Betting odds are a numerical expression of an event happening, typically in a sporting event or horse race. The American odds represent the likelihood of something happening and something not happening. The most basic betting market is for the toss of a coin in which both outcomes have an even chance of happening and not happening.
There are six different odds formats, which are mainly used in countries of their origin. The methods by which odds are expressed are as follows:
American Odds show the winnings from a €/$/£100 bet or the stake that is required to win €/$/£100. These odds are the equivalent of odds against and odds-on in fractional odds. Even money is shown as +100 because a €/$/£100 bet returns €/$/£200 which is a profit of €/$/£100 plus the stake.
The art of bookmaking is to create a market that attracts business while having a built-in profit margin for the bookmaker. A market is said to be over round when the odds represent a book of over 100%. There is no direct calculation for the American Odds profit margin in a three-way market. An odds conversion table shows the odds expressed in American and fractional formats.
|Outcome 1||+100||1/1||100 divided by (1 + 1) / 1)) = 50.00|
|Outcome 2||+200||2/1||100 divided by (2 + 1) / 1)) = 33.00|
|Outcome 3||+300||3/1||100 divided by (3 + 1) / 1)) = 25.00|
This book has an over round or theoretical profit margin of 8.00%.
Here is an odds conversion table for odds-on, Evens and odds-against.
Here are examples of American Odds for three of the most popular US sports and the most basic betting market, which is the win single:
|Home Win (including Overtime)||+150||6/4||100 divided by (6 + 4) / 4)) = 40.00|
|Away Win (including Overtime)||-162.5||8/13||100 divided by (8 + 13) / 13)) = 61.90|
This book is over round or has a profit margin of 1.90%.
|Player 1||+100||1/1||100 divided by (1 + 1) / 1)) = 50.00|
|Player 2||-125||4/5||100 divided by (4 + 5) / 5)) = 55.56|
This book is over round or has a profit margin of 5.56%.
|Horse 1||+200||2/1||100 divided by (2 + 1) / 1)) = 33.33|
|Horse 2||+400||4/1||100 divided by (4 + 1) / 1)) = 20.00|
|Horse 3||+330||10/3||100 divided by (10 + 3) / 3)) = 23.09|
|Horse 4||+800||8/1||100 divided by (8 + 1) / 1)) = 11.11|
|Horse 5||+750||15/2||100 divided by (15 + 2) / 2)) = 11.76|
|Horse 6||+900||9/1||100 divided by (9 + 1) / 1)) = 10.00|
This book is over round or has a profit margin of 9.30%.
The same calculation applies regardless of the total number of potential outcomes. As a rough guide, a typical betting market will be compiled with a profit margin of about 1.5% to 2% per runner or possible outcome. Profit margins tend to be smaller in US sports using American Odds.
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