Understanding Betting Odds: Detailed Explanation for Beginners

What are Betting Odds?

Betting odds are what bookmakers use as a way to represent how likely a particular event is to occur. They are the ratio between the amount wagered by the bookies and the punter. For example, 3/1 means that the bookie is wagering 3x what the bettor has. This would mean that if you were to win this bet, you would take home three times your wager.

Odds link directly to probability, providing you with the ability to predict the outcome of an event. Low odds imply that betting sites believe something is more likely to happen and, therefore, offer a lower payout on a bet placed should it win. This is vice versa with higher odds. 

Understanding how betting odds work is crucial to placing informed bets and potentially getting you winning selections.

Types of Betting Odds in the UK 

There are several different types of betting odds that bettors can expect to come across during their time at various betting sites. We have taken a look below at the three main ones you should be aware of.

Fractional Odds

These are the most commonly used odds in the UK and the ones bettors can expect to regularly come across. In short, they display the odds of something happening in the form of a fraction.

The number on the right of the fraction is what you would need to stake in order to win the number on the left - easy, right? Let’s take a look at an example:

Odds displayed at 3/1 show that if you place a £1 bet on these, you would receive £3 back. You would also receive your original £1 stake back, totalling £4. But most bookies will automatically calculate and show you your potential winnings before you place your bet. 

Decimal Odds

Another way to show odds is as a decimal. Some sites in the UK may display these, while most will offer bettors the option to see odds on a site as either a fraction or a decimal. 

To calculate your potential winnings from decimal odds, simply just multiply your stake by the odds! So, if you were to bet £1 on odds at 5.00, you would win £5 if your bet was a success. Simply do 100 divided by the decimal. Take a look below:

• Odds of 5.00 would mean the probability is 100/5, which is 20%.

• Odds of 10.00 would be 10%.

American Odds

It can also be possible to come across some betting sites in the country that display their odds the American way.

This is when a ‘+’ or a ‘-’ is used, and is mainly used for events taking place in the US such as American Football and basketball.

They work in a slightly different way, so if the odds have a ‘+’ sign, the bet is odds against. A ‘-’ sign the bet is odds on.

So if you are betting on an underdog, a positive number is shown. This shows the profit you would get if you bet £100. Betting on a favourite would see the number shown as a minus. We’ve included an example below:

• +250 means if you bet £100 you would win £250.

• -170 means you would have to place £170 in order to win £100.

How Betting Odds Reflect Probability

Betting odds represent the likelihood of any particular event or outcome occurring. The odds are the ratio between the amount that is wagered by the bookmaker and the amount by the punter. 

So if the odds of an outcome to happen are, say, 7/1, this means that the bookies are staking seven times the amount that the better has. If the bettor then wins, they will take 7x their bet from the bookmaker plus their initial stake. So if you were to bet £1 on odds of 7/1, you would receive £8 back should your bet win!

If you want a quick and easy way to convert fractional odds into implied probability, use these simple calculations below:

Now that this makes more sense, we can look at how the bookies factor in their profit margin.

It is not uncommon for sites to adjust odds so that the total implied probability is over 100%, as this ensures a profit for the bookmaker regardless of the outcome of the event. An example? 

A horse race with multiple runners would see a true probability of up to 100, but a bookmaker may set odds that imply a probability of 110 or more. If the true odds are 4/1, it could see 9/2 be offered instead. This slightly reduced the payout but increased the bookmaker's edge.

This margin is what allows bookies to stay profitable and cover risks and operational costs while paying out winnings. These margins only tend to be most noticeable in popular markets such as horse racing and football. 

How to Calculate Potential Returns

Do you want to know how you can calculate your potential returns to help make choosing the best odds easy? We’ll show you how:

First up are fractional odds, the most common ones you can expect to find at various bookmakers. Don’t worry - this is really simple! 

• 9/1 - for every £1 you bet, you will win £9

• 4/1 - for every £1 you bet, you will win £4

• 1/1 - for every £1 you bet, you will win £1

• 1/4 - for every £6 you bet, you will win £1

Say you were placing a bet on the football, for Manchester City to beat Arsenal 2-1 at odds of 14/1, staking £10. 

Using the examples above, you can work out that for every £1 you bet, you would win £14, so multiply it by 10 and you would get £140 if your bet was to win!

Now for the decimal odds - again, super simple! For those who like a formula: winnings = (odds * stake) - stake.

• 9.0 - (9.0 * £10 stake) - £10 stake = £80 winnings.

• 4.0 - (4.0 * £10 stake) - £10 stake = £30 winnings.

• 2.5 - (2.5 * £10 stake) - £10 stake = £15 winnings.

• 1.25 - (1.25 * £10 stake) - £10 stake = £2.50 winnings.

Referring back to the above example, 14/1 would be 15.0 in decimal odds. 

Using the calculation examples we have provided, 15.0 * £10 stake - £10 = £140 in winnings!

Various online calculators and tools are also available that can make this even easier for beginners or for those who simply want to save themselves the maths! 

Common Mistakes to Avoid with Betting Odds

Some really easy mistakes that can be made, especially when you are new to betting, can be avoided if you take your time. We have explored some common mistakes we have come across below to help you avoid them

Not Fully Understanding How Odds Translate To Probability

Bettors who are not entirely confident in translating the odds they are betting on into the probability of a selection winning can run the risk of miscalculating potential winnings and expenditures, which can result in going over budgets or spending limits.

Overestimating Potential Returns Without Considering Risk

Another error that can be made is bettors overestimating the return they could get their hands on and getting carried away. Ensure to pay attention to what you are wagering and acknowledge the risks there are such as your bet not winning or things such as wagering requirements.

Not Comparing Odds Across Bookmakers

A crucial thing to do before going with a bookmaker is to look at a few and compare the various odds that are on offer. This can help to ensure you are getting the best possible value for your money instead of simply going with the first site you see.

Top Tips for Getting Started with Betting

Before diving head first into placing your bets with a bookmaker, there are a few key things to keep in mind. To help you have the best possible experience starting out, we have provided some top tips from our experts, below.

• Start Small - Practice with minimal stake amounts such as £1-2 until you are happy and comfortable with how the process works. Once you feel comfortable, you can raise your bets to whatever is in your budget and look at how it changes your returns.

• Focus on simple bets - Before exploring anything too complex, try out placing easy wagers such as win bets, leaving the likes of accumulators until you have some more experience. 

• Always use licensed bookmakers - This is essential to you having a safe betting experience and knowing that your information and transactions are secure. Look for a sites UKGC license before signing up so you know the site is regulated.

• Bet Responsibly - Make sure that before you start with a bookmaker, you have set yourself limits such as a budget that you know you can afford to spend on your betting activity. 

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Responsible Gambling

The most important thing to remember when using any online betting platform is to make sure you are practicing responsible gambling wherever possible. Ensure that you are using a licensed and reputable bookmaker for a safe betting experience. Set yourself limits for your spending that you can stick to, not spending more than you can afford, and avoid chasing any losses. This can help to make sure that your betting remains a bit of fun and enjoyment! There are also various repsonsible gambling tools avaialbe at bookmakers that you can take advantage of such as deposit limits, time limits, reality checks, and self-exclusion tools. If you or someone you know feels that they would benefit from further support regarding online gambling, there are some orgnaisations and helplines offering advice such as GamCare and GambleAware that can be contacted via your chosen bookmaker.