## What are the odds and how do they work?

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What are they?

The odds are the benefit you receive for each euro wagered, that is, the net profit + the amount wagered.

Yes, it was not clear to us the first time, but surely the example helps you understand how they work:

Imagine you have bet € 10 for a team with a odds of 1.3 and that team wins. The amount of money you will collect from the bookmaker will be € 10 x 1.3 = € 13, while your benefit will be € 13 – € 10 = € 3

The types of odds

Although in the example we have given you we have used 1.3 odds, that are, decimal odds, there are different types of odds:

Decimals or European

They are the most common odds and the ones that you probably know how they work. The decimal odds are equal to or greater than 1, and depending on the bookmaker they can include 2 or 3 decimals. These types of bets indicate the gross profit you get when you win a bet.

Gross Profit = Amount wagered x odds

Net win = Gross win – Amount wagered

If, for example, you want to bet € 40 on a certain match, the winnings will be the following depending on the types of odds:

Win team A = 1, 3 GP odds = 40 x 1.3 = € 52 NW = 52 – 40 = € 12

Win team B = 2.8 GP odds = 40 x 2.8 = € 112 NW = 112 – 40 = € 72

Draw between A and B = 2.9 GP odds = 40 x 2.9 = € 114 NW = 114 – 40 = € 74

Fractional or English

This type is used almost only in the United Kingdom and what the fraction indicates is the net gain / amount bet.

For example, if we have a win in a share of 3/1, it will mean that for every 3 euros we have bet we have won 1.

If you find it hard to understand how this system works, you always have the option of resorting to the previous one. You can pass the fraction to the decimal system by dividing and subtracting 1. In our example it would be 3/1 – 1 = 2

American

These odds systems, which may seem complicated at first, are the most used by bookmakers in the United States. The American odds system works differently and can be positive or negative, depending on whether the odds are higher or lower than what would equal 2 in the decimal system.

– Positive: If the odds are greater than or equal to 2, it will have a positive sign. The odds will indicate the net profit we can get if we bet 100 units.

Imagine the odds are +150. If you bet € 100 and win the bet, the amount you would get would be € 150.

– Negative: If the odds are less than 2, it will have a negative sign. The odds will indicate the amount we must risk to obtain a profit of € 100.

If for example the odds are -300, you will win € 100 for every € 300 you bet.

We would understand that this system seems the most complicated. If you don’t like it, you can always calculate the equivalence to the decimal system as follows:

Positive = share / 100 + 1

Negative = 100 / share absolute value + 1

How are they calculated?

Bookmakers set their odds based on:

– The statistical calculation of probabilities: within this, different variables are taken into account, such as the trajectory of the teams, the injured players, if the team plays with substitutes …

– The profit margin they get from bets.

With this data, they calculate the final installments they will establish. The final odds can never be too high, since then they would lose money, or very low, because if not almost anyone would want to bet.

If you want to know how odds odds are calculated thanks to the implied amounts method, check out our example.

The implied quantities method

To make it easier we will use the same data as in the example of decimal quantities. Odds A = 1.3; Odds B = 2.8; AB odds = 2.9

1. We calculate the simple probability = 1 / share x 100

AP = 1 / 1.3 x 100 = 76.92%

PB = 1 / 2.8 x 100 = 35.71%

PAB = 1 / 2.9 x 100 = 34.48%

PA + PB + PAB = 76.92% + 35.71% + 34.48% = 147.11%> 100%

2. Profit of bookmakers = (1 / 1.3) + (1 / 2.8) + (1 / 2.9) = 1.4711

This result means that for every € 1.47 they have bet, the bookmaker expects to pay € 1.

3. Percentage of payments = 1 / profit from bookmakers x 100 = 1/14711 x 100 = 67.98%

For every € 100 wagered in the match between team A and B, the bookmaker hopes to return € 67.98.

You should keep in mind that the quantities we are using in the example are completely fictitious. Normally, the percentage of payments is greater than 90%.

4. Now we have enough data to calculate the implied probability = simple probability x percentage of payments

Pmpllicit A = 0.7692 x 0.6798 = 0.5229

Pmpllicit B = 0.3571 x 0.6798 = 0.2427

Pmplified AB = 0.3448 x 0.6798 = 0.2344

Unlike with the simple odds, the result of adding the implied odds is 100%, therefore, we can take into account the data obtained when placing our bets.

Why do they vary?

The bookmakers do not decide to increase or decrease the odds at will, it all depends on the bets of the users. The more people bet on a team, the lower the odds for that team and vice versa.

The odds indicate the probability that the desired result will happen, and therefore, they may undergo very important variations. That said, logically, the longer there is for the event to occur, the higher the odds will be.

Bookmakers can change the odds at any time, but don’t worry, if you had already placed your bet, it will be kept with the odds of the moment in question.

If we were to explain how the odds vary in a summarized way, we would say that “the greater the risk, the greater the profit.” It is for this reason that the higher the odds, the less options the team has to win.

Live Betting

Live betting, better known as live betting, is the time when the odds may vary the most. Keep in mind that once the event has started, we can obtain information as important as how much enthusiasm and motivation the players have left on the pitch or what their strategy is. This information can be decisive when placing a winning bet.

From the beginning to the end of the match, the result can take a 180 degree turn, and linked a considerable variation of the odds.

It is important to keep this in mind when placing your bets, since depending on the scoreboard it may be more or less interesting to bet on one or the other team.

Conclusions

Now that you know a little better how odds work, consider our conclusions:

– The favorite teams and with more chances of winning will always have the lowest odds, since there will be many people who bet on them. In our example, team A had the lowest odds, and as we have verified, its implicit probability was the highest.

– In contrast, the worst teams will have the highest odds.

– In the American odds, the negative ones represent the favorites.

– Compare the odds of different bookmakers at the time of betting.

Since you have all the necessary information about the odds, the time has come for you to start betting.