One of the first things you need to understand if you are thinking of having a go at betting is how the odds work. For the uninitiated they can seem very confusing and could even put people off. Although there are lots of different numbers to take into account, once you get a basic grasp of what they mean then you will see that it is all pretty straightforward really.
All about probability
When punters and bookmakers talk about the odds of an event they are really showing the probability of an outcome. With betting this can be shown in a variety of ways (and we will take a look at the various methods in a moment) but it is probably easiest to explain with traditional fractional odds.
The bookmaker will set their odds according to the probability of that outcome. For example, they may set the odds for Spurs to beat Juventus at 4/1. You can work out what that means with a simple equation:
4/1 is equal to 1/(4+1) = 0.20 You can see that this means that there is a 20% chance of Spurs beating Juventus
So, now you can work out the probability of an event’s outcome using the odds supplied by the bookmaker. From there you can then calculate how much you can win if you bet on this outcome at these odds.
Calculating your winnings
Using the bet above as an example we have seen that there is a 20% chance that Spurs will beat Juventus. We are now ready to place a bet so we need to decide how much to stake. If we are betting with a stake of £1 we can instantly work out how much we will receive if Spurs do actually beat Juventus.
In this example the odds were 4/1. That means that for every £1 we bet we will receive £4 – as well as our original stake. So if we have decided to bet £1 on this outcome we will get £5 back.
Traditionally, UK bookmakers favoured the fractional method of presenting the odds, as this was how it was done at the racetracks. Many online customers still like to use this method but there is a growing trend for the odds to be displayed in a decimal format.
Originally used more in continental Europe, Australia, New Zealand and Canada, decimal odds are now favoured as they are perceived to be easier to understand. Bookmakers like this, as they believe that fractional odds could put people off betting.
Decimal odds display the amount that you will receive if your bet wins – including the stake. So, using the previous example, Spurs to beat Juventus would be displayed as:
5.0. If your stake is £1 you will receive £5 back (£4 winnings plus your original £1 stake)
Easy to understand
You can choose which way to display the odds when you sign up for an online betting account. It is simply personal preference for which way you want to bet.