Guide to Calculating Betting Odds

Guide to Calculating Betting Odds

betJACK Training Camp
10 months ago
8 min read
Joe Burrow and the Cincinnati Bengals offense takes the field during the AFC Championship game in Kansas City. The Bengals won this game and will represent the AFC in Super Bowl 56.

Reading and calculating betting odds isn’t easy for beginners. There’s a lot to take in when you look at a sportsbook, so it can be tricky to work out how much you’re likely to win if you bet on a particular outcome.

We’ve put together this comprehensive guide that explains in detail how to calculate sports betting odds. We take a deep dive into the American moneyline odds system before briefly touching upon the fractional and decimal odds that are popular in Europe.

Once you have read through the article, you will be confident about reading and understanding sports betting odds and ready to make some serious profit. 

If this still sounds complicated, take a look at our Beginner Guide to Sports Betting, which explains all the basics.

How do you Read Sports Betting Odds?  

When you place a bet, you do so at odds defined by the sportsbook. The odds will reflect the chances of your sports prediction happening on the field of play. Long/high odds suggest it is unlikely, so you get rewarded more if you win. You get short/low odds if your wager backs a favorite. In this case, your returns would be lower.

Primarily, there are three ways in which sports betting odds are displayed:

Let’s look at each of these types of odds, starting with the American moneyline system.

Moneyline Odds

As you’ve probably guessed, American odds are those that you most typically see represented in US markets, and will be the main focus of this article. You will also see American odds referred to as the moneyline.

Once displayed, American odds help you ascertain the favorite and underdog in a particular outcome. The favorite is represented by a (-) number, while the underdog gets a (+) number.

If you wish to bet on the favorite, the number represented indicates how much you would need to bet to win $100.

Conversely, if you bet on the underdog, the number indicated shows how much you can profit if you bet $100. Although this might sound quite confusing, we illustrate this with some super simple examples below.

Recap: In sports betting parlance, the term ‘favorite’ refers to the outcome that the sportsbook believes the most likely to occur. The term ‘underdog’ refers to the outcome that they don’t believe will happen. As such, you stand to make more money if you bet on the underdog, as they will be given better odds.

Moneyline odds examples 

NFL: Cincinnati Bengals (+250) vs. Cleveland Browns (-300)

MLB: Cincinnati Reds (+200) vs. Cleveland Guardians (-250)

NHL: Columbus Blue Jackets (+230) vs. New York Rangers (-320)

The Browns, Guardians, and Rangers are all favorites in their example matchups above. Remember, negative numbers always represent the favorite in sports betting, so you can easily get an idea of the market by taking a look at how the odds are represented.

How to calculate betting odds with the Moneyline system

We’ll now help you with calculating betting odds using our above examples. Taking our NFL matchup to begin with, where the Browns are the clear favorites.

If you think they will beat the Bengals, you would need to wager $300 to return $100. However, if you fancied the Bengals for the upset, a $100 wager would return you $250.

In the MLB example, a $250 bet on the Guardians would return $100, while you could bet $100 on the Reds and see a profit of $200 if they won the matchup.

And finally, in our NHL match, if you fancied the Blue Jackets for the upset, a $100 bet would return you $230, while you would need to place $320 on the Rangers if you wanted to make $100.

While this is all relatively straightforward to understand when you’re using a nice round figure like $100, what happens if you want to bet with other amounts? The good news is that you can use a simple formula, as we introduce below.

Moneyline sports betting formula 

Just before we introduce you to this handy formula, most online sportsbooks make it easy for you to calculate your betting odds, as they have built-in calculators to do the math for you. You simply type in your stake next to the outcome you fancy, and voila, you can see your expected returns.

But supposing you want to calculate your betting odds independently, you can use a relatively simple formula to help you:

Potential profit = stake x (odds/100)

Let’s illustrate this with a new NFL example. Let’s say you fancy the Browns (+180) to beat the Patriots (-200), and you want to bet $30 on the outcome. What’s your potential profit?

First, divide the odds (180) by 100 to give you 1.8. You then multiply 1.8 by your stake (30), which gives you a potential profit of $54.

Remember, in addition to your profit, a winning bet also returns your stake. So, you get an $84 payout if you bet $30 on the Browns to beat the Patriots at odds of +180.

However, it’s important to realize that the above formula is only good for calculating positive moneyline odds. So, what happens if you want to bet on the favorites? You will need to use the following formula:

Potential profit = stake/ (odds/100)

Using the same example as above, here’s how you would work out your returns on a Patriots win. First, take your odds (200) and divide them by 100 – note that you remove the (-) when working out your potential stake. 200/100 gives you 2.

Then, divide your stake ($30) by two, which gives you $15 of profit. As is always the case, a winning bet returns your initial stake in addition to your profits, which would total $45 in this example.

As you can see, a $30 bet on the favorites – the Patriots – will only return $15 of profit, while a $30 bet on the underdogs – the Browns – will return $54 of profit.

You will always find that betting on the underdogs returns more money, as this is precisely how sports betting odds are engineered. But be wary, they’re underdogs for a reason, and they’re not expected to win!

Tip: If you want to bet on the underdogs to increase your potential profit, always research the current form, injuries, and the history of the matchup in question before placing a bet. Underdogs are not supposed to win, so you will lose your bet more often than not. However, researching specific matchups will help you identify patterns and potentially indicate an instance where it makes sense to back the underdog.

What about implied probability? 

One of the most crucial ways to understand how likely a moneyline bet is to occur is to calculate the implied probability. Simply, implied probability refers to the likelihood of an outcome as suggested by the odds given.

The good news is that you can easily convert odds to probability, making it much easier to understand how likely a bookmaker thinks a particular outcome is to occur. This will provide you with an insight into the value of a particular betting market and thus, improve your chances of winning your bet.

Here’s an example to illustrate how to calculate the implied probability of your bet:

Let’s say you fancy the Cleveland Browns (-120) to beat the Bengals (+180) in an upcoming matchup. But what is the implied probability of the outcome? Here’s how to work it out:

Take your odds (120) and divide them by 120 + 100 (220). This gives you an implied probability of 0.545, which you then multiply by 100 to give you a probability percentage of 54.5%.

But what if you favored the Bengals in the matchup?

The way of calculating the implied probability of positive odds in the moneyline is slightly different. You take your odds (180) and add 100 to give you 280. You then divide 100 by 280, which gives you an implied probability of 0.357. When multiplied by 100, this would give you 35.7%.

As you can see, the implied probability of a Browns victory – the favorites – is much higher at 54.5% than the Bengals, who are at 35.7%.   

Ultimately, if the implied probability given is less than your own original assessment of the likely result, then it represents betting value and is worthy of a wager.

Recap: calculating betting odds with the Moneyline system 

The favorites are represented with a (-), while the underdogs are represented with a (+)

In a favorite moneyline bet, the number given indicates how much you will need to wager to win $100

In an underdog moneyline bet, the number given indicates how much a $100 stake will return

The formula for betting on a positive moneyline outcome (the underdog) is as follows: potential profit = stake x (odds/100)

The formula for betting on a negative moneyline outcome (the favorite) is as follows: potential profit = stake/ (odds/100)

Calculating the implied probability of your moneyline is useful, as it allows you to look for value in the sports betting market and ultimately decide whether a bet is worth placing or not

Fractional Odds (UK) 

Now that we’ve explained how to calculate sports betting odds using the American system, we want to briefly touch upon the other two types of odds that you are likely to see listed on a sportsbook. While these aren’t overly common in US markets, it’s still handy to know how they work to avoid confusion.

In the UK, odds are most commonly represented as a fraction. If you’re placing a bet on the English Premier League soccer, you might see odds represented in the following way:

Manchester City (1/6) v Norwich City (12/1)

In the above example, if you fancied Manchester City to beat Norwich City, a six dollar bet would pay out just a one dollar profit. Conversely, if you think Norwich City can win, a one dollar bet would return $12 profit. In this example, Manchester City are heavy favorites. You will note that in the fractional system, (+) and (-) are not used to represent the favorites. 

Tip: In British and European matchups, the home team is always listed first, as opposed to second. So, in the above example, Manchester City are playing Norwich City at home, which increases their odds of winning.

Decimal Odds (Europe & Australia) 

We’ve kept them until last, decimal odds are the most common in Europe and Australian sportsbooks.

The figure quoted alongside an outcome is the exact amount you will be paid if you pick back if you bet a figure of one. If you were to look at the market for the next winners of the UEFA Champions League, for example, you would see decimal odds represented in the following way:

Paris Saint Germain – 5.52

Bayern Munich – 6.06

Manchester City – 6.10

Liverpool – 6.56

Real Madrid – 7.2

If you think that Bayern Munich will win the Champions League, a one dollar bet will return you $5.06 of profit, plus your stake back.

The good news is that many sportsbooks offer you the option of converting the odds to decimals, which can make your life so much easier when trying to calculate your sports betting odds.

The Verdict 

Calculating betting odds can be complex when you’re just starting out, but it gets much easier as you become familiar with the markets and the way the bets are represented. If you are new to betting and calculating the odds,you can always do a trial run with a free to play, there are great benefits to it.

Hopefully, you’re now armed with all the information you need to read and calculate moneyline, fractional, and decimal odds, and can start placing bets that represent excellent value and are likely to return you a decent profit.

Be sure to follow betJACK on Twitter @betJACK for all the latest in sports betting picks, news, and much more!

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