How to Understand Betting Odds and Easily Calculate Profits

by S. Ateljevic  ·  April 10, 2021

If you are new to betting, you need to learn a lot of new things before placing your first wager. You need to be familiar with the sport you are betting on, the bookies, the betting markets, and much more. However, before anything, you need to learn how to understand betting odds since this will help you read which team is a favourite and whether the bet you plan to place is worth the risk. Even though it may seem slightly confusing at the start, we will get you started by showing you all there is to know about betting odds and how to calculate them.

The 7 Quick Facts

  • There are three different types of betting odds — moneyline, decimal, and fractional.
  • Bookmakers use fractional odds in the UK.
  • If you bet on a selection with decimal odds, you can calculate the total payout by multiplying the odds with your initial stake.
  • Most betting sites allow you to change odds formats.
  • Bookies set odds based on the likelihood of an outcome.
  • Bookmakers sometimes adjust the odds, depending on the betting market.
  • Fractional odds are the easiest to use when calculating profit.

What Is It? Explained

Betting odds are numbers next to a betting selection, and they represent the likelihood of a particular outcome. Bookmakers set the odds by using various information, data, and statistics to anticipate future events, such as the outcome of a football match, for example. The odds are then presented to punters in three different formats: decimal, fractional, and moneyline.

So, what do betting odds mean, exactly?

Well, the same thing, basically. Fractional, decimal, and moneyline odds are written and calculated differently, but they represent the same thing in a slightly different format. To help you understand how betting odds work in more detail, we will cover all three different types and provide you with examples of how to interpret the odds and calculate the profits.

Understanding Fractional Odds

Fractional odds are written as mathematical fractions, which is how they got their name. They can appear at the bookies as 4/1, for example. These odds are most commonly used in the UK and Ireland, and what makes them convenient is that you can easily calculate the profits by just looking at fractional odds.

The easiest way to learn how betting odds work in the UK is by taking a look at an example. Let’s say that you plan on betting on a selection with the odds of 4/1. This means you would win £4 for every £1 you wager. Similarly, if you were to bet on a game with the odds of 7/3, you would win £7 for every £3 you bet.

So, how do odds work in betting, and how to calculate the profits?

The simplest way is through an equation. To calculate it, you will need the odds and your initial stake. All you have to do is multiply your initial stake with the numerator and divide it by denominator. Let’s say that you bet £50 on a selection with the odds of 7/1.

In this case, that’s (50 x 7) / 1, which translates to 350/1 and equals a profit of £350. In addition, you will also receive your initial stake back, which results in a total payout of £400.

How Do Decimal Odds Work

Decimal odds are also known as the European odds since, you’ve guessed it, they are used across Europe. Apart from Europe, they are often used by bookies in Australia, Canada, and New Zealand.

Decimal odds are written as 1.7, for example. It won’t take long before you learn how to understand decimal betting odds since all you would have to do to calculate your total payout is to multiply your initial stake with the odds. For example, if you placed a wager of £50 on a selection with the odds of 1.7, your total payout would be £85.

Keep in mind that you are calculating your total payout rather than your profits, and you won’t receive another £50 (your initial stake) upon winning. Another useful bit of information regarding decimal odds that you should know is that the lower the number, the more favourable the team to win is.

How to Understand Moneyline Odds

Moneyline odds are mostly used in the US. They are written as a minus or a plus sign followed by a number. The plus sign indicates the underdog, while the minus sign is used to indicate a favourite. When it comes to the number, it represents how much money you can win by betting $100.

The best way to learn how to understand moneyline betting odds is through an example, so let’s just say that a team is given the odds of -900. In this case,  you would need to bet $900 to make a $100 profit, or you could say that you would receive a total payout of $1000.

However, if a team is given the odds of +900, it means you would win $900 by betting $100. Your total payout would still be $1000, but in this case, you would make $900 in profits, and you would only have to risk $100.

When it comes to learning how to understand moneyline betting odds, the higher the number above zero, the more of an underdog a team is. In contrast, the lower the number below zero, the more likely the team is to win. 

The only tricky part about calculating profits and payouts with the moneyline odds comes when you are betting amounts other than $100. For example, if you bet $15 on a game with the odds of +450, all you have to do is divide the +odds with 100, add 1 to the number, and multiply it with your initial stake. In this case, it would look like: 15 x ((450/100) + 1). To calculate the odds when betting on a favourite with the odds of -700, divide 100 with the – odds, add 1 to the number, and multiply it with your initial stake, which would look like 15 x ((100/700) +1).


We hope that after reading through our guide, you won’t be wondering, “how do betting odds work?” and that you will be able to make easily more informed bets. A good thing to know is that most bookmakers will allow you to switch between odd formats on their websites. Therefore, you don’t have to stress about mastering all three odd types if you are familiar and comfortable with using only one.

Now that you don’t have to wonder anymore how to understand betting odds, you can easily find the best betting apps, calculate profits and determine whether it’s worth it placing a bet. However, if you wish to make things even simpler, you can always find an online calculator that will easily convert the odds for you or even calculate your profits or total payouts.