Betting Odds Explained

Odds are the key component in sports betting. Players often take them for granted, but odds can mean all the difference between success and failure, especially if matched betting is involved. If you want to learn more about sports betting odds, how they’re created and how to use them to make matched betting profits, you are at the right place! Our odds talk starts now!

Recommended to Read Next: What is Arbing in Matched Betting?

Top 3 Key Takeaways:

  1. Bookmakers set their odds in order to ensure their profits.
  2. Bookmakers’ odds are not always the same as the probability of an outcome to happen.
  3. Oddshero finds the best odds for Matched Bettors.

How Do Betting Odds Work?

There are two functions of odds in sports betting. The first one is related to probability. Betting odds tell you how likely it is for an outcome to happen. However, the odds don’t always reflect the probability. The reason is that they change often, going up or down, depending on how much money bettors are putting on those outcomes.

If a huge amount of money is being wagered on a certain outcome, the odds on that bet are going to drop. This way, the bookmaker is making sure that if the outcome really does happen, they are not going to have to pay out too much money. This takes us to the other function of odds, which is to help you figure out how much money you are going to win if your bet proves to be a winning one.

Odds usually come in decimal form, at least in the European sportsbooks, although they can also come as fractions (e.g. 1/3) or as the so-called American odds (e.g. +200). When they are represented in decimal form, it is very easy to calculate your potential winnings.

What you have to do to calculate your winnings is to multiply the odds with the stake. The result you get is the total amount of money the bookmaker will have to pay you out. To calculate your potential profit, you just need to subtract the staked amount from the amount representing your possible winnings.

This is probably best explained through an example. Let’s say you’re putting €100 on Conor McGregor to win against Donald Cerrone at the odds of 1.30, your potential winning is €130. This means that if McGregor wins this fight, you’re going to have €30 additional in your account.

Odds on Conor McGregor

If you bet the same amount of money on Cerrone at 3.50, you would potentially win much more money. Your potential winning, in this case, would be €350. The fact that the odds on McGregor are much lower than Cerrone means that the probability of McGregor winning is higher.

By looking at the odds in this particular example, we can assume that the probability is on McGregor’s side. At the same time, we can also assume that more money is being wagered on McGregor if the odds on him are dropping. Of course, none of this actually means that he’s going to win the fight. Favorites lose to underdogs all the time, which is what makes sports betting so exciting.

How Bookmakers Set the Odds?

Bookmakers set the initial odd based on probability. Those odds are then adjusted as the players start putting their money on different outcomes. The big question is, what are the factors that come into play for bookmakers when setting up the initial odds? What are the criteria they use to figure out the probability of potential outcomes?

It all depends on the type of bet in question, whether it’s a moneyline bet, number of goals/points, and so on. Still, generally speaking, they take into account such things as the form of the teams/players, their current placement in the rankings, their home/away performances, etc. Some bookmakers even go so far to hire sports experts to help them determine the probability and set up the odds.

Their basic tool in all of this is their common sense. Let’s say, for example, that the event you want to set up the odds for is the game between two teams from the Austrian Tipico Bundesliga, Red Bull Salzburg and Mattersburg. The reason why we decided to use this game is that these two teams are famous for scoring a large number of goals.

Football Odds

At the moment of writing, Red Bull Salzburg have a total of 66 goals scored even though only 18 rounds have passed. Likewise, their opponent Mattersburg, have conceded a total of 47 goals. Knowing these facts, it is not that hard to guess that the odds on a bet such as Over/Under 2.5 Goals are going to be quite low.

It is obvious that the probability of a high-scoring match is very high, which is why anyone with a sane mind would make the odds on Over 2.5 Goals very low, probably in the ballpark of 1.20. However, if the bettors started putting a lot of money on the opposite bet, the bookmaker would have to adjust the odds in order to ensure they don’t lose money if the match turns out to be a low-scoring one.

How Bookmakers Adjust Their Betting Odds?

Every bookmaker sets the odds in such a way that no matter the outcome, the house always wins. It’s actually pretty easy to do so. Let’s say that the odds in a two-way bet are set at 1.90, it means that if you put €100 on each possible outcome, you would win a total of €190 on a total stake of €200, meaning that the bookmaker would get a profit of €10 no matter what the outcome.

The question is, what happens if you put more money on one outcome compared to the other one? In that case, there is a possibility for the bookmaker to lose money if the bet on which you’ve placed more proves to be a winning one.

Unless you’ve placed a massive stake on the bet, the bookmaker is probably not going to react. However, if the total amount of money staked on that event is measured in hundreds of thousands or even millions, the bookmaker has no other option but to act.

To ensure they’re not going to lose money, they are going to adjust the odds. By lowering the odds on one outcome, they are making the players give up on backing that outcome. Even if they keep on betting on that outcome, their potential winnings is not going to be high. Furthermore, the bookmaker might even decide to limit the maximum stake on that event.

Likewise, by increasing the odds on the other outcome, the bookmaker is incentivizing the players to put their money on it. All this is usually done automatically. Online bookmakers use special algorithms that ensure no money is ever lost.

Decimal Odds vs Fractional

Decimal and Fractional Odds

In European sportsbooks, decimal odds are the preferred choice. However, English bookmakers prefer using fractional. The bookmakers from the other side of the Atlantic, on the other hand, tend to use the so-called American odds. So, how are you supposed to convert them?

There are plenty of tools out there that can help you with this. Try Google-ing a term such as “odds converter” and you will probably be able to find a tool that will take care of the hard work for you. However, if you want to learn how to convert the odds manually, you’re at the right place. We’re now going to teach you how to do it, starting with how to convert decimal odds to fractional odds.

What you need to do is remove “1” from decimal odds, then convert the number into its decimal form. Let’s say you wish to turn 1.70 to its fractional version. By eliminating “1” you will get .70, which you then need to convert to a fraction. The result you get is 7/10.

The Importance of Odds in Matched Betting

Regardless of the odds form you prefer, they are the things you need to look for when doing any kind of advantage gambling method. For instance, in order for arbing to be possible, you need to find an odds disparity between at least two online bookmakers. If you are not familiar with arbitrage betting, a.k.a. arbing, it’s a method in which you make bets with such odds that ensure your profit regardless of the outcome.

With Matched Betting, it’s not necessary to use ‘arbing odds’, but it does help to get bigger profits. How matched betting works is that you clear bookmakers’ bonuses, turning them into real money. You’re betting on one outcome with the bonus funds at the bonus-giving bookmaker, while also laying the same bet at a betting exchange. This way, you will win no matter what. Still, in order to ensure your winnings are as high as possible, you need to find favorable odds.

The bad news is that finding such odds is very difficult when you do it manually. The good news is that Oddshero can take care of the job for you. What our tool does is find the best-possible bets, with the best possible odds, as well as suggesting what kind of lay bets you have to make.

Oddshero also works as a regular arbing software, which you can make use of once you’ve taken advantage of all the bookmakers’ bonuses. The main purpose of this tool is to find the best bet/lay bet combinations, which means that you have to use a Bonus Bookmaker in combination with a betting exchange.

In addition to this Matched Betting strategy, Oddshero also lets you do Matched Betting with two bookmakers, in a similar manner as you would if your choice was arbing. In both cases, finding the best odds is the job of Oddshero.

3 Takeaways

  1. Bookmakers set their odds in such a way that they always get the profit regardless of the outcome.
  2. Bookmakers often change the odds in order to ensure their profits, which is why odds don’t always equal probability.
  3. Oddshero is a tool that finds the best odds offered, thus ensuring the highest-possible profits for the Matched Bettors.

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