Converting odds into probabilities
Knowing how to convert odds into probabilities can be very helpful. In fact, if you don’t know how to convert them into their respective implied odds, you are not favoring your chances of being a long-term winner in sports betting.
There are three types of odds you might encounter in betting. They all reflect the same aspect, which is the return you will receive by placing a certain amount of money on a bet.
▪️ Decimal odds: Represented as 1.65
▪️ Fractional Odds: Represented as 5/2
▪️ American odds: Represented as -120 or +140
🔘 Conversion of decimal odds
The decimal odds are a simple reflection of the return you will receive for every single unit placed. For example, suppose a bookmaker offers odds of 1.65 for the home team to win. This means that for every unit wagered for that particular outcome, you will receive a profit of 0.65.
To convert this odd into the respective implied probability we do a simple calculation.
Implied probability = (1 / 1.65) * 100 = 0.606 * 100 = 60.60%
🔘 Conversion of fractional shares
Fractional odds are generally the most traditional form of expressing betting odds, especially in Anglo-Saxon countries. They are a simple reflection of the return you will receive on a given bet.
For example, suppose a bookmaker offers a 5/2 odds for the home team to win (outcome 1). The odds of 5/2 (expressed as “5 to 2”) means that for every 2 units you wager, you will receive 5 units as profit. So if you wagered 200€, you would have received a profit of 500€ in return plus your original stake of 200€.
To convert the fractional odds into their respective odds, we perform the following calculation.
Offer share: 5/2.
Implied probability = (2 / (5 + 2)) * 100 = 2/7 * 100 = 0.286 * 100 = 28.60%
🔘 Conversion of US shares
The “American quotas” are the most alien format to people outside North America. There are two cases of US quotas.
American negative odds: expressed as -120.
Suppose a bookmaker offers an odds of -120 for the home team to win. This essentially means that to win 100 units you have to bet 120. In other words, if you place 120 units on that outcome, you will receive a profit of 100 units.
So, taking up our example of an altitude equal to -120.
Implied probability= ((- (-120) / ((- (-120)) + 100)) * 100 = (120 / (120 + 100)) * 100 = (120/220) * 100 = 0.545 * 100 = 54.50%
Positive American odds: expressed as +180.
In this case, suppose a bookmaker has offered an odd of +180 for the home team to win the match. This simply means that if you bet 100 units, you will win 180 units.
So using our example of odds equal to +180
Implied probability= ((180/180 + 100)) * 100 = (180/280) * 100 = 0.357 * 100 = 35.70%