcome will give you the same potential winning profit.
Taking the above NFL moneyline odds as an example, the negative number (-) featured in the win column means that the Chicago Bears are the favorites to win the NFL game. The positive number (+) tells you that the Cincinnati Bengals are the underdogs.
With the odds above, if you bet $150 on the Bears to win, you will make $100 profit if they beat the Bengals ($150 initial wager + $100 win = $250 total return). But, as the odds are more favorable, a $100 bet on the Bengals to win could make you a profit of $170 ($100 initial wager + $170 win = $270 total return). However, this doesn’t mean you must place a minimum bet of $100 or $150. For instance, a winning $10 bet with +150 odds would make you a $15 profit.
Many online sportsbooks will tell you your potential winnings automatically. But if you want, you can calculate how much you can win from your wagers by using straightforward formulas.
How to Calculate Potential Winnings with Positive American Odds
- Positive American odds: Potential profit = wagered sum x (Odds ÷ 100)
Let’s use a $10 wager with +130 odds as an example. In this case, the formula would be $10 x (130 ÷ 100) = $13 profit. Add this profit to your initial stake to calculate your total payout.
How to Calculate Potential Winnings with Positive American Odds
Calculating potential winnings with negative American odds is also simple.
- Negative American odds: potential profit = wagered sum ÷ (Odds ÷ 100)
For example, if we take a $30 wager with -150 odds, the formula would be $30 ÷ (150 ÷ 100) = $20. Add this winning profit to your original stake to work out the total return of a successful wager ($30 initial wager + $20 winnings = $50 total payout).
Decimal odds (aka digital odds, continental odds, or European odds) tell you the amount you could win for every $1 wagered on the outcome. Unlike other odds systems, the number given tells you your total payout (initial wager + winnings) instead of just the profit. This odds system makes working out your total return straightforward.
How To Calculate Potential Returns With Decimal Odds
To calculate decimal odds, multiply your stake by the decimal odds number. (total payout = stake x decimal odd number). For example, if you wager $100 at odds of 4.0, the total payout is $400 (100 x 4), the potential profit is $300 ($100 x 4 – your $100 stake = $300).
The fractional odds system is used mainly in the United Kingdom & the Republic of Ireland for horse racing, soccer, and other sports bets. Fractional odds show you how much of the stake you could profit if you win the bet. The first number on the left shows you how much you can win in relation to the figure on the right.
- Formula to calculate profit from fractional odds: initial stake x fraction = profit
For instance, if you wager $10 with 4/1 odds and win, the bookmaker will give you $40 and your initial stake, equalling a total return of $50.
- Total payout formula of 4/1 odds with $10 stake: $10 stake x (4/1) = $40 profit + $10 original stake = $50 total payout
Remember that the first fraction number represents the amount you can win in relation to the stake (the second number). However, some odds don’t feature the number one. If this is the case, use the same calculation when you see odds like this – 5/2, 6/3, 4/3, etc. For example, if you place a $10 wager on outcomes with 9/2 odds, you could make a profit of $45 and receive a total return of $55.
- Total return formula of 9/2 odds with $10 stake: $10 initial stake x (9/2) = $45 profit + $10 initial stake = $55 total return
Implied Probability of Sports Bets
Implied probability shows betting odds as a percentage. To calculate the implied probability, you need to divide the risk by the return. For instance, placing a $100 wager on an outcome with +150 will equal a potential total return of $250. Therefore, this bet has an implied probability of 40%.
- Example of implied probability with +150 odds: $100 Risk ÷ $250 potential total return = 0.4 (40%).
However, be aware that this isn’t a correct reflection of your chances of winning, as other factors affect the bookmaker’s decision when determining the odds on a specific outcome. For instance, your sportsbook may change the odds to encourage more action on a certain side. They do this by including a charge known as the vig, vigorish, cut, or juice.
What’s A Sportsbook Vig?
The vig is a sportsbook commission for taking a bet. Bookmakers include the vig into betting odds to ensure they make a profit and avoid significant losses.
Let’s use an even odds NFL moneyline bet for the Los Angeles Chargers v Dallas Cowboys at -120 as an example. As it’s at even (pick’em) odds, a winning $120 bet on either team will profit you $100. If you make a successful wager, you receive your winnings and initial stake – therefore, you pay nothing. However, sportsbooks never want to pay out more than they make from wagers. For this reason, they use a vig to ensure they make a profit.
For example, if someone else places a $120 losing bet (highly probable as both teams are evenly matched), the sportsbook will take $120 from the other bettor. So, although the sportsbook pays you $100, it also takes $120 from the losing bettor. The bookie uses the money earned from the losing bet to pay your winnings and pockets $20 profit in the process – this is the vig.
Calculating the Implied Probability With Amercian Odds
To convert positive American odds into an implied probability, use the formula of 100 ÷ (positive American odds + 100) x 100 = the implied probability percentage.
- Example of + 200 American odds: 100 ÷ (200 + 100) x 100 = 33.3%
To calculate the implied probability of negative American odds, follow this formula: negative American odds ÷ (negative American odds + 100) x 100 = implied probability.
- Example of -120 American odds: 150 ÷ (120 + 100) x 100 = 68.18%
Calculating the Implied Probability With Fractional Odds
To work out the implied probability from fractional odds, you have to use a different formula: denominator ÷ (denominator + numerator) x 100 = percentage of implied probability.
- Example with 8/2 fractional odds: 2 ÷ (8 + 2) X 100 = 20%
Calculating the Implied Probability With Decimal Odds
To calculate the implied probability from decimal odds, use this formula: 1 ÷ (decimal odds x 100) = implied probability percentage.
- Example with decimal odds of 6.50: 1 ÷ 6.50 X 100 = 15.3%
Why is Calculating the Implied Probability Useful?
As mentioned above, many factors determine the odds given by a bookmaker. Therefore, specific odds may not reflect your own estimation. For example, if you think one team has a 70% chance of winning and is available at 62.4% implied probability, it shows that the likelihood of you winning your bet isn’t reflected in the odds.
When you convert sportsbook odds into a percentage, they include the vig. Because of this commission, the implied probability of all possible outcomes of a matchup will be above 100%. This is called the overround and is used to incorporate the vig into the betting line odds.
For example, if we calculate the implied winning probability from the moneyline betting line odds above (Broncos -300 and Jets +225), we can determine the vig. The Broncos implied probability is 75% ($300 initial wager ÷ $400 potential total return = 75%); the Jets is 30% ($100 initial wager ÷ $325 potential total return = 30%). The sum of these two probabilities is 105%. When you subtract 100 from this figure, you are left with the overround/vig. To calculate the implied winning probability of each outcome without the vig, you just need the total sum of the two probabilities.
- Formula to calculate winning probability without the vig: implied probability of the team ÷ total sum of both implied probabilities
For example, if we take the implied probability of the Broncos (75%) and divide it by the total sum of both team’s winning probabilities (105), the probability of the Broncos winning is 71% according to the sportsbook (75 ÷ 105 = 71%). Using the same formula, the probability of the Jets winning is 29% (30 ÷ 105 = 29%).
To check that you have calculated the probabilities correctly, add up both of the actual probabilities. The total should be 100 or 1, as a percentage or decimal. For instance, 71 + .29 = 1.00. or 100%.
Frequently Asked Questions
Do different bets use different odds?
No. The odds on the outcomes of all wagering options, such as parlay, prop bets, etc. all use the same systems. Depending on the country, some odds systems are favored over others. The three most common odds systems used worldwide are American, decimal, and fractional.
Do I need to understand all odds systems to bet on sports?
Depending on where you’re placing bets, you might have to know how various odds systems - American, decimal, and fractional - work. But, if you reside in the US, you simply need to learn how to calculate your winnings from American odds (as explained in this guide). However, most online sportsbooks have a drop-down menu that lets you select what odds formats you want to use when looking to place bets on games or futures of the NBA, NFL, NHL, and other top sporting leagues/events.
How can I change American odds into decimal odds?
To get decimal odds for positive American odds, divide the American odds by 100 and add 1. For example, if the American odds are 200, divide 200 by 100 and add one: (200 ÷ 100) + 1 = 3.0 decimal odds. Using negative American odds, divide 100 by the negative odds and add one. So, if the negative American odds are -300, the formula would be 1 + (100 ÷ 300) = 1.33.
How Can I change decimal odds into American odds?
You can change decimal odds into positive American odds using a scientific calculator. Subtract one from the decimal value and multiply it by 100. For example, a decimal value of 4 works like this = (4 - 1) x 100 = 300. To get negative American odds, take -100 and divide it by the decimal odds minus one. For instance, a decimal value of 1.2, use this formula: -100 ÷ (1.2 - 1) = -500 American odds.
Can I use bitcoin to bet on sports?
Yes. In fact, because Bitcoin transactions are quicker than traditional payment methods many sportsbooks let you fund your sportsbetting account using the cryptocurrency. Learn Learn how to bet online using bitcoin to place legal wagers on your favorite sporting events today.
Can I look at betting line odds using my smartphone?
Most online sportsbooks let you use your smartphone to consult odds, place various bets, and even open new sports betting accounts. Some online bookmakers even have a free application you can download and use to wager on your favorite sporting events on the go. However, if the betting provider doesn't have a specialized app, you can access its services by using your iOS or Android device's browser.