For those entering the world of betting, it’s essential to understand what odds are and how they work. This is because the meaning of this term is associated with the idea of a specific event occurring.
Learn from this article how odds work, what types exist, and how they are calculated.
What are odds and what are they used for?
Know that odds correspond to the odds for each team in a bet for a specific game. In other words, they indicate the probability of an event happening in a match or competition, whether it’s football, basketball, volleyball, or a horse race.
It’s interesting to note that the odds are lower the higher the chances of a team or athlete winning. Usually, betting houses use the following criteria:
- Current player or team ranking;
- Injured players;
- Most recent results;
- Home or away game.
How do odds work in practice?
Usually, betting houses analyze and calculate the possibilities of a specific event. For example, in a game between Brazil and Costa Rica, the odds are:
| Outcome | Odds (for each R$ 1 bet) | Probability |
| Brasil | 1,22 | 81,96% |
| Costa Rica | 13,00 | 7,69% |
| Tie | 6,00 | 16,66% |
| Total | 106,31% |
In the case of Brazil, the odds are 1.22 to win against Costa Rica. In other words, for every R$ 1.00 bet, there’s a potential return of R$ 0.22 for the winning bettor, which is the profit. In fact, there’s an 81.96% probability of Brazil winning the game.
On the other hand, for Costa Rica, the odds are 13.00 to win against Brazil. Indeed, this is a very tempting outcome, as for every R$ 1.00 bet, there’s a potential return of R$ 12.00. The probability of winning the game is 7.69%.
For a tie situation, the odds are 6.00, which means for every R$ 1.00 bet, there’s a potential return of R$ 5.00 and a probability of 16.66%.
It’s important to highlight that there’s also the bookmaker’s margin or juice, meaning the commission that the betting house will receive. Because of this, the total probabilities exceed 100%, totaling 106.31%.
This 6.31% percentage is retained by the betting houses as they are intermediating the transactions. Generally, this percentage ranges from 3% to 6%.
What are the types of odds?
Odds can be presented in different ways in betting houses, and it’s important to understand them to know which to use. Take a look below:
Decimal Odds
This is the simplest format and is almost standard in the country, with a straightforward calculation to transform it into probability. That is, you simply divide R$ 1.00 by the odds and multiply by 100.
To find out the amount you’ll win for each bet in decimal format, you need to multiply the odds by the bet amount. For example:
| Outcome | Odds (for each R$ 1 bet) | Bet amount | Win | Probability |
| Brazil’s Victory | 1,22 | 10,00 | 2,20 | 81,96% |
| Costa Rica’s Victory | 13,00 | 10,00 | 120,00 | 7,69% |
| Draw | 6,00 | 10,00 | 50,00 | 16,66% |
Fractional Odds
This type of odds is more commonly used in Europe and involves a slightly more complex calculation presented as a fraction. For example, odds of 2/9 indicate an expected return of R$ 2.00 for an R$ 9.00 investment.
In the case of a R$ 10.00 bet with odds of 2.9, the profit potential is 0.22%, resulting in a gain of R$ 2.20. To calculate the probability, simply add the numbers 2 and 9 and divide by the total invested. The result would be 81.96%.
American Odds
This type is commonly used in events like basketball, American football, boxing, and UFC fights. It distinguishes itself by using both positive and negative numbers. For example:
- For -450 odds, you would need to bet R$ 450.00 to win R$ 100.00.
- For +500 odds, you would need to bet R$ 100.00 to win R$ 500.00.
To calculate the percentages, use the following formulas:
- Negative Odds: odds / (100 + odds)
- Positive Odds: (odds + 100) / 100
With all the information presented, it’s now easier to understand what odds are, the types used, and how they are calculated.
