Betting Guide: How To Quickly Understand Odds & Conversions
Betting sounds attractive to many, but few become successful while having fun. The first stop for beginners should be a betting guide. You probably know a person who is passionate about betting, but rarely wins. The key to becoming better at betting is learning how it works.
Betting odds are at the center of betting as an activity. So, the best way to improve is to understand everything about these odds. All you need to know about betting is in this betting guide. Remember to read slowly and focus. Let’s begin.
Betting Guide: Betting Odds Work on The Principle Of Chance
You must first understand the concept of chance before you can understand betting odds. Chance is the likelihood that an event will happen. Many times you will hear the word “probability” when talking about chance. Probability is a chance expressed in percentages.
Here is a simple example: let’s imagine that you want to roll a dice. A dice has six sides. So, rolling a die results in the probability of one out of six for each outcome. In other words, there are a total of 6 possible outcomes, but each roll results in just one outcome. The reason is that the dice cannot land on two numbers at the same time.
So, there is an equal chance that the dice will land on any of the six numbers. Now, let’s convert this chance into probability—the dice will 100% land on one of the six numbers.
If you divide 100% by the six possible outcomes, you get 16,66%. This number is the probability (or chance) that the dice will land on any of the six numbers. Also, this probability is equal for all six numbers.
Using Chance & Probability To Understand Betting Odds
You need to learn how to convert betting odds to improve your chances of betting. Converting betting odds is necessary because of their respective implied probabilities.
There are two reasons for understanding the implied probability. The first reason is that this probability helps you determine the potential value in a betting market. If you calculate this value and don’t like it, you should not waste time betting in that market. The second reason is that calculating this probability also helps with individual bets.
There are three most popular formats of betting odds in the world. These formats are the decimal, fractional and American formats. By now, you know that you can convert odds into implied probability. But, you can also convert implied probability into these odds formats.
This betting guide can help you master the conversion process, so let’s go into more detail.
How To Convert Betting Odds
Converting betting odds takes place in three steps:
- Understand the format of the odds you want to convert. You can understand the format by asking if the odds are decimal, fractional, or American
- Convert the odds to their respective implied probability
- Convert the implied probability to the odds format you need
Here is a quick example. Let’s imagine that you have decimal odds of 3.00 that you want to convert to fractional odds. The implied probability of decimal odds of 3.00 is 33.3%. The fractional odds from an implied probability of 33.3% are 2/1 (but, more on conversion a bit later).
Every betting guide usually has definitions of different formats of odds. But, only the best betting guides help with the conversion process in detail. Let’s take a look at how you can convert odds to implied probability.
Betting Odds To Implied Probability: Step-By-Step Explanation
By now, you know that sports betting is home to three different kinds of odds. These odds are:
- Fractional odds, with the format 5/2, or 3 to 2, etc
- Decimal odds, with the format 1.85, or 2.75, etc
- Moneyline or American odds, with the format -120, or +140, etc
The crucial thing to understand is that all of these different odd formats express the same thing. Each format of odds reflects how much money you receive in return for placing a bet.
There are two ways you can convert odds to implied probabilities. The first way is to use a conversion calculator. The second way is to use formulas and convert odds by hand. In this betting guide, you can learn to use both methods. For now, take a look at how conversion works when you use formulas.
Conversion of Fractional Odds
Among the three most popular formats of odds, fractional odds are the most traditional. You understand right away the return you receive for a successful bet. This simplicity makes fractional odds easy to remember.
Here’s an example. You are thinking about betting on an upcoming horse race. A bookmaker is offering 5/2 odds for a specific horse to win. The odds of 5/2 (pronounced as “5 to 2”) mean that you receive five units back as profit for every two units you bet.
If you apply this logic to betting with real money, the example will look like this. Let’s imagine you are thinking about betting 200 NGN on that horse. If the horse wins, you will receive 500 NGN profit in return along with your original bet of 200 NGN.
Here is how this conversion of fractional odds looks when you use the formula:
Implied probability = denominator / (denominator + numerator)
If you apply this formula to the above example with the horse, you get this:
5/2 = 2 / (2+5) = 2/7 = 0.2857 = 0.2857 x 100 = 28.57%
Conversion of Decimal Odds
Decimal odds are the simplest of the three odds formats. You will typically find a straightforward explanation of these odds in every betting guide. Decimal odds reflect the return you get for every unit you bet.
Here is an example. Let’s imagine you want to bet on a football match between Manchester United and Arsenal. Also, let’s imagine that a bookmaker is offering 1.65 odds for Manchester United’s victory. Such odds mean that you receive a 0.65 profit for every 1.00 you place as a bet on Manchester to win.
Here is how you can calculate the implied probability of decimal odds:
Implied probability = 1 / Decimal odds
Let’s apply this formula to the above example with Manchester United:
1/1.65 = 0.606 = 60.6%
Conversion of American Odds/ Moneyline Odds
A useful betting guide must be comprehensive. Whether you are a beginner or experienced gambler, you will come across American odds. This format of betting odds mostly exists in North America.
Moneyline odds seem confusing at first. However, if you like listening to American sports podcasts or broadcasts, it helps to understand these odds. American odds exist in two forms: “minus” moneylines and “plus” moneylines.
Let’s imagine you come across a minus moneyline of -120. In this example, you can imagine that a bookmaker is offering odds of -120 that the Los Angeles Lakers will win a game.
Such minus odds mean that you need to bet 120 NGN to win 100 NGN. So, you will receive a profit of 100 NGN if you place 120 NGN to bet on the Lakers to win.
On the other hand, you can also encounter a plus moneyline of +180, for instance. Let’s also imagine that you have found a bookmaker offering +180 odds of the Denver Nuggets winning a game. These odds mean that you receive a profit of 180 NGN if you bet 100 NGN.
Conversion of Minus Moneylines
The formula for minus moneyline conversion is as follows:
Implied probability = (-(minus moneyline odds)) / (-( minus moneyline odds)) +100
In the previous example of -120 odds, you apply the conversion formula like this:
(-(-120) / ((-(-120)) + 100) = 120/220 = 0.545 = 54.5%
Conversion of Plus Moneylines
Converting plus moneylines is a bit different than minus ones. Here is the formula:
Implied probability = 100 / (plus moneyline odds + 100)
Here is how you can apply this formula to the example we mentioned above:
(100/180+100) = 100/280 = 0.357 = 35.7%
What Is Handicap Betting?
Handicap betting is a betting method that bookmakers use to make sporting contests more fair events. If you look at the official definition of this term, it will read “a circumstance that makes success or progress difficult.”
When first creating odds, a bookmaker will give a “handicap” to one selection or team in the event. The team must overcome this handicap to win. Bookmakers will often give handicaps to teams who are playing against heavily inferior opponents.
So, the bookmaker will provide more odds than just lose/draw/win to create a more fair betting environment. They will also offer a handicap bet on one team that must meet unique criteria for your bet to come true.
Here is an example. Imagine that you want to bet on a football match where Barcelona will play against Enyimba from Nigeria. Also, imagine that you find a bookmaker offering odds of 1/40 on Barcelona winning. This same bookmaker is offering odds of 40/1 of Enyimba winning.
This match does not sound interesting at all to place a bet for obvious reasons. But, what if Barcelona had a handicap? For example, imagine if Barcelona had to beat Enyimba by four or more goals. This situation sounds much more interesting for betting than the previous one. This example demonstrates how handicap betting works.
Betting Guide Bonus: What Is Value Betting?
Another essential type of bet you should understand is value bets. Simply put, a value bet is one where the probability of an outcome is higher than what the bookmaker’s odds suggest.
There is another way to think about value bets. Remember that you will place bets that have a higher chance of winning than what the bookmaker’s odds imply. Why is this way of thinking about value bets significant? The reason is that you will have an advantage over the bookmaker in the long run.
Here is an easy example of a value bet: let’s demonstrate value betting on a coin toss. A coin toss only has two outcomes – either heads or tails. The probability of the coin landing on either heads or tails is 50%. This probability also means that either of these outcomes has an odds of 2.00 (odds = 1/probability in decimals).
Imagine you found one bookmaker who offers odds of 2.10 on heads, and another bookmaker offering odds of 2.00 on tails. Which bet would you make? The answer is that you should bet on the higher odds. Why? Because the real probability of the two outcomes is the same. If you know this information, you will earn a higher profit because of higher odds.
In other words, the 2.10 odds are higher than what the real probability (2.00) suggests. This difference in appearance creates a value bet. So, the bigger the difference between the two values, the more profitable the value bet.
The internet is full of tools that can help you with the conversion of odds. You can use a betting calculator with a few clicks. However, understanding the logic and calculations behind the conversions is crucial.
The reason why you should not rely on betting calculators too much is simple. You will not always be able to use these calculators. You should practice thinking about odds conversion instinctively.
As any betting guide will tell you: technology is excellent, but betting odds originate in the human mind. Also, odds use mathematics, which is the language of the mind. So, improve your betting skills by practicing your mind before any other tool. Good luck!