Understanding Odds And Calculating Payouts
Almost all of us got into sports betting because we love sports: the hits, the drama, the clutch performances and the celebrations. Very few of us got into sports betting because we love math.
But the reality is that with every single sports bet you make, there will be an equation. Reading odds and calculating payouts is every bit a part of sports wagering as knowing which team defends home court best and makes the most fourth-quarter three-pointers.
But don’t worry. This is the good kind of math. This is the kind of math that helps make sports betting more enjoyable by putting you in a better position to be successful.
And if you don’t yet know how to read sports betting odds and calculate your winnings, also don’t worry. We are about to tell you everything you could possibly need to know.
The basics of sports betting odds
Understanding the odds that you’re reading on a betting board serves two major functions. First, just by glancing at the board, you can see which team the sportsbook considers to be the favorite and which team is the underdog. This quick recognition can help focus your strategies and plan of attack as you decide which events are right for you to wager on.
Secondly, you will get to a point where you can quickly recognize just how much money a certain bet will pay based on the posted odds. With so many games to choose from during a Saturday of college football, for example, this fast recognition will help you save time since often you’re racing against the clock and an impending kickoff to get that bet in.
A couple of things to note before we move on and explain the different kinds of sports betting odds.
All odds are fixed at the time you make your wager. That means that even though the odds may shift after you place your bet, your ticket will pay the odds that were posted at the time you made the bet.
All sports betting odds are considered to pay out on a “to one” basis. That means that if you win your bet, you always get your bet back, plus any winnings. So if you place a $10 winning bet with even odds, you get $20 when you cash your ticket.
The different types of odds sportsbooks use
The world can’t agree on which sports are the best and most exciting to wager on, so it’s no surprise it also can’t decide on the best way to display sports betting odds. The bad news here is that you’ll need to learn three different types of odds to be a fully informed sports bettor. But don’t worry — none of the three are all that challenging to understand, and we’re about to explain all of them in depth.
Naturally, as you are wagering on sports in Tennessee, the type of odds you’re most likely to encounter are American odds. The name says it all. It’s what is used throughout North America. So be it the NFL or CFL that has your wagering attention, the odds used should be the same.
American odds are also called moneyline odds, which we’ll explain a little bit later. This is because with point spread bets and totals bets, there usually isn’t a difference in odds played between the favorite and underdog. Although because you do pay the sportsbook its juice, the bets aren’t placed at even odds, either.
American odds are simple in that they are based on what you would need to bet to win $100, or what you would win if your bet was $100. We’ll show some football odds to explain.
- Miami +160
- Baltimore -170
These are the moneyline odds on the Dolphins at Ravens. What these odds are saying is that a $100 bet on Miami would result in $160 of profit — or a payout of $260.
Meanwhile, if you want to win $100 on the Ravens, you would need to place a $170 bet. If you place such a bet and the Ravens win, you would get a $270 payout.
Let’s look at one more example.
- Vanderbilt +420
- Alabama -470
Like the Ravens in the NFL matchup, Alabama is the favorite here, but even more so. At home against Vanderbilt, there isn’t much chance it will lose.
In this case to win just $100, you would have to place a $470 wager. Of course, you don’t need to place bets in increments of $100. Payouts are calculated at these odds with any amount played.
Posted odds can also be used to calculate the implied probability of an outcome. At -470, the implied probability of an Alabama win is calculated at 82.46%. But do understand that this isn’t a perfect calculation since that -470 also factors in betting trends as well as the sportsbook’s own manipulation.
When a sportsbook posts odds, it is not trying to make a prediction. It is trying to get the public to wager on both sides of the given event.
For those of us who have grown up with American odds, they feel natural, easy to read and even easier to calculate. But throughout Europe and Asia, you are likely to encounter decimal odds, which, if we’re being honest, are even easier to read.
There is no adding of the original bet to understand the payout. Nothing has to be calculated off a $100 bet. With decimal odds, the figure that you see is the amount you’ll be paid out if you’re a winner.
Let’s show you an example.
- Tottenham 2.5
- Liverpool 1.45
For every $1 that you bet on Tottenham of the English Premier League, you would win $2.50. So a $10 bet pays $25, a $20 bet pays $50, and so on.
For every $1 you put down on Liverpool to win, you would receive $1.45 in a payout. At $10 you get $14.50, at $20 your payout is $29, and on it goes.
You can see just how simple it is to calculate your payouts with decimal odds. When you log onto a Tennessee sportsbook, you won’t see these — you will instead see American odds — but most of your online sportsbooks and mobile apps do allow you to switch between the different odds displays. If one works better for you than the other, definitely make the switch.
If you’ve gone to the horse track or watched the Kentucky Derby on television, then you’ve seen fractional odds. They are what is used for horse racing or what we used to see all the time in boxing. When Buster Douglas shocked the world and knocked out Mike Tyson in 1990, his odds of victory were listed at 42/1.
Fractional odds are just what they say they are — fractions. The fractions imply the frequency of a victory taking place. If the odds are 5/1 on a particular horse, the oddsmakers are saying that if that race were to be run six times, that horse would win once.
Or in the case of Douglas, if he were to fight Tyson 43 times, he would win once. That’s an implied probability of a Tyson win of 97.6%. So much for that.
One last note on reading fractional odds — they are never spoken as a fraction. If the odds are 4/5, you would never say “four-fifths.” Always read those odds as “four-to-five.”
When talking about the 2019 Kentucky Derby, one would say, “Maximum Security, listed at nine-to-two, crossed the line first, but was disqualified, giving the win to 65-to-one long-shot Country Horse.”
Understanding why bookmakers move odds
The odds of a bet are fixed at the time you place a bet. But you’ll notice that over the course of the week and leading up to an NFL Sunday, there will be movement on the point spread, the over/under and the moneyline.
This does not necessarily mean that the Broncos became a better bet to beat the Chargers from Tuesday to Sunday, although it is possible injury news influenced the line. Usually, it means that the sportsbook changed the line based on which side was garnering most of the bets.
A sportsbook does not want heavy betting on one side, but not the other. It makes its money on the vig (or juice) that it charges its customers.
That’s why you never see moneyline odds that zero out. There is never a +145 underdog vs. a -145 favorite. The sums of those odds always add up to a negative, which accounts for the juice the sportsbook collects.
The book does not want to have a vested interest in one outcome over another. It wants to make sure that action falls equally on both sides of a bet, so it will move the line to make sure that happens. That way it makes money regardless of which team wins.
Calculating your payouts
We touched on the basics of payouts, but let’s explain them a bit further, as there are some easy calculations you can learn to use.
American odds payouts
When reading the odds, the math is based on $100 bets. But most of us don’t want to bet $100 per game. Let’s say you have $40 to put down on the following hockey game.
- St. Louis -150
- Nashville +135
You’ve taken the Blues on the road with all $40. Take 150 (the Blues moneyline) and divide by 100 (the base of American odds). That gives you 1.5.
Now take your $40 bet and divide it by that 1.5. That number is $26.67, which is the amount of profit you’ll make if the Blues win.
If you took the underdog instead, just flip that first equation. Take 100 and divide it by 135 (the Predators moneyline).
That number is 0.74, and now take your $40 bet and divide it by that. That comes out to $54.05 + $40 (the original bet) for a total payout of $94.05.
Point spread bets and totals bets do also have odds, although it’s only enough to pay the sportsbook its juice. Typically, you’ll see this on the board.
- Boston +4.5 (-110)
- L.A. Lakers -4.5 (-110)
The Lakers are the favorite, the Celtics are getting 4.5 points as the underdog, and both sides of that bet pay at -110. So $40 on the Lakers (or Celtics) will pay $36.36 in profit for a total payout of $76.36. The over/under also pays at -110.
Decimal odds payouts
As we discussed, payouts on decimal odds are loads easier to understand than what happens with American odds. There is no division, followed by a second equation that also involves division.
It’s simple, straightforward and only involves math that you’ve known since the second grade.
- Tyson Fury 1.37
- Deontay Wilder 3.20
If you put that same $40 on Tyson Fury, simply multiply 40 by 1.37. The payout is $54.80. If instead you take Deontay Wilder in the upset, that $40 is multiplied by 3.20, and the payout is $128. Easy.
On point spreads and totals bets, you will again pay the vig, which in decimal odds is displayed as 1.91 (2.0 is how even odds are displayed).
Fractional odds payouts
For all of the ease of decimal odds, calculating the payouts of a fractional odds wager takes us back to the nightmare of learning fractions in math class.
Sticking with our boxing match between Tyson Fury and Deontay Wilder, the odds in fractional form look like this.
- Tyson Fury 10/27
- Deontay Wilder 11/5
Yikes. It seems like the Europeans are onto something with those decimals. Anyway, soldiering ahead, you would calculate a $40 payout on Deontay Wilder like this.
- 11/5 = 2.2
- 2.2 x 40 = 88
- 88 + 40 (original bet) = $128
Not impossible. All of it involves math you can do. But when standing in a sportsbook, it’s not ideal to have to do a series of equations.
Fortunately, the Tennessee sportsbook apps will not make you work in fractions.
Parlay odds and payouts
One final betting type that we need to cover is the parlay. It’s hugely popular, and chances are you are going to want to play one sooner rather than later. But how do you know what kind of payout you’ll get when attaching multiple wagers onto one bet?
Parlays can be as few as two teams and as many as all the teams, although many sportsbooks will cap the number of teams you can bet on in any one parlay. On straight point spread and totals bets that pay regular odds, this is the parlay payout chart.
- 2 teams 6/1
- 3 teams 6/1
- 4 teams 10/1
- 5 teams 20/1
- 6 teams 40/1
So, a $40 two-team parlay with -110 odds pays out $145.77. At three teams, that parlay pays $278.27. And a $40 four-team parlay, all paying equal juice, pays $531.22.
You can play parlays that include the moneyline, and the parlay can all be from one game. Let’s say you take the point spread bet (-110) the over (-110) and the moneyline (+145) in a three-team $40 parlay. A win there pays out $357.14.
If you saw the movie Uncut Gems, you know that you can even add individual and team props into a parlay for an even bigger payout. Although be careful whom you tell about the bet! (Not a spoiler.)
Why does any of this information matter?
We just threw a lot of information and a lot of numbers at you, and in a pretty short amount of time. So why should you care about this? Do you have to know the amount you won? Won’t the sportsbook just pay you what it owes?
Well, yes. In that respect, it’s like going to a grocery store. You don’t need to know the prices when you buy something. The clerk at the register will happily handle the total for you.
But just as wanting to know if that packet of chicken you’re buying is a good value or not, you want to know if the $40 you just laid on the Warriors to beat the Spurs is a valuable wager.
Sports betting is not just about picking winners and losers. That’s a big part of it, of course. But anytime you’re gambling, you need to know if the risk you’re taking is worth the potential reward.
If you bought your chicken from the discount shelf, is it being a day old worth the $1.79 in savings? If you’re going to add the Predators to your three-team parlay, does the payout justify the risk that they might spoil the entire bet?
The single greatest skill that separates professional sports bettors from novice sports bettors is the ability to recognize where value lies on the betting board. You can’t do that if you don’t understand the odds you’re looking at and how they equate to your payout.