Sports Betting Odds Explained - What Are Odds, How Do They Work, and How To Calculate Winnings

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Ben Harris

Passionate Sports enthusiast and history graduate. Writing sports betting content for over 6 years, including handicapping college football, horse racing, and soccer at the UK's top daily betting paper the Racing Post, as well as NFL, Boxing, UFC, and Winter Sports here at Pickswise. Partial to an underdog, player prop, and a longshot parlay!
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Understanding Sports Betting Odds: What Are They?

The most common questions in regards to sports betting particularly from those new to sports betting are around the odds, understanding them, what do they mean and how do you calculate them. Well, that’s exactly what we’ll run through here including what are the odds, the types of odds you’ll see at sportsbooks, how to calculate each type, and the importance of shopping the odds and concessions.

The basics of odds and what they are is to demonstrate the sportsbook’s idea on the probability of an event occurring such as a team winning. Odds are also used to calculate your winnings if you correctly select a bet that wins. Check out below for a breakdown of each type of odds and how to calculate

Sports Betting Odds Explained –  American Odds

American Odds are the most common type or format you will see at sportsbooks in the US and typically the default option, but you can change this at most sportsbooks. American odds can easily be spotted by the + or – symbol in front of the odds rather than just a number, which is decimal odds, or a fraction for fractional odds. 

What do the +/- mean in American Odds

The + and the – are used in sports betting odds to denote which side is the favorite and which side is the underdog. When you see odds such as +300 or -220 you know you’re dealing with American Odds.

The + and the – also tell you about how to calculate the odds for both favorites and underdogs with American odds. The team or side with a – sign is the favorite and the team with the + is the underdog. 

How To Calculate Payouts with American Odds

Calculating the odds is often the most confusing aspect to new sports bettors but it’s actually simpler than most first think. As mentioned above, the – sign indicates the favorite, and the + indicated which is the underdog. The symbols also tell you how to calculate the odds and your potential winnings on that particular bet.

The – sign shows you exactly how much you must bet in order to make a $100 profit. Whereas the + sign shows how much you will win if you stake $100.

In the example below FanDuel Sportsbook have the Los Angeles Clippers as the -220 favorites to beat the underdog Washington Wizards team who have money line odds of +184.

Therefore, if you stake $220 on the Clippers to win, you’ll win $100 profit if correct ($320 total) but if you like the underdogs, in this example the Wizards, at +184 you would win $184 profit when staking $100 ($284 total)

American Odds can be used across all markets, not just the money line, but the process and calculations remain the same regardless of how big or small the odds are.

Sports Betting Odds Explained –  Fractional Odds

Fractional odds are more commonly used in the UK, sometimes referred to as London odds. Fractional odds come from a history of horse racing and are considered the oldest form of odds.

To some, they might be strange-looking, but once you understand what they mean, they are really easy to calculate.

How To Calculate Payouts with Fractional Odds

Fractional odds are extremely simple to calculate as the first number is the amount you can expect to win and the second number the amount you’ll need to stake.

For example;
If you wanted to place a bet on a team with odds of 9/4 then a $40 wager would see you win $90 in profit, so $130 in total. Similarly, a $100 wager on a team that is 3/1, would see a return of $400 — a profit of $300.

For less simple calculations where you aren’t staking the bottom number to win the top number, you must multiply your stake by the numerator (the top number), then divide the result by the denominator (the bottom number).

For example;
If you place a $50 bet at odds of 4/6 the odds calculations would be as follows

(50 x 4) / 6 = $33.33 profit for a total return with your stake of $83.33 

Sports Betting Odds Explained –  Decimal Odds

Of the three types of betting odds, you will see across sportsbooks the decimal odds are the easiest to understand and calculate. While most people are used to seeing the American odds as standard, you can change the odds format with most sportsbooks, with decimal odds the most popular switch.

Decimal odds are mainly used in Europe and as the name suggests, they are numbers used with usually two decimal places, such as 2.10 or 1.46.

How To Calculate Payouts with Decimal Odds

The reason why decimal odds are considered easiest to understand is the simplicity in calculating winnings from the odds.

To calculate your winnings when betting with decimal odds you simply multiply your stake by the odds and that will show you your total returns

For example;
A $50 wager at odds of 5.4 would be calculated as
50 x 5.4 = $270 for a profit of $220

Using Your Sportsbook Betslip To Calculate Your Winnings

Thankfully with legal online sports betting now more accessible than ever, you can calculate your winnings when betting online through the sportsbook’s bet slip. You can do this through the sportsbooks’ mobile app, or on desktop.

What this allows you to do is add a selection to your bet slip, it will show you the odds for that selection, and upon entering your stake it will calculate your winnings.

For Example; 

In the example above, FanDuel Sportsbook has the Tampa Bay Lightning priced at +134 on the -1.5 Puck Line against the Chicago Blackhawks.

By adding that pick to your bet slip, and then adding a $50 stake, it automatically calculates that your potential winnings on this slip would be $67 for a total return of $117 including your stake.

Who Sets The Odds At The Sportsbooks?

The odds are set by people known as linemakers or oddsmakers. These are individuals or groups of people that set about setting the lines for every event and market a sportsbook covers. This is a hugely important job because they need to ensure the lines are appealing to a sports bettor but also try and make the house, or the sportsbook, money by getting the line correct.

Each linemaker or team of linemakers has their own way and processes of setting the odds for each event and are normally very secretive about this. However, what we do know is they have access to the best technology, data including current and historical trends, allowing them to run their models or scripts to predict the outcomes of games. The linemakers are then tasked with figuring out how the public will bet on the game, will they favor one side because they’re on a run, have a big star, or a huge fan base? This is considered alongside their own projections to try and set a line that will split the betting action between both sides, meaning the sportsbook can profit without any or little risk.

How Do The Markets Work? and Why Do The Odds Change?

There are a few reasons why the odds may change leading up to an event, some are reacting to news such as team injuries, media stories, weather, and things out of the sportsbook’s control, while other causing factors are business-related.

As mentioned above, when setting odds and lines, the sportsbooks are trying to get equal bets on both sides so they can win with no risk and collect what is known as the juice.

If the public decides they don’t agree with the sportsbook’s odds or lines and 80% of bets go on one side, the sportsbooks will have big liabilities on that side and will look to balance their books. They do this by changing the odds or the line.

For example, if everyone is betting a favorite at -180 or -4 against the spread, they will shift the line or odds to make them -250 favorites or -5 on the spread. This will likely start to deter people from betting the favorite and encourage more to bet the underdog at + 5 or bigger odds on the money line. Providing this happens, the sportsbooks will have less of a risk on one side of the result, known as balancing their books.

Pickswise brings you all of the latest odds from the biggest sporting events all year long. From NBA Odds to March Madness Odds, we have it all. Check out our designated odds pages now to make sure you’re wagering on the best possible odds for your picks.

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