Betting odds are a numerical expression of an event happening, typically in a sporting event or horse race. The 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:
- Fractional
- Decimal
- American
- Hong Kong
- Indonesian
- Malay
Fractional Odds do not include the stake with the winnings and they are most often used to express probabilities in a betting market in the UK. The calculation is the stake by the odds plus the stake.
Profit Margin
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%. Here is the calculation for the Fractional Odds profit margin in a three-way market:
| Outcome 1 | 1/1 | 100 divided by (1 + 1) / 1)) = 50.00 |
| Outcome 2 | 2/1 | 100 divided by (2 + 1) / 1)) = 33.00 |
| Outcome 3 | 2/1 | 100 divided by (3 + 1) / 1)) = 25.00 |
TOTAL: 108.00
This book has an over round or theoretical profit margin of 8.00%.
Odds Conversion
Here is an odds conversion table for odds-on, Evens and odds-against.
| Fractional | 1/2 | Evens | 2/1 |
| Decimal | 1.50 | 2.00 | 3.00 |
| American | -200 | -100 | +200 |
| Hong Kong | 0.5000 | 1.0000 | 2.0000 |
| Indonesian | -2.0000 | 1.0000 | 2.0000 |
| Malay | 0.5000 | 1.0000 | -0.5000 |
Examples
Here are examples of Fractional Odds for three of the most popular betting sports and the most basic betting market, which is the win single:
Football
| Home Win | 2/1 | 100 divided by (2 + 1) / 1)) = 33.00 |
| Draw | 9/4 | 100 divided by (9 + 4) / 4)) = 30.77 |
| Away Win | 6/4 | 100 divided by (6 + 4) / 4)) = 40.00 |
TOTAL: 103.77.
This book is over round or has a profit margin of 3.77%.
Tennis
| Player 1 | 1/1 | 100 divided by (1 + 1) / 1)) = 50.00 |
| Player 2 | 4/5 | 100 divided by (4 + 5) / 5)) = 55.56 |
TOTAL: 105.56.
This book is over round or has a profit margin of 5.56%.
Horse Racing
| Horse 1 | 2/1 | 100 divided by (2 + 1) / 1)) = 33.33 |
| Horse 2 | 4/1 | 100 divided by (4 + 1) / 1)) = 20.00 |
| Horse 3 | 10/3 | 100 divided by (10 + 3) / 3)) = 23.09 |
| Horse 4 | 8/1 | 100 divided by (8 + 1) / 1)) = 11.11 |
| Horse 5 | 15/2 | 100 divided by (15 + 2) / 2)) = 11.76 |
| Horse 6 | 9/1 | 100 divided by (9 + 1) / 1)) = 10.00 |
TOTAL: 109.30.
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.
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