Ever Wondered How Betting Odds Are Calculated? Full Guide
New players looking to get into online gambling tend to ask themselves the question, “what do betting odds mean?” They will also want to know how betting odds are calculated. We will answer both of these questions for you in our guide to betting odds. Finding betting odds that offer you the most value is the best way forward for your betting endeavours, so read on to have betting odds explained.
Having betting odds explained will also in turn help you understand how bookmakers make money as well. With that being said, let’s get stuck into our guide for how betting odds work and what to look out for.
Main Points Covered in This Article
- Odds show you who the underdogs and favorites are
- Betting odds indicate how valuable your bets winnings can be
- Odds can change right up until the start of a match
So How Are Betting Odds Calculated?
How betting odds are calculated for a particular event or fixture is dependent on a number of different factors. A bookmaker will try to determine the probability of both results in a fixture or the probability of someone winning a tournament such as golf. The bookmaker needs to calculate the odds in such a way that they reflect the realistic probability of each result while ensuring that they also stand to make a profit from sports bettors.
But what do betting odds mean? Bookmakers will draw up a set of odds for a fixture by taking all of the data into account. Let’s say for example it is a football match between Chelsea and Liverpool. The bookmaker will take into account the previous match history between the two teams, the injury records, current form, players statistics, current coaches of the team, team morale and home advantage. There are many other factors to consider but these are some of the most important for how betting odds are calculated.
If it is an event that is perhaps not related to sport, the bookmaker will likely give you low-value odds as there is no previous data to go on. They tend to lead with caution in this regard, so far example giving odds at the start of the X-Factor season, you won’t find great odds as there is no data to suggest a probable outcome.
So as you can see, it is really all about data, data and more data. The more information the bookmaker has about a particular fixture or tournament, the more likely they are to give you reasonable odds that accurately reflect the probability of any of the outcomes. Now that you have the basics of betting odds explained, you roughly know how to calculate betting odds yourself. At the end of the day, you will notice that most bookmakers will offer similar odds, especially on team sports such as football, rugby or basketball because they all take similar factors into account. Knowing how betting odds are calculated goes a long way to answering the question of what do betting odds mean.
Betting Odds Terminology You Need to Know
There are one or two terms to look out for when betting on any sporting events or any events in general really. These terms will help you to answer the question of what do betting odds mean. Keep these in mind when going forward:
Probability: This merely means to suggest what the chances are of either team winning or in the case of political odds, the probability of a politician winning their election. Probability goes hand in hand with betting odds, as the odds that are given suggest the probability or the likelihood of a certain result or results. Probability largely lends itself to how betting odds are calculated.
Favourites: If a build up to a fixture or a review or any kind refers to the favourite, they are referring to the team that the odds are favouring to win the match. Once you become more familiar with betting odds, you will notice when the odds are favouring one team over another. The odds will generally be lower for teams that are favoured to win.
Underdogs: On the other end of the spectrum are the underdogs. Underdogs are the team or individual who are considered to have less of a chance of winning their sporting event. That means that the odds for underdogs will be higher and represent the chance for a bigger payout should they win. Underdogs can be a great way to win big but they are considered to be underdogs for a reason, so be wary of betting on the underdog too frequently. Once you know how to calculate betting odds yourself, you will be able to judge how fair a bookmaker’s odds for the underdog really are.
A Full Run Down on the Different ‘Types’ Of Betting Odds
It doesn’t stop at merely calculating the odds when it comes to betting odds explained, as there are also different types of betting odds for punters to choose from when placing their bets. Knowing what these betting types are will help answer the question of what do betting odds mean. Depending on where you are from, you may be accustomed to seeing one odds type. For example, North America uses American style odds, the United Kingdom predominantly uses fractional odds and Europe mainly uses decimal odds. Some punters do ask “is online gambling legal in India?” And we can assure that barring two states, that it absolutely is. We will run through what each of these odds look like and how betting odds are calculated.
Some of the biggest bookmakers in the world tend to prefer using fractional odds. They are predominantly used in the UK and Ireland but are still the preferred type of odds for global bookmakers as well. Fractional odds are represented either by a hyphen or a dash and will look something like this 8-1 or 8/1. Understanding fractional odds will help to, in part, answer the question of “what do betting odds mean?”.
The 8/1 represents the amount won (profit) to the initial bet. So for every ₹100 you wager you can possibly win ₹800. So if you only put ₹100 down for your wager and you win, you will win ₹800 plus your initial wager back so in reality, it is ₹900. So if you were to make a bigger bet of say ₹10000 you would win close to ₹90000 (₹10000 stake + ₹80000 winnings).
Let’s take a look at a real-world example. Liverpool (10-11) vs Chelsea (4-1) has Liverpool tipped as the favourites to win. So if you were to bet ₹5000 on Chelsea to win and they are successful, you would win ₹25000 (₹5000 + ₹25000). If you bet the same amount on Liverpool to win, you would only come away with roughly ₹4500 plus your initial stake so the total would be roughly ₹9500.
Decimal odds are the odds most prominently used throughout Europe. Countries like New Zealand, Australia and Canada also prefer the decimal odds type. Decimal odds will look like this “2.0 or 11.0”. The difference between decimal odds and fractional odds besides the obvious look of them is that decimal odds include your stake in the total payout. So it would be “total payout = stake x decimal number”.
Take the PGA Championship golf tournament for example. Tiger Woods has decimal odds of 20.0 and Jason Day has decimal odds of 25.0. If you decide to bet ₹10000 on Tiger to win the tournament and he manages to do so, you will win ₹200000. So essentially you have won a net profit of ₹190000 + your ₹10000 stake back. As you can see decimal odds are fairly straight forward which is a big part of their appeal.
Need to have American betting odds explained? American moneyline odds are slightly more complex than the previous two but not by much. You will come across numbers put next to the teams that are either accompanied by a positive (+) sign or a negative (-) sign. The negative sign will be next to the team considered to be the favourite and the positive sign will be next to the team tipped as the underdog. The negative sign indicates how much you need to wager in order to win ₹1000 and the positive sign indicates how much you will win for every ₹1000 you stake.
In order to fully have betting odds explained here is an example Bayern Munich are playing against Barcelona in the UEFA Champions League. Barca have moneyline odds of (+200) while Bayern are sitting at (-400). This means that if you decide to bet ₹10000 on Barca and they win the tie, you will walk away with ₹30000 (₹10000 stake + ₹20000 profit). If you wanted to bet on Bayern you would need to wager ₹40000 to make ₹10000. So as you can see, the moneyline odds are not all that complicated, you merely need to become a little more accustomed to them.
Where to Find the Best Odds – Online or Offline?
The idea of betting was of course first established as an offline activity, as far back as the mind can remember. However, as technology has developed, so have our means for betting on sporting events. There are a few reasons why you will find that many people prefer to place their sports wagers online.
The most obvious reason for using online betting instead of your local bookmaker is convenience. The fact that you can check all the odds online and place your wagers with an online bookmaker makes your life a lot easier. No need for you to get in your car and head down to the brick and mortar establishment. You can bet from the comfort of your couch while watching the matches on your flat screen.
Not only can you bet in comfort but you also have all of the betting odds available to you from your laptop or mobile phone. This lets you keep an eye on any changing odds right up to before the match starts. You can also see what different bookmakers online are offering and where the best value is. At your local bookmaker, it’s their way or the highway.
Lastly, you will be able to access all of our betting guides and strategies on your device to better your chances of betting success. So if you are still asking the question “what do betting odds mean?” you can get the answer right away. We should note that a brick and mortar establishment still has its upside like the general camaraderie between fellow bettors on match day putting their bets. If it’s a race track there is a certain quality to the atmosphere of excitement that these establishments provide.
At the end of the day, it is up to you to decide which you prefer, some bettors like to get in a healthy mix of both online and offline betting. But in terms of finding the best value odds, we would go with online betting.
Try These Betting Strategies to Improve YOUR Odds
There are a few popular betting strategies that you can use when trying to make the most of the odds on any given fixture. Here are two that our team at Betastic think are particularly favourable:
Matched Betting Strategy
A matched betting strategy is basically where you try to cash in on a bookmaker’s running promotion or bonus for an extra bet. You will generally receive your extra bet to the value of your initial deposit. You then place your initial deposit down as a bet on one set of odds for a team to win. You use the extra bet you received on the opposite result’s odds. You may not necessarily receive a massive win but it ensures that you walk away with something. This is sometimes called no risk matched betting India.
Arbitrage Betting Strategy
The arbitrage betting strategy is a bit more complex and requires you to place bets with two different bookmakers. What you do is, place your initial bet on fixed odds with one bookmaker backing a team to win (known as back betting). Then place a lay bet (betting on a team to lose) with one of the best betting exchanges on the same team you backed. Typically, you will bet more on the team you backed and less for the lay bet you wagered. This can be a profitable betting strategy when used correctly.
Conclusion – Increase Your Chances by Understanding Odds
That concludes our betting guide for how betting odds are calculated. We hope that you have learned something from our guide and can now assuredly answer the question of what do betting odds mean. Always keep in mind how betting odds are calculated, as it will help you to better understand the dynamics of certain matches and who the favourites are.
Now you’ve had betting odds explained, you may then ask yourself, how does cash out betting work? Check out our guide to add even more knowledge to your gambling repertoire.