How Do Betting Odds Work
How Do Betting Odds Work?
Without betting odds, the entire sports betting industry couldn’t function. That’s how significant those little numbers appear alongside all the different betting markets. But why? Betting odds are a numerical representation of the likelihood of a particular outcome occurring in any sporting event. Here at Fanatics, we use American odds, and these odds make it straightforward to see how much you can win and which outcome is most likely. This is significant for multiple reasons.
At the fundamental level, betting odds help you identify the most likely and less likely outcomes, outlined through ‘+’ and ‘-’ symbols, respectively. Secondly, as sports bettors, you can use betting odds as a guideline to manage risk vs reward when placing wagers. Thirdly, the odds dictate what you could win if you make a successful pick on a specific market.
Fanatics offers betting odds for a wide range of markets, with the most popular options being moneyline, point spread, and totals (over/under). Therefore, we shall address questions such as ‘what is a moneyline bet’ while also giving a full breakdown of how to interpret odds throughout this article. And with that cleared up, we think it’s time to get the ball rolling!
Understanding Moneyline Odds
As promised, we will start today by diving into one of the most fundamental sports betting concepts: understanding odds. And since moneyline markets are the simplest of them all, we will focus on this betting option to kick things off. Therefore, the first thing to learn is what a moneyline bet is.
What Is a Moneyline Bet?
A moneyline bet is a wager placed on a specific team or individual to win the game in question. For example, if you place a moneyline wager on the Boston Celtics ahead of an upcoming clash with the Miami Heat, you are betting that the Celtics will win. This is all that matters for a moneyline wager, whether a winner or a loser, which is why it’s a fan favorite, particularly among beginners or newcomers to sports betting.
Of course, this is an example of a moneyline bet on a team sport. However, these wagers work exactly the same for individual events, too. For instance, you could bet on Novak Djokovic to beat Carlos Alcaraz in an ATP tennis game. Again, this would be a moneyline wager as it depends solely on the game’s outcome and whether or not you’ve snagged a win.
You should also know that moneyline bets aren’t always placed on who you think will win an upcoming game. If we take soccer as an example, professional soccer games can end in a ‘draw’ outcome, which would also be a moneyline bet.
Interpreting the Minus Sign (-)
As a newcomer to online sports betting, all those minus and plus signs can look intimidating. But fear not! These signs indicate which betting option is the favorite (in the eyes of the sportsbook) and which is the underdog. The minus sign doesn’t always identify the favorite. There may be some games where both teams have minus symbols, but for the most part, you can use it as shorthand to see the favorite. The symbol is always joined by a numerical value alongside it - the actual betting odds.
When backing these moneyline markets, the potential payouts will also be lower than if you’d chosen to cover the opposing betting option. After all, you are betting on the ‘most likely’ outcome.
As for how this works in real terms, if you found a desirable moneyline market for the favorite with odds of -150, you’d need to bet $150 to win $100. Therefore, you’d receive a payout of $250, including your $100 profit and $150 stake. The higher the numbers next to the minus symbol, the more likely that market will occur, and the more you need to wager to make a $100 profit.
Interpreting the Plus Sign (+)
The plus sign in American odds usually indicates the less likely of two options, so it is typically associated with the underdog. The higher the number, the less likely the outcome is to occur. Like with minus symbol betting, the plus sign will have a number next to it. This will indicate how much you can win.
The number tells you how much you can win if you wager $100. For example, if the odds were +200, you could win $200 in profit for betting $100, giving you a payout of $300. As you can see, these options present an opportunity to grab a greater return on your wager for lower monetary risks.
But be aware - these teams and individuals are listed as underdogs for a reason!
Plus, odds aren’t always reserved for the underdog. If you place a future wager on a player or team to win a competition, all options may have a plus sign. The favorite will be the player or team with the lowest number next to the plus sign.
Calculating Total Payouts on Moneyline Bets
Now, you should have a clear answer to the question: What is a moneyline bet? Assuming you do, we can now move on and discuss total payouts for your wager/stake size and the associated odds. The best way to show you how this works is to provide a hypothetical example using the moneyline odds you might see in the real world.
- Favorite Example: Odds: -150, Stake: $60
You must bet $150 to win $100, so for $60:
Profit = $60 × (100/150) = $40
Total return = $60 (stake) + $40 (profit) = $100
- Underdog Example: Odds: +200, Stake: $50
Profit = $50 × (200/100) = $100
Total return = $50 (stake) + $100 (profit) = $150
Why Do Moneyline Odds Vary?
It’s important to understand that betting odds are simply a numerical representation of different probabilities. Fundamentally, they show you how likely (or not) it is that a particular outcome will occur in sports. And since the professional sporting world is somewhat fluid, various factors such as form, injury reports, weather conditions, and even betting volume can cause moneyline odds to shift significantly.
These shifts can occur at any point, including well before a game begins, and during, which is known as live betting.
How to Read Betting Odds for Spreads
Now that we’ve sufficiently covered how to read money line markets and what the associated odds mean, it’s time to move up a gear. After all, as popular as moneyline bets are, they are far more rigid than other popular markets. This brings us to spread betting - a form of betting that is more dynamic, but also more complex than moneyline betting.
What Is a Point Spread?
A ‘point spread’ market is sometimes called a ‘handicap’ market, for reasons you’re about to learn. A point spread is a handicap set by sportsbooks to level the playing field between two teams or individuals. These markets are great options when you find a game with an overwhelming favorite and therefore relatively poor value for moneyline betting.
Due to the handicap applied, a previously overwhelming favorite is then balanced with the opposing underdogs through the spread that the sportsbook applies.
How the Spread Works in Practice
Although spread betting markets can cover numerous factors in a game, the most common factor is points or goals, depending on the sport and event in question. As for how this works, let’s say Team A has a -7 handicap while Team B has a +7 handicap, and let’s assume this is an NFL game. You already know that Team A is the favorite due to the minus symbol, which means that Team B is the underdog.
But this time, if you bet on Team A for these particular point spreads, they cannot simply beat Team B for your wager to win. Instead, they must beat Team B by a margin of at least 7 points; otherwise, you would lose the wager, regardless of Team A winning the game overall. Alternatively, if you bet on Team B with a point spread of +7, your wager would win if they won the game or lost by a margin of less than 7 points.
The greater the differences in the point spread for the two options, the greater the performance gap, as determined by the sportsbooks.
Understanding the Price
If all of that seemed a little complicated, don’t worry, for the actual odds associated with point spreads work just as they do for moneyline bets. To recap, if you see a point spread market with odds of -110, you’d need to wager $110 to win $100.
When Does a Spread Bet Win or Lose?
There are three possible scenarios when it comes to spread betting outcomes. Let us break down each one for simplicity:
- Covering the Spread: The favorite wins by more than the spread, or the underdog loses by fewer points than the spread (or wins outright).
- Failing to Cover: The favorite wins by fewer than the spread or loses, or the underdog loses by more than the spread.
- Push: The bet is usually refunded if the result equals the spread.
Variations in Spread Pricing
Like all betting markets, the odds for spread bets vary from sportsbook to sportsbook. This is due to several rather complex calculations and algorithms that sportsbooks use behind the scenes to generate odds and stimulate betting activity. Luckily, you don’t need to understand these complex mechanics! Fanatics has done all the hard work for you. All you need to do is check out our odds and place your bet!
How to Read Betting Odds for Totals (Over/Under)
Last but not least, we will now discuss the last of the three most popular betting options at Fanatics Sportsbook: totals (over/under) markets.
What Are Totals Bets?
In most cases, total bets are wagers placed on both teams’ combined points/goals or two individuals in a sporting event. Like point spreads, sportsbooks generate a set number from which you can bet whether the game will involve more or fewer than the indicated goals/points number. For example, you could bet that a soccer game between the USA and Canada will have more than 3.0 goals.
With these betting options, again, the overall outcome of the game doesn’t matter, as it’s only this specific element you are betting on.
Reading the Total Number
As mentioned, how sportsbooks set specific parameters and generate the odds for various markets is a hugely complex system. However, here at Fanatics, you’ll see these odds as a set number, such as 45 points in football, and you can bet on the ‘over’ or ‘under’ markets.
Of course, the number you see for total markets will vary based on the sport you are betting on and the respective teams/individuals involved.
Interpreting Odds on Totals Bets
Interestingly, total bets are often priced at -110, which means you must bet $110 to win $100, regardless of whether you cover the over or under option. But if the odds differ (such as -120 or +100), your respective payout adjusts with the prices.
- Example 1: Bet $110 at -110 to win $100 (total return: $210)
- Example 2: Bet $50 at -120 to win $41.67 (total return: $91.67)
Understanding Pushes in Totals Betting
It’s rare for pushes to materialize when engaging in totals betting, but it can happen. As mentioned previously, a ‘push’ outcome occurs when the total points/goals end up being the exact number chosen by the sportsbook as a benchmark to create the market in the first place. Should this occur, we will refund your stake.
Totals Betting Strategies
If you are considering placing a total wager, this is usually because there isn’t much value in other significant markets, such as the moneyline option. The potential payoffs compared with the required stake sizes for alternative markets aren’t worth it. And that’s where a total bet could provide the value you seek.
As for key strategies, you want to try to identify factors that don’t seem to align with the odds. For example, a high chance of bad weather could lead to a low-scoring game, or a recent string of injuries for defensive players on both teams could pave the way for a high-scoring affair.
Additional Concepts in Betting Odds
If you are new to sports betting, there will inevitably be all kinds of terms and concepts that seem foreign. Even experienced sports bettors still get confused from time to time! Therefore, we’d like to identify a few essential terms and explain what they mean before continuing.
Juice / Vig Explained
The ‘juice’ or ‘vig’ refers to the small margin or commission built into betting odds, which help us sportsbooks operate and offer a wide range of markets. Instead of charging a separate fee, this margin is typically included in the odds themselves. For example, if you have a spread market where both sides are listed at -110, the odds are set to help ensure balanced actions on both sides.
- Example: Bet $110 to win $100. If equal money is bet on both sides, the book pays $100 to winners but keeps $10 from losers for every $110 wagered.
Probability Implied by Betting Odds
To get a bit more technical now, you’ll no doubt stumble across the term ‘implied probability’ in your sports betting adventures at some point in time. This may seem a complex term, but it simply means the overall likelihood of an outcome occurring, as displayed through the betting odds for all markets.
Calculating implied probability is possible for all sports bettors using a standard equation, too:
- For negative odds (favorite): Probability = Odds / (Odds + 100) × 100
Example: -150 → 150 / (150 + 100) = 60%
- For positive odds (underdog): Probability = 100 / (Odds + 100) × 100
Example: +200 → 100 / (200 + 100) = 33.3%
Whenever you find a market where you think the chance of that outcome occurring is higher than the implied probability, this is often seen as a ‘value bet’ - one worth covering.
Comparing Different Odds Formats
Betting odds always indicate the same thing - the implied probability of an outcome occurring, as explained above. However, you may not always see odds displayed in the same format. There are three main formats you may encounter:
- Moneyline (American): Used in the US, shown as +200 or -150.
- Decimal: Common in Europe, Australia, and Canada, shows total return per unit staked ($1 staked on a market with 2.50 odds would yield a $2.50 return).
- Fractional: Traditional in the UK/Ireland, shows profit relative to stake (5/1 means $1 wins $5).
While each format is clearly slightly different, it all comes down to personal preference as to which one you should use.
Practical Tips for Understanding and Using Betting Odds
As you’ve seen throughout, intelligent betting is all about interpreting betting odds correctly, finding value, and pulling the trigger when ready. However, that’s not the only advice you should try to follow as you venture deeper into sports betting.
Start Simple: Focus on Moneyline Bets
To build confidence and ease into sports betting without getting too wild, we recommend starting with moneyline bets. These are the easiest to master and the simplest to monitor, making them ideal for newcomers.
Practice Reading Odds Before Betting Real Money
Before diving in with both feet, we suggest placing a few virtual wagers to ensure you understand the basics of reading odds and what they dictate. Initially, it is helpful to play around with different odds formats while calculating the possible payouts based on different bet sizes.
Track Odds Changes to Identify Trends
Once again, betting odds aren’t static. They constantly change due to betting activity and new information that impacts the implied probability. Therefore, getting comfortable with this dynamic environment is essential while trying to identify trends that shift the odds for specific markets.
Use Odds Calculators for Quick Payout Estimates
If you want a little ‘cheat sheet’, so to speak, you can always access online odds calculators to speed up the risk vs reward decision-making process. These are particularly beneficial for live betting, where the odds can chop and change within seconds!
Always Factor in the Juice When Evaluating Odds
Just like paying taxes, the ‘juice’ or ‘vig’ when betting odds is simply unavoidable. Therefore, your best approach is to simply accept that this is factored into the betting odds and plan accordingly for the best chance of long-term profitability (never a guarantee).
Conclusion
Before letting you loose on the sports betting world, we leave you with a few reminders. As you explore the wealth of betting markets out there, always remember that the odds are there as your guide. They indicate the chances of all corresponding outcomes, showcase the favorites vs underdogs, and help you when assessing the risks vs possible rewards across the board.
Additionally, if you are just starting, we highly recommend familiarizing yourself with moneyline, spread, and totals markets. These three markets pop up repeatedly for almost all sports and events, so if you can master them, you will be well on your way. And lastly, while we hope this goes without saying, we ask you to gamble responsibly and to keep things fun at all times.
Always remind yourself to bet within your means, continue learning, and enjoy the activity of sports betting. After all, responsible betting is the key to a rewarding experience!