If you aim at wagering on only sports, you must have the knowledge of betting odds. No matter if your wager is on the Kansas City Chiefs, the Golden State Warriors or a horse race, having the ability to understand the odds will guide you to make the right choices. In this guide, we’ll explain how to read betting odds, which are the different types of odds formats, the process of calculating possible payouts, and the mistakes that are usually made in betting.
Different Types of Betting Odds
We can classify betting odds into three main formats: American odds, fractional odds, and decimal odds. Let’s have a look at each of them.
1. American Odds
Betters in the United States commonly use American odds, also known as moneyline odds. These odds can be as positive or negative numbers.
- Negative odds (-): It shows how much you need to bet in order to win $100.
- Positive odds (+): Indicates the amount you win on a $100 bet.
2. Fractional Odds
Fractional odds are widely used in horse racing and the UK betting scene. They look like fractions, such as 5/1 (read as “five to one”), and show how much you can win compared to your stake. If the odds are 5/1, you’ll win $5 for every $1 you bet. On the other hand, if a team or horse is a 1/4 favorite, you’d need to bet $4 just to win $1.
3. Decimal Odds
In Europe and Australia, bettors commonly use decimal odds to see the total amount they’ll get back for every $1 bet, including their original stake. For example, if the odds are 3.00, a $100 bet would give you a total return of $300—your $200 profit plus your $100 stake. At 1.50 odds, a $100 bet would return $150, meaning you make a $50 profit while getting your $100 stake back.
How to Read Sports Odds
When you place a sports bet, the odds reflect how likely the sportsbook thinks an event is to happen. These odds also help you understand the implied probability of a certain outcome. To calculate implied probability from American odds, you can use these formulas. For positive odds (e.g., +200), the formula is 100 / (odds + 100) × 100. However, when dealing with negative odds (e.g., -150), you use the formula odds / (odds + 100) × 100.
For example, If the Kansas City Chiefs have -150 odds, their implied probability of winning is 60% (150 / 250 × 100). If the Golden State Warriors have +200 odds, their chances are 33.3% (100 / 300 × 100).
How to Read Spread Odds
To level the playing field between teams with different skill levels, sportsbooks typically set a point spread for sports like basketball and football. Understanding how to read odds is crucial for interpreting these spreads and making logical bets.
Let's say sportsbooks list the Kansas City Chiefs at -7.5 (-110), they must win by at least 8 points for your bet to win. The -110 odds mean you have to bet $110 to win $100.
Similarly, the Golden State Warriors must win by at least 7 points for your bet to pay off if they are listed at -6.5 (-105). The -105 odds mean you have to bet $105 to win $100. However, if the Los Angeles Clippers are at +6.5 (-105), they can lose by 6 points or fewer.
How to Read Horse Racing Odds
The odds for horse races are a little different because they use parimutuel betting, where the odds change based on how many bets are made. For example, if a horse has 4/1 odds, a $10 bet would give you a total return of $50—that’s $40 in profit plus your $10 stake back. Also, if the odds shorten to 2/1, that same $10 bet would return $30, meaning you’d make $20 in profit while still getting your $10 stake back.
How to calculate Payouts
Knowing how to read odds is essential for making informed bets, especially when calculating potential payouts. Understanding the different odds formats and their calculations allows you to determine your possible winnings before placing a wager.
For American odds, if they’re positive (e.g., +200), you multiply your stake by (odds / 100) and add your stake back. If they’re negative (e.g., -150), you multiply your stake by (100 / odds) and then add your stake. When it comes to fractional odds (like 5/1), you simply multiply your stake by the fraction and add your stake. However, decimal odds work differently—you multiply your stake by the decimal number, then subtract your original stake.
For example, if you bet $100 on the Golden State Warriors at +200, you’d make $200 in profit ($100 × 2) and get a total return of $300. If you place a $50 bet on a horse at 5/1, you’d earn $250 in profit ($50 × 5) with a total return of $300.
Common Mistakes to Avoid
When learning how to read betting odds, you'd better avoid these pitfalls.
- Ignoring implied probability: Remember that odds don’t guarantee an outcome but they show probability.
- Not shopping for the best odds: There are different sportsbooks and each of them offer varying odds. Thus, you should compare them.
- Misunderstanding spread odds: A favorite doesn’t just need to win the game. They have to win by a certain margin to cover the spread.
- Overlooking vig (juice): Sportsbooks build a margin into the odds to make sure they always turn a profit.
Final Thoughts
Making wise wagers requires knowing how to read sports odds, including spread, moneyline, and horse racing chances. You're more prepared to wager sensibly now that you understand how to evaluate odds and compute payouts. Set a budget, minimize the risks, and bet responsibly!
Ready to put your knowledge into practice? Check out our recommended sportsbooks for the best odds on your favorite teams. Start betting with confidence today!
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Last updated: February 24, 2025
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Reviewed by Felipe Morgante
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