How to convert odds to their implied probabilityKnowing how to convert betting odds can be very helpful. In fact, if you don't know how to convert betting odds into their respective implied probabilities, you're not helping your chances of coming away as a long term winner of sports betting.
There are three kinds of odds you will come across in the sports betting. They all reflect the same thing, the return you will receive on a given amount of money placed on a bet.
Decimal odds: represented as 1.65.
Fractional odds: represented as 5/2.
American odds: represented as -120 or +140.
Converting Decimal Odds
Decimal odds are a simple reflection of the return you will receive for each single unit placed. For example, let's say a bookmaker is offering odds of 1.65 for Home Team to win. This means that for every 1.00 unit you bet on that particular outcome, you will receive a profit of 0.65.
To convert these odds to their respective implied probabilities we make a simple calculation.
Offer odds: 1.65.
Implied probability = (1 / 1.65) * 100 = 0.606 * 100 = 60.60%
Converting Fractional odds
Fractional odds are generally the most traditional form of expressing betting odds. They are a simple reflection of the return you will receive for a particular amount bet. So for example, let's say a bookmaker is offering odds of 5/2 for a Home Team to win. The odds of 5/2 (expressed as "5 to 2") means that for every 2 units that you bet, you will receive 5 back as profit. So if you bet €200, you would have received €500 profit in return plus your original stake of €200.
To convert fractional odds into their respective probabilities, we make the following calculation.
Offer odds: 5/2.
Implied probability = (2 / (5 + 2)) * 100 = 2/7 * 100 = 0.286 * 100 = 28.60%
Converting American Odds
'American odds' are probably the most foreign odds format to those of you outside of North America. There are two instances of American odds.
- Negative American odds: This is expressed as for example, -120.
Let's say a bookmaker is offering odds of -120 for the Home Team to win the game. This is essentially saying that to win 100 units you have to bet 120 units. In other words, if you place 120 units on that outcome, you will receive a profit of 100 units.
So let's take our example of a American odds offer of -120.
Implied probability = ((- (-120) / ((- (-120)) + 100)) * 100 = (120 / (120 + 100)) * 100 = (120 / 220) * 100 = 0.545 * 100 = 54.50%
- Positive American odds: This is expressed as for example +180.
In this case, let's say a bookmaker have offered odds of +180 for the Home Team to win the game. This simply means that if you bet 100 units, you will win 180 units.
So let's use our example of American odds offer of +180
Implied probability = ((180/ 180 + 100)) * 100 = (180 / 280) * 100 = 0.357 * 100 = 35.70%