Your Guide To Betting Odds

To be able to recognise the presence of good value you need to be very comfortable with betting odds.

The format that I use is a decimal format - if this is different to what you are familiar with don't worry - the principles are the same regardless of which way the betting odds are expressed. For those familiar with odds written in the old style - eg 10-1 or 5-2 - note that the only difference is that decimal odds include your stake in the price. So the equivalent of 4-1 is $5.00 (not $4.00) and the equivalent of 9-4 is $3.25 (not $2.25).

Each time you see odds, you should be aware that, expressed another way, they indicate the precentage chance of something happening. For example, let's think of a baseball game in which Side A is paying $3.00 to win and Side B is at $1.40.

To convert the odds to percentages divide 1 by the price and multiply by 100. The results are as follows:

Side A: 1/3 * 100 = 33.3%
Side B: 1/1.40 * 100 = 71.4%

So, according to the odds, side A is a 33.3% chance of winning and side B is a 71.4% chance of winning. Note that when you add them together you get 104.7% and not 100%. The extra 4.7% is the bookmaker's profit margin.

This is what makes it so much harder for you to win - in order to make the odds add to only 100% one way would be for side A's price to move out to $3.50. If this were the case then the percentage chance would be 1/3.5 * 100 = 28.6%. If you add this to side B's unchanged percentage you get 28.6% + 71.4% = 100%. So, if the bookmaker was not trying to make a profit you'd get $3.50 instead of $3.00 for side A.

Get into the habit of being able to think of the odds in this way. Most people don't know how to do this. If you asked someone to frame sport odds for an event they might quote you odds that when converted to percentages and added don't even reach 100%. This is a sign they don't have the awareness that they should.

It can also be a quick rule of thumb for you. If you are about to back a horse that is paying $2.00 to win ask yourself 'do I really think this horse is a 50% chance of winning?' If the answer is no, then don't waste your money. If the answer is 'yes, in my opinion it is a much better than 50% chance of winning' then you are getting good value at $2.00.

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