How Betting Odds Work: A Complete Beginner's Guide

Quick Answer: What Are Betting Odds?

Betting odds tell you two things:

1. How likely something is to happen (probability)
2. How much you’ll win if it does (payout)

Sportsbooks set odds based on betting patterns and add their fee (the “vig”). Odds aren’t predictions—they’re market prices based on how people are betting.

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American Odds (Plus/Minus Signs)

American odds use + and - signs. You’ll see these in the US.

Sign	Meaning	Example	What It Means
-110	Favorite	Team A -110	Risk $110 to win $100
+150	Underdog	Team B +150	Risk $100 to win $150
+100/-100	Even money	Either team	Risk $100 to win $100

Real-World Examples

Example 1: Betting on a favorite

Odds: Kansas City Chiefs -140
Your bet: $140
If they win: $100 profit + $140 back = $240 total

Example 2: Betting on an underdog

Odds: Houston Texans +180
Your bet: $100
If they win: $180 profit + $100 back = $280 total

Same bet in different formats:

• American: +180
• Fractional: 9/5
• Decimal: 2.80

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Fractional Odds (Common in UK/Horse Racing)

Fractional odds look like 5/1, 10/3, or 2/1. The first number is profit, second is your stake.

Odds	What It Means	$10 Bet Wins
5/1	5 to 1	$50 profit
2/1	2 to 1	$20 profit
10/3	10 to 3	$33.33 profit

Easy Math

To calculate your profit:

Profit = Stake × (First Number ÷ Second Number)

Example with 5/1 odds:

$10 bet × (5 ÷ 1) = $50 profit
Total return = $50 profit + $10 stake = $60

Same bet in different formats:

• Fractional: 5/1
• American: +500
• Decimal: 6.00

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Decimal Odds (Common in Europe/Australia)

Decimal odds show your total return, including your original stake. This makes calculating payouts easy.

Odds	$10 Bet Returns	Profit	Total Return
1.50	$15	$5	$15
2.00	$20	$10	$20
3.50	$35	$25	$35

Quick Math

Profit = Stake × (Odds - 1)
Total Return = Stake × Odds

Example with 2.50 odds:

Profit = $10 × (2.50 - 1) = $15
Total Return = $10 × 2.50 = $25

Same bet in different formats:

• Decimal: 2.50
• American: +150
• Fractional: 3/2

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Converting Between All Three Formats

American	Fractional	Decimal	Quick Conversion Notes
-110	10/11	1.91	Risk 11 to win 10
+150	3/2	2.50	Win 150 on 100 risk
+200	2/1	3.00	Double your money
-200	1/2	1.50	Risk 2 to win 1
+300	3/1	4.00	Triple your money
+100	1/1	2.00	Even money

Conversion formulas:

• American to Decimal: (100 ÷ (|American| + 100)) + 1 for positive, (100 ÷ (|American| + 100)) for negative
• Fractional to Decimal: (First ÷ Second) + 1
• Decimal to Fractional: (Decimal - 1) converted to fraction

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Implied Probability: What Odds Are Really Saying

Odds represent implied probability—the percentage chance the sportsbook assigns to each outcome.

American Odds to Probability

For negative odds (-110):

Probability = |-110| ÷ (|-110| + 100) = 110 ÷ 210 = 52.4%

For positive odds (+150):

Probability = 100 ÷ (150 + 100) = 100 ÷ 250 = 40.0%

Fractional Odds to Probability

For 5/1 odds:

Probability = Second ÷ (First + Second) = 1 ÷ (5 + 1) = 16.7%

For 2/1 odds:

Probability = 1 ÷ (2 + 1) = 33.3%

Decimal Odds to Probability

For 2.00 odds:

Probability = 1 ÷ 2.00 = 50.0%

For 3.00 odds:

Probability = 1 ÷ 3.00 = 33.3%

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Odds vs. Probability: The Reality Check

True Probability	Fair Odds	Typical Sportsbook Odds	Implied Probability	Your Edge
50% (coin flip)	+100/-100, 1/1, 2.00	-110 vs -110, 10/11 vs 10/11, 1.91 vs 1.91	52.4% each	-2.4%
33% (1 in 3)	+200/-200, 2/1, 3.00	+180 vs -220, 9/5 vs 11/10, 2.80 vs 2.45	36% vs 31%	-3% to +2%
25% (1 in 4)	+300/-300, 3/1, 4.00	+275 vs -350, 11/4 vs 2/7, 3.75 vs 2.86	27% vs 26%	-2% to +1%

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Which Odds Format Should You Use?

American: Best if you’re in the US. The plus/minus system makes it easy to see payouts at a glance.

Fractional: Best for horse racing or if you’re in the UK. Traditional and shows profit-to-stake ratio clearly.

Decimal: Easiest for calculating total returns. Used in Europe, Australia, and Canada. Just multiply your stake by the decimal.

My recommendation: Learn all three formats. Sportsbooks show different odds, and being able to convert mentally helps you spot value.

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Betting Odds Glossary

• Moneyline: Straight bet on who wins
• Point Spread: Bet on margin of victory (creates ~50/50 chance)
• Total (Over/Under): Bet on combined score
• Juice/Vig: Sportsbook’s fee (typically 4-5%)
• Even Money: +100/-100, 1/1, 2.00 (equal chance)
• Favorite: Team with negative odds, expected to win
• Underdog: Team with positive odds, expected to lose
• Push: Tie (your bet is refunded)
• Hook: Half-point (7.5 instead of 7) that prevents pushes

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Responsible Gambling Context

Understanding odds is the first step, but it’s not enough to bet responsibly.

Set Your Limits Before You Start

• Budget: Only bet what you can afford to lose
• Time limits: Set time limits to prevent chasing losses
• Never borrow: Don’t bet money you don’t have
• Track everything: Keep a record of all bets

Recognize Warning Signs

• Chasing losses: Betting more to recover losses
• Betting when upset: Using gambling to escape problems
• Neglecting responsibilities: Missing work or family time for betting
• Lying about betting: Hiding activity from loved ones

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Summary

Odds tell you probability and payout in one number. American odds use +/- signs, fractional odds use profit-to-stake ratios, and decimal odds show total return.

Key conversions to memorize:

• -110 = 10/11 = 1.91 (52.4% implied)
• +100 = 1/1 = 2.00 (50% implied)
• +200 = 2/1 = 3.00 (33.3% implied)
• -200 = 1/2 = 1.50 (66.7% implied)

The “vig” means you’re always paying a small fee—this is why most bettors lose long-term. Understanding odds takes 10 minutes. Betting responsibly takes discipline.