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Betting.net / Betting Guide / How do Bookmakers Create Betting Odds? Betting Odds Insider 2024

How do Bookmakers Create Betting Odds? Betting Odds Insider 2024

Publish Date: June 18, 2021
Fact checked by: Jesse M Cox

Here’s everything you need to know about how sports betting odds work

New to gambling? Confused about odds and how they work? Not to worry, you’ve reached the ideal destination to have betting odds explained to you in full detail!

From how to read betting odds, to how they work and the purpose they serve, our betting authorities provide a complete 101 guide to betting odds. If you’re reading this as a complete beginner, we can say with confidence that by the time you complete your tour of the world of betting odds, you’ll be well on your way to becoming an expert yourself!

Betting odds explained – key points

  • A numerical ratio that displays the probability of something happening
  • Shows how much you stand to win on your bet
  • Three main odds formats used worldwide
  • Moneyline (American), decimal and fractional odds
  • Used in both gambling and statistics

Betting odds – a quick explanation

Odds are a numerical display that shows the reader the likelihood of a particular outcome from being realized. You can use odds to calculate the implied probability of something happening as a percentage. More importantly as a gambler, the odds displayed can be used to easily calculate how much you stand to win with the money that you have wagered. Knowing how odds work is key to understanding sports betting.

Odds have been around for hundreds of years, with the earliest recorded version of them being dated back to Shakesperian times in England. In the modern age of gambling, betting odds are big business, with bookmakers investing massive sums of money and manpower to help calculate and change odds in real time.

How do betting odds work?

There are three different types of betting odds formats that are most commonly used around the gambling world today. Namely, these are moneyline (American), decimal (European) and fractional (UK). Each of these three odds formats look very different, however the purpose they serve is exactly the same. As mentioned above, they serve to show you the probability of something happening alongside the amount of money you stand to win.

How to use betting odds as a gambler

As a gambler you can use betting odds to see if a bet has a good enough value, balanced with a realistic chance of coming up. For example, if you’re looking at a bet on Tampa Bay Bucs to win at odds of -250, the implied probability of them winning is 71.4% (we’ll explain how to calculate this later, don’t worry!). However, you’d only stand to win a profit of $10 with a $25 dollar bet. This means there’s not a lot of value in the bet.

At the other end of the scale you have longshot bets, sometimes known as “mug bets” in the United Kingdom. You might see an English FA Cup game where Cheltenham Town are playing Manchester City. In such a game, Cheltenham Town would likely be offered at odds of around +800, meaning you would stand to win $80 profit for a $10 bet. This is pretty good value, but the chance of that outcome actually happening are less than 12% – making it more of a lottery, than a smart bet.

That’s why it’s all about finding a balance – you want to use the odds to find a valuable bet that still has a realistic implied probability of coming true. How can we do this? We’ll get to that a little later on in our sportsbook guide here at Betting.net.

How the bookies use betting odds

As gamblers, we need to use the betting odds in order to find valuable bets that are going to increase our chances of winning. For the bookies, it’s essentially the same. The only difference is that they create the odds. The balance that they want to strike is to offer odds that are realistic and protect their profits, but that also are attractive enough to entice customers to place bets.

For both sides it’s about balance, and can be likened to any retail transaction – the vendors want to sell a quality product that makes them a profit while keeping the customer coming back. Meanwhile us as consumers want to find value in the product we’re paying for.

How to read betting odds – different formats

As we already mentioned above, there are three different odds formats that are most commonly used throughout today’s gambling world; moneyline, decimal and fractional. At the of the day, all three formats function more or less the same and serve the exact same purpose. However, how you read each of the three of them is very different.

To the untrained eye, betting odds may look like random numbers that make very little sense. However, once you understand how they work, you’ll realise they are pretty logical and simple to read. We’ve provided you with a breakdown of how each of the three most common odds formats function below.

American odds – moneyline explained

Moneyline is the most commonly used format in the US and North America, hence why it’s sometimes referred to as “American odds”. Once understood, moneyline odds are perhaps the easiest and quickest to read for gamblers, as this format was tailor-made with betting in mind. There are two different types of numbers to be aware of when it comes to understanding odds in moneyline form – positive and negative.

How to read betting odds – positive numbers

With positive number odds, the numerical value displayed tells you how much profit you would stand to win with a $100 bet. For example, odds shown at +200 tells you that you would make a $200 profit from a $100 bet should your bet come up. This means that your total returns for this bet would be $300 (your $100 stake plus your $200 profit).

Positive number odds offer better value, but a lower implied probability of happening (always less than 50%).

Negative number odds

With negative number odds, the numerical value displayed tells you how much you would have to bet in order to win $100. For example, odds of -200 tells you that you would need to stake $200 in order to make a $100 profit. Your total returns in this case would be $300, the same as the above positive number example, however you would have to risk twice as much and your profit is halved.

Negative number odds therefore offer much less value, but have a higher implied probability of happening (50% or greater).

Betting odds explained – decimal format

Decimal odds are the most commonly used in mainland Europe, Australia and New Zealand. They are perhaps the most mathematically sound and logical of the three odds formats. With decimal odds the probability of the two possible outcomes is displayed as a ratio – for example 2.1.

To calculate your potential winnings with decimal odds, simply multiply your stake by the odds. For example, the winnings for a $100 stake at odds of 2.1, your winnings would be calculated thus; $100 x 2.1 = $210. This calculation gives you your total returns including your $100 stake, not just your profit.

You can calculate the implied probability with decimal odds by dividing the odds by one and multiplying by 100. In this case it works as follows: (1 ÷ 2.1) x 100 = 47.6. There are plenty of online odds and betting calculators that can help you with such calculations.

How do betting odds work – fractional odds

Fractional odds is the oldest and most traditional odds format around, and to date is still the most commonly used in the UK and Ireland. In the US, you may still find them used at horse and greyhound tracks. Fractional odds are – shock-horror – displayed as a fractions, with the two numbers representing the two possible outcomes of an event e.g. 2/1.

Basic fractional odds are simple to understand at a glance, but can become more complex when bigger numbers are involved. Moneyline and decimal odds were created as more simpler alternatives, with many gamblers viewing fractional odds as being somewhat dated. Still, the traditionalists stand by fractional odds and it’s certainly worth understanding how they work.

To calculate your potential profit with fractional odds, you multiply your stake by the top number and then divide it by the bottom number. If we use a $100 stake at 2/1 odds as an example, you’d calculate it thus – ($100 x 2 = $100) ÷ 1 = $200. To calculate the percentage, you divide 100 by the total of the two numbers and then divide it by the bottom number – 100 ÷ 3 = 33.3% x 1 = 33.3%.

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Betting odds explained – making them work for you

Now that you know how to read betting odds, the next step is making them work for you. There are a couple of ways you can do this, from shopping around to using your own knowledge and timing to try and beat the bookies. We’ve explained a couple of the key things that you can do below.

How do betting odds work – shopping around

There are multiple online sportsbooks around today that can easily be accessed and signed up to. As a result, there are also real time odds comparison tools that you can make use of – such as the one we have right here at Betting.net.

When looking to buy anything from flight tickets to a new pair of jeans, you would generally always shop around right? Well it should be no different with betting odds, and it’s never been easier to do so. Our comparison tool updates odds in real time from multiple bookies, meaning that you can find the best odds being offered on a certain line at any moment in time.

Using your knowledge to beat the bookies

To put this into practice, you really have to focus on sports that you know inside and out. All of the major betting brands across the world invest heavily in professionals who create and update their odds live and in real time.

However, if you see a bit of news or get some inside info that you think could have an effect on the outcome of a sports game, then jump on a comparison site to check out the odds – you might’ve realised something before the bookies and therefore could find yourself a valuable little bet.

Using tipsters and fellow bettors’ knowledge

Another way that you can give yourself a chance of finding the best odds and valuable bets is to follow tipster articles and social media accounts. Additionally, you can also join forums and communities of fellow bettors you shop around and share the bets and odds that they have found.

We’ve almost finished our guide on how to read betting odds and make them work for you, but we’ve got so much more to offer you guys here at Betting.net. In terms of betting guides we have everything that a budding online sports bettor or casino gambler could want – of all experience levels too. From here, we recommend going on to read our sports betting point spread guide and betting bankroll management.

Conclusion – how do betting odds work

So you now know how betting odds work, how to read them and how best use them to your advantage. The next step is to dive in and use the odds comparison tool at Betting.net in order to find the best odds for your desired betting lines. Just remember that what you’re almost always looking for with betting odds is balance of value vs implied probability. Stick to our guide above, and you’ll definitely get better with time.

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Betting odds explained FAQ

📚How do you read betting odds?

There are three common odds formats used around the gambling world today. Each of the three is read slightly differently but they all serve the same purpose at the end of the day. If you’re looking to have betting odds explained, you can find a guide on how to read all three here at Betting.net.

❓What does odds of +200 mean?

Odds of +200 is an example of moneyline odds, sometimes referred to as “American odds” as it is the most common odds format used in the USA. FInd out how they work right here at Betting.net.

➕How to plus and minus odds work?

Plus and minus odds represent negative and positive number odds and are commonly used in sports betting in the US. Find out more in our sports betting guide here at Betting.net.

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