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How Do Odds Work in Betting? A Beginners Guide to Probability
Betting allows you to predict the outcome of an event for the chance to win money. But before you start betting, it’s very important to know how odds and probabilities work.
Let’s find out together about odds and how they work in betting on sports, casino games, lotteries and more.
What are Betting Odds?
Whether you're placing a bet on a soccer match, casino game like Roulette or even a Lucky Numbers draw, there are different odds and probabilities at play. The numbers you see on the odds screen represent the probabilities of certain events happening, but what does that mean?
What is Probability?
You can think of probability as the chance of something happening. In betting terms, it could be anything from a team winning a soccer match to a roulette ball landing on '9 Black'.
As a punter, you need to weigh up these probabilities, which are represented as odds and decide whether you want to place a bet on the outcome.
How Betting Odds Work
Betting odds do two things at the same time. They tell you how likely an event is to happen, and also how much money a winning bet on that outcome will return. In South Africa, odds can be shown on betting sites as either fractions or decimals, but they both mean the same.
Fractional Odds Example
To use an example, odds like 4/1 are a fractional representation of probability. Seeing these fractions might take you straight back to the maths classroom at school!
But you can easily use these two numbers to calculate how likely an event is to happen (the same as the probability we mentioned earlier).
To better explain probability using a formula, we will replace the numbers with letters so that 4/1 becomes A/B.
Probability % = B / (A+B) x 100
Odds of 9/1 can be calculated as 1 ⁒ (9 + 1) = 0.10. This means there is a 10% chance the event will happen.
Odds of 4/1 can be calculated as 1 ⁒ (4 + 1) = 0.20. This means there is a 20% chance the event will happen.
Odds of 1/1 can be calculated as 1 ⁒ (1 + 1) = 0.50. This means there is a 50% chance the event will happen.
Odds of 1/4 can be calculated as 4 ⁒ (4 + 1) = 0.80. This means there is a 80% chance the event will happen.
Hopefully, you now more clearly understand what betting odds actually represent in real-life terms.
How much can I win from my bet?
To use the fractional odds example, betting odds of 4/1 means that for every R1 you bet, you will win R4.You always get your stake back on winning bets, so your total return is R5.
Now let's flip those odds around to see how that would change your payout. Betting odds of 1/4 mean that for every R4 you bet you will win R1.
Therefore you need to bet a lot more money on smaller odds to get the same return as you need to bet on bigger odds.
Decimal Odds Example
Most old school punters like to work with fractions, but decimals are becoming a more common way for players to view betting odds. They also make things easier when working out how much money you can win from a bet.
Now let's use another formula to work out the probability of an event happening using decimal odds.
Probability % = 1 / (Decimal Odds) x 100
Odds of 10.0 can be calculated as 1 ⁒ (10.0) x 100 = 10. This means there is a 10% chance the event will happen.
Odds of 5.0 can be calculated as 1 ⁒ (5.0) x 100 = 20. This means there is a 20% chance the event will happen.
Odds of 2.0 can be calculated as 1 ⁒ (2.0) x 100 = 50. This means there is a 50% chance the event will happen.
Odds of 1.25 can be calculated as 4 ⁒ (1.25) x 100 = 80. This means there is a 80% chance the event will happen.
Using decimal odds, here's how to work out how much you can win from your bet:
Odds of 9.0 can be calculated as (9 x R10 stake) – R10 stake = R80 winnings.
Odds of 4.0 can be calculated as (4 x R10 stake) – R10 stake = R30 winnings.
Odds of 2.5 can be calculated as (2.5 x R10 stake) – R10 stake = R15 winnings.
Odds of 1.25 can be calculated as (1.25 x R10 stake) – R10 stake = R2.50 winnings.
Still don't understand how odds work? Here's what to do!
Don't worry if you don't understand how betting odds work yet, you'll get there soon enough! In the meantime, there's an easy way to see your potential winnings for any bet:
1️⃣ Find the bet you want to place and click the odds.
2️⃣ Now go to your betslip and enter your stake (the amount you wish to bet).
3️⃣ Look at the amount next to "Possible/Potential return". This is how much your bet will return if it wins.
For more about online sports betting and casinos in South Africa, visit the Betting Guide homepage where you can find bookmaker reviews, promotions, betting tips and more.