It can be quite difficult for a new gambler to understand how betting odds are calculated and what they actually mean. Each outcome has odds corresponding to how likely an outcome is to happen, the returns from your stake are then calculated based upon that.
It’s simple to understand that the odds of an outcome happening is defined as its probability of happening with a small deficit taken by the bookmaker to compensate for their efforts. The simplest example to use is the flipping of a coin, it’s a 50/50 chance that the coin will land on heads/tails, that’s 1/1 (2.00) in betting odds, which is called Evens. This means for every £1 you were to put on your chosen outcome, it would return £1 + your original stake.
It’s not difficult to calculate odds or probabilities, but plenty of gamblers won’t know exactly how it’s done. Usually they come in two different formats (Fractional & Decimal), that’s 1/1 or 2.00 for Evens.
If you were to work out the probability of something happening based on the odds, the equation behind the maths is fairly simple. Using 2/1 as an A/B format, here’s the equation:
Probability of selection = B /(A+B)
= 1/ (1+2) = 1/3= 33.33%, so that’s a 33.33% chance of something which is priced up at 2/1 happening.
For sanity, it’s worth checking some other common odds, such as 4/1 (5.00) & 1/3 (1.33):
= 1/ (1+4) = 1/5= 20%, so that’s a 20% chance of something which is priced up at 4/1 happening.
= 3/ (1+3) = 3/4 = 75 %, so that’s a 75% chance of something which is priced up at 1/3 happening.
Another issue many people have is calculating what their potential winnings would be from a chosen stake on an outcome at chosen odds. It’s another very simple but sometimes confusing sum to work out.
Using 2/1 (A/B) as an example, whatever you put down for the B stake side of this, it’ll return twice your stake plus your initial stake, so essentially tripling your starting stake.
More and more, fractions seem to be left behind as online betting and decimal odds seem to be the first choice of many punters these days. It’s becoming more popular as time goes by as it’s easier for newer less experienced punters to work out their chance of winning and also what their returns will be. It’s far easier to understand the returns, it’s simple your stake x decimal odds. £1 x 3.00 = £3.
In summary, the betting odds are the probability of an outcome happening and gives you the ability to work out how much you’d need to put down in order to return a certain amount. The equations may seem a tiny bit complicated, but once you’ve got the hang of them, they’ll really help you in deciphering why odds have been priced accordingly.