No matter how popular sports betting is, there is still a significant number of sports bettors that don’t quite understand odds. In this article we cover how to understand betting lines, how to convert odds into an implied probability and how to calculate a no-vig line.
Types of Betting Odds
American Odds – Miami Heat (+110) vs. Los Angeles Clippers (-120)
Decimal Odds – Miami Heat (2.10) vs. Los Angeles Clippers (1.83)
Fraction Odds – Miami Heat (11/10) vs. Los Angeles Clippers (5/6)
The odds above equate to how much your return would be on a bet although they’re calculated differently.
Potential profit on a bet
American Odds (Favorite / Negative): Amount risked to win $100 (Ex: Clippers –120 = Bet $120 to win $100)
American Odds (Underdog / Positive): Amount won on a $100 bet (Ex: Heat +110 = Bet $100 to win $110)
Decimal Odds: Multiply the Odds X Bet Amount – Bet Amount (Ex: Heat 2.10 = 2.10 X $100 – $100 = $110)
Fraction Odds: The numerator equals your profit if your bet is equal to the denominator (Ex: Clippers 5/6 = Bet $6 to win $5)
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The first step is to be able to read the odds and figure out the potential profits based on the amount that you bet.
Convert Odds to an Implied Probability
American Odds (Minus) – Odds / (Odds + 100) x 100 = Implied Probability
American Odds (Plus) – 100 / (Odds + 100) x 100 = Implied Improbability
Decimal Odds – 1 / Odds = Implied Probability
Fraction Odds – Denominator / (Denominator + Numerator) x 100 = Implied Probability
These formulas allow you to convert any odds into an implied probability, which tells you how often a bet is expected to win based on the odds from the bookmaker, this is important when handicapping potential bets.
Using the odds above the Clippers implied probability is 54.5% and the Heat’s implied probability is 47.6%.
If you added those percentages up already you may be wondering why the total equals 102.1% and not 100%?
The percentage over 100% is the bookmaker vig (commission) on this market, which in this case is 2.1%.
How to Convert Odds to a No-Vig Line
Taking away the bookmaker vig from the odds will give you a fair line.
Using the same odds as we have throughout this whole article, let’s take a look at how to remove the vig from this bet.
Implied Probability / Overall Market Percentage = No-Vig Line
We take the Heat implied probability (47.6) and divide it by the overall market percentage (102.1), which equals 46.6%. You can do the same to the Clippers (54.5 / 102.1 = 53.4%). When you add up both percentages (46.6 + 53.4) you’ll notice they now equal 100%.
This means that the market thinks the fair line for Miami to win is 46.6% (+114) and 53.4% (-114) for the Clippers.
Convert Implied Probability (Above 50%): (Implied Probability) / (100 – Implied Probability) x 100
Convert Implied Probability (Below 50%): ((100 – Implied Probability / (Implied Probability) x 100)
How to Calculate Expected Value (EV)
Calculating the expected value (EV) is simple and it will tell us how much money we expect to make on average per bet.
EV Calculation – (Probability of Winning) x (Amount Won Per Bet) – (Probability of Losing) x (Amount Loss Per Bet)
So now you should better understand odds, although you are not expected to make these calculations every time you place a bet. Online systems will do it for you, sign up now at heritagesports.eu