What Do Odds Mean in Sports Betting And How To Understand Them

Every sports betting odd tells a story—of potential profit or costly mistakes. While basic math works for small-scale betting, precision becomes critical when handling thousands of bets across multiple events.

Why Precision Matters
Even a single percentage point in your odds structure can mean the difference between substantial revenue or significant losses. That’s why understanding sports betting odds is essential before entering this space.

Ready to dive in? Let’s start our Betting Odds Masterclass.

What Do Odds Mean in Sports Betting?

Betting odds serve as a pricing system, showing:

1. Potential payouts for bettors.
2. Probability of an event happening.

Example: Manchester City vs. Brighton

• Man City at -150: Bettors must wager $150 to win $100. This reflects their higher likelihood of winning.
• Brighton at +130: A $100 bet wins $130, indicating Brighton is the underdog.

Quick Guide to Odds:

• Negative Odds (-150): The favorite. Bettors wager this amount to win $100.
• Positive Odds (+130): The underdog. A $100 bet wins this amount.
• Even Odds (100): Both teams are equally matched.

Key Objectives for Operators

When setting odds, operators must:

1. Attract bets on both sides.
2. Build in a profit margin.
3. Reflect accurate probabilities.
4. Protect against major losses.

Set odds too high, and you’ll lose players. Set them too low, and you’ll erode profits. The goal is to strike a balance where margins are healthy, and players remain engaged.

Types of Odds Explained

Odds formats vary by region but serve the same purpose. Let’s break down the three main types:

1. Decimal Odds

• Widely used in Europe, Australia, and online platforms.
• Shows total return per unit wagered.

Formula:

• Total Return: Stake × Decimal Odds
• Profit: Stake × (Decimal Odds - 1)

Example:

• Odds: 2.00
• Bet: $100
• Total Return: $100 × 2.00 = $200
• Profit: $100 × (2.00 - 1) = $100

2. Fractional Odds

• Common in the UK, represented as fractions (e.g., 5/1 or 9/2).
• The numerator shows potential profit; the denominator is the stake required.

Formula:

• Profit: Stake × (Numerator ÷ Denominator)
• Total Return: Profit + Original Stake

Example:

• Odds: 5/1
• Bet: $100
• Profit: $100 × (5 ÷ 1) = $500
• Total Return: $500 + $100 = $600

3. American Odds (Moneyline Odds)

• Popular in the U.S., uses "+" and "–" signs to indicate underdogs and favorites.

For Favorites (-):

• Shows the amount to bet for a $100 profit.
• Formula: Profit = (100 × Stake) ÷ |American Odds|

For Underdogs (+):

• Shows the profit on a $100 bet.
• Formula: Profit = (American Odds × Stake) ÷ 100

Examples:

• -150: Bet $150 to win $100.
• +200: A $100 bet wins $200.

Common Betting Types

Understanding bet types is crucial before setting odds. Here are the most common ones:

1. Moneyline Bets

• The simplest type: bet on who will win.
• Example: Arsenal (-150) vs. Newcastle (+200).

2. Point Spread Bets

• Levels the playing field by giving one team a handicap.
• Example: Warriors (-5.5) vs. Celtics (+5.5).

3. Over/Under Bets (Totals)

• Bet on the total points or goals scored, regardless of the winner.
• Example: Liverpool vs. Chelsea, total set at 2.5 goals.

4. Parlay Bets 

• Combine multiple bets for higher rewards.
• Risky: one incorrect pick, and you lose the entire wager.

Wrapping Up

Sports betting odds are the language of betting. Once you understand:

• How favorites and underdogs work,
• The different odds formats,
• Which bet types suit various scenarios,

You’ll be better equipped to balance fair odds, protect your margins, and keep players engaged.