Sports Betting Odds: How They Work and How to Read

If you are planning to start betting—be it in a casino, sports betting, or any other type—it's essential to understand the odds. Placing bets intelligently requires having a good grip on the main types of betting odds and the ability to read and interpret their various formats.

The three main types of betting odds are fractional (British) odds, decimal (European) odds, and money line (American) odds. These are alternate ways of presenting the same odds and hold no difference in terms of payouts. This means that the expected chances (or the percentage probability) of an event occurring can be converted and presented in any of the odds formats mentioned here.

How American/Money Line Odds Work

Money line odds (aka "American odds" or "U.S. odds") are popular in the United States. The odds for favorites are accompanied by a minus (-) sign and indicate the amount you need to stake to win $100. Conversely, the odds for the underdogs are accompanied by a positive (+) sign and indicate the amount you might win for every $100 you stake.

In both cases, winners get their initial wager back in addition to the amount they've won. The difference between the odds for the favorite and the underdog widens as the probability of winning for the favorite increases.

Betting on the Money Line Example

Let's say a betting website priced an NFL game between the Pittsburgh Steelers and the Kansas City Chiefs with the following money line odds.

• Steelers: +585
• Chiefs: -760

The bookmaker has offered odds of +585 for the Steelers, which indicates that the bookmaker has placed a much lower probability (about 15%) that the Steelers will win the game. Therefore, if you risk $100 on the Steelers, you could win $585. If the Steelers pull off the upset, you get back your initial stake of $100 in addition to the $585 you won, for a total payout of $685.

If you decide to bet on the Chiefs—the team that, according to the bookmaker, has a higher probability of winning the game—you would need to bet $760 to win $100. If the Chiefs are victorious, you will win $100, for a total payout of $860 (initial stake of $760 + profit of $100).

In this matchup, there is a big difference between the two odds, indicating a much higher probability of the Chiefs winning the game. Often the odds are much closer.

How British/Fractional Odds Work

Fractional odds (aka "British odds," "U.K. odds," or "traditional odds") are popular among British and Irish bookies. They are typically written with a slash (/) or hyphen (-).

A fractional listing of 6/1 (six-to-one) odds would mean that you could win $6 for every $1 you wager as well as get the amount you wagered back. In other words, 6/1 is the ratio of the potential profit to the initial bet. Therefore, if you stake $10 at 6/1 and win, you'll get a total payout of $70 ($60 profit + $10 stake).

The total (potential) return on a stake can be stated as:

$\begin{aligned}&T_p=\bigg(S\bigg(\frac{N}{D}\bigg)\bigg)+S\\&\textbf{where:}\\&T_p=\text{The total payout}\\&S=\text{Stake}\\&N/D=\text{The numerator/denominator of the fractional odd }\bigg(\text{e.g., }\frac{28}{6}\bigg)\end{aligned}$​Tp​=(S(DN​))+Swhere:Tp​=The total payoutS=StakeN/D=The numerator/denominator of the fractional odd (e.g., 628​)​

Let's posit that the following are the odds on the three teams most likely to win the NBA Championship:

• Brooklyn Nets: 13/5
• Golden State Warriors: 9/2
• Milwaukee Bucks: 7/1

It can quickly be determined that the Brooklyn Nets are the favorites, while the perceived odds of Golden State or Milwaukee winning are longer. You would win $13 against every $5 you wager on Brooklyn to be the champions. Meanwhile, you'd win $9 against each $2 you put at stake for Golden State to win, and for Milwaukee, you'd win $7 against each $1 bet. 

In the above example, if you bet $100 on Brooklyn to win, you could make a $260 profit ($100 x (13/5)) and get back your initial stake of $100, resulting in a total payout of $360. However, if you wager $100 on Golden State to win, you could receive a profit of $450 ($100 x (9/2)) in addition to the $100 initial stake, leading to a total payout of $550.

The potential profit for a Milwaukee win would be even higher because you could make a profit of $700 ($100 x (7/1)). With your initial stake of $100 returned, it would result in a total payout of $800.

How European/Decimal Odds Work

Decimal odds (aka "European odds," "digital odds," or "continental odds") are popular in continental Europe, Australia, New Zealand, and Canada. These are a bit easier to work with and understand. The favorites and underdogs can be spotted instantaneously by looking at the numbers.

The decimal odds number represents the amount the bettor could take home for every $1 wagered—the total payout rather than just the profit. In other words, your stake is already included in the decimal number (no need to add back your stake), which makes the calculation easier.

The total (potential) return on a stake can be calculated as:

$\begin{aligned}&T_p=S\times D\\&\textbf{where:}\\&T_p=\text{The total profit}\\&S=\text{Stake}\\&D=\text{The decimal odd}\end{aligned}$​Tp​=S×Dwhere:Tp​=The total profitS=StakeD=The decimal odd​

Let's look at an example involving who might have won the 2020 U.S. presidential election. Suppose the decimal odds were:

• Donald Trump: 4.00
• Joe Biden: 1.3

These numbers represent the amount you could win against each $1 you put at stake. So, if you bet $100 on Donald Trump to be reelected as president, you could receive a total payout of $400 ($100 x 4.00). This amount includes the initial stake of $100, resulting in a net profit of $300.

Similarly, you could receive a total payout of $130 ($100 x 1.3) if you successfully bet $100 on Joe Biden. Deducting $100 from this return gives you a $30 net profit.

Here we can see that the bookmaker correctly priced Biden as the favorite to win the election. The higher the total payout (i.e., the higher the decimal odds), the less probable it is that the candidate will win (in the bookmaker's opinion) and the riskier the bet is.

The Bottom Line

American, British, and European odds are three different ways of expressing the same thing and can be converted from one to another. By understanding all three and how they work, you'll increase your own odds of placing well-informed (if not always successful) bets.

If you or someone you know has a gambling disorder, please call the National Problem Gambling Helpline at 1-800-522-4700, or visit ncpgambling.org/chat to chat with a helpline specialist.