How Do Decimal Odds Work? Learn How to Calculate Them
Betting odds are one of the first things you should master if you wish to start betting. By learning how betting odds work, you will be able to easily calculate them and distinguish between barely profitable and valuable bets.
Bookmakers use three different types of betting odds — fractional, moneyline, and decimal. If you are wondering “how do decimal odds work?”, our guide will show you everything you need to know about them. We will help you learn how to calculate decimal odds and teach you how to determine the implied probability of decimal odds.
The Eight Quick Facts
- Decimal odds are also known as European odds because they are most often used across Europe.
- Bookmakers use decimal, fractional, and moneyline odds formats.
- Betting odds represent the chances of an event happening.
- You can easily convert one odds format to another.
- The implied probability represents the chances of a selection to win based on the odds provided by a bookmaker.
- Lower odds mean a team is more favourable to win, but it also means a lower payout.
- Decimal odds of 2.0 are known as evens because you are winning the same amount as the one you are betting.
- You can use online decimal odds calculators to calculate your profits or convert decimal odds to other odds formats.
How Does It Work?
Whether you are using a browser or a mobile app for betting on the go, chances are you have already encountered betting odds. They are the numbers that stand next to a team or a player and represent the likelihood of that selection to win the match or a game. The lower the odds, the more likely a team is to win the match. However, it also means that you will win less if you bet on them.
If you want to learn how to understand betting odds, the first thing you should know is that there are three types of them. Even though these odd types may be written differently, they are always used to show a team’s chances of winning. Out of the three, decimal odds are by far the easiest to learn, which is why we will focus on them.
How to Work Out
Decimal odds are also known as European odds, and they are most often used in Europe. Additionally, you may frequently find them at bookmakers in Canada, Australia, and New Zealand.
As the name suggests, decimal odds are written with a decimal point, and they can be presented as, i.e., 1.4, 1.9, 2.7, 7.4, and similar. The easiest way to explain how to read decimal odds would be to remember that they represent the amount you can win for every £1 you wager.
For example, if you bet £10 on an outcome with the odds of 1.4, your total payout would be £14. At the same time, if you bet £50 on a horse with 7.4 odds of winning the race, you would receive a payout of £370.
If you wish to learn how to calculate decimal odds, you can simply use the following formula:
Initial Stake x Decimal Odds Number = Total Payout
Note that, with decimal odds, you are calculating the total payout rather than the profits. If you wish to calculate the profits, simply subtract the amount you wagered from the total payout.
What Is Evens in It?
An evens bet refers to winning one unit for each unit you stake. In other words, it means winning the same amount as the one you bet. You can often find even-money bets in roulette, like red/black bets, for example.
Regarding decimal odds, an even bet occurs if the bookmaker provides the odds of 2.0 on a selection. If you wish to learn how to work out evens in decimal betting odds, the easiest way to do that would be to, let’s say, place a £100 bet on a 2.0 selection. In case you win, your total payout would be £200.
If you follow our previous advice, you can subtract your initial stake, which was £100, from the total payout of £200. By doing so, you can calculate that you made a profit of £100 for placing a £100 bet, which means you placed an evens bet.
How to Convert Fractional to Decimal
Fractional odds are used in the UK, so you will probably encounter them at bookies. Nowadays, the best betting sites allow you to change the odds format directly on the site.
However, if they don’t, and you find decimal odds much easier to use than fractional ones, we will show you how to convert fractional odds to decimal with one simple trick.
The easiest way to do that is to use the following formula:
Numerator / Denominator + 1
Let’s say that a bookmaker is giving the odds of 14/3 for a horse to win the race. If you were to follow the formula we provided, the equation to convert fractional odds to decimal would be 14 / 3 + 1 = 4.6 + 1 = 5.6.
Although we have shown you how to convert fractional odds to decimal ones via the equation, you can also do it with the help of an online calculator. If you are not keen on doing all the math yourself or simply wish to speed up the process, you can find an online calculator and odds converted to do the work for you.
Online calculators and odds converters are easily accessible and free to use, and all you have to do is look for one online.
How Does It Work? Implied Probability
As we’ve mentioned at the beginning of our article, betting odds represent the probability of an outcome happening. If you wish to know precisely what the chances of certain decimal odds happening are, you can calculate the implied probability.
To calculate the implied probability of decimal odds, you can use the following formula:
( 1 / Decimal Odds ) x 100%
Once you find out what decimal odds on an event are, you can calculate the implied probability of a team winning. If bookies give Liverpool the odds of 1.5 to win against West Brom, we can calculate that Liverpool has 66% chances to win the match. In other words, Liverpool is considered a favourite in this situation.
Knowing how to calculate decimal odds’ implied probability will help you learn how to understand betting odds. However, you should know that the implied probability represents a team’s chances of winning based on the odds provided by the bookmaker and not the actual chances of a team winning.
As we all know, upsets can happen, and even a team with 80% chances of winning, according to a bookmaker can lose. For that reason, make sure always to use your best judgement when placing a bet.
Knowing how betting odds work is an essential step for anyone new to betting. Decimal odds, in particular, are the easiest format to master. For that reason, anyone wondering “how do decimal odds work?” will be pleased to know that they are an excellent starting point to understand betting odds and other odds formats better.
If you have read everything carefully, we are positive that you should have no issues understanding decimal betting odds from here. Moreover, we are certain that you will be able to easily calculate the profits and their implied probability or simply convert fractional odds to decimal ones if that’s what you prefer.
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