Although they can fluctuate rapidly from one way to the other, odds in their most basic form simply represent probability.
Being able to calculate probabilities and compare those to the betting odds available on a particular event will help you to get what is the holy of holies in the betting world – value.
Just because you fancy a certain horse or a certain football team does not mean you should automatically go and back them. Betting on bad value selections is a sure fire way to lose money in the long run and learning about odds and probability will help you to stop that from happening.
Being able to understand the odds in the first place is a crucial element to successful betting. Once you know and understand what odds mean and are able to easily calculate how much you can expect to return for a given stake, you can then compare the odds offered by various bookmakers before making a decision.
All too often bettors rely on history. Yes, we like to see that a football team is on a winning streak or that a certain horse has good form in the book, but the fundamental thing to remember is that we are not betting on what they have already done, we are betting on what they are about to do.
We are making a prediction, plain and simple, and therefore need to somehow assess the probability of a selection being able to win. Assessing what probability your selection has to win and then comparing it to the probability offered by the bookmaker by way of their odds gives you an answer as to whether your selection is good value or not.
Even for professionals, a 40% strike-rate in horse racing is a good percentage and so punters must accept that most bets they place will lose. Getting the best value for the ones that win therefore is crucial. Shop around; use oddschecker.com for an easy way to compare prices across the board.
Signing up with various bookmakers is fine. There are no fees, in fact sign up bonuses are offered by all major online firms and take the shape of enhanced odds or simple cash bonuses which can be used to place bets on their site.
Some bookmakers also offer regular loyalty bonuses, ensuring that good deals are not simply for new customers. The more you bet the more loyalty bonuses you will receive although it’s important not to bet just for the sake of it. Wait for the right opportunities to come along.
Before you begin to know if you are getting value you need to understand the odds formats. Decimal and Fractions are the two most popular ways of displaying odds which are essentially ways of bookmakers displaying their risk ‘versus probability’ measurement (see below).
Fractions are the traditional way of displaying odds and are still used in the US, UK and Australian markets. Basically, if your selection is 2/1 (two-to-one), then that means you will receive twice your stake back if the selection wins, plus of course your stake as well.
Simply divide the second number by the first to give you your odds, i.e. a 13/2 bet is basicall 6 ½ to 1. So if you placed a £10 bet at this price and it won, you would receive £75 back which is the profit at 13/2 plus your original stake.
In decimal betting, popular around Europe for example, the stake is already included in the price quoted. So in this case a 2/1 bet would be displayed as 3.0 and that 13/2 bet would be displayed as 7.5 etc.
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Probability is fairly easy to explain and yet with most things in life, we are pretty useless at using it! The numbers aren’t scary; 0% means there is absolutely no chance that something can happen, 100% means it is certain and most events’ likelihood fall somewhere in between.
If there were four horses in a race and it appeared that on all known form they all had an equal chance, then each horse has a 25% chance of winning. If bookies weren’t in it to make a profit, then they would simply offer 3/1 odds on each of these four horses. As a decimal, those odds would be 4.0, so to come to that price you would work that out as: 100% divided by 4.0 = 25%.
In real life of course, the bookmaker can’t afford to do this as they need, in theory at least, to guarantee themselves a profit. So, in the example above if all horses were priced up at 3/1 and all therefore had a 25% chance of winning then 4 x 25% is 100%. The bookmaker though will actually produce a book of more like 105% or more.
So instead of the three horses being 3/1, they will offer them up at 11/4 (2.75 to 1). Add the stake onto that as a decimal and you get 3.75. 100 divided by 3.75 is 26.66%. Add all four horses up and you come to over 106% which is typical of a horse racing book.
In other words, the bookie here is offering odds on a horse which make it look like it has a 26.66% chance of winning the race when the reality is that is has exactly 25% chance, giving them an advantage over you. If you backed horses like this 100 times you will win some and lose some but over the course of the 100 bets, the bookmaker will be ahead of you.
So with the above in mind, how do you get ahead of the bookie? Some knowledge of your chosen event is necessary of course and once again to make it easy we’ll use a horse racing example.
You may fancy a horse strongly and instinct tells you to go out and back it. It’s favourite for the race at 7/4 meaning if you back it and win, you’ll almost treble your money. Not bad, you would think. However when evaluating the race you think there are three others in with a chance and even though you favour your horse, you reckon it has roughly a one in three chance of winning.
For this to be value, you’d want the horse to be offered at odds of 2/1 or ideally bigger and if it is not, you should keep your discipline and refuse the bet.
On the other hand, if you like a horse and you think it has a decent chance, say 25% and is priced up at 4/1, 5/1 or even bigger then this represents real value. As long as you think you have your sums right in terms of what percentage chance (give or take) your selection has of winning then you can see clearly whether or not you are getting value for money.
Odds will fluctuate and in some cases, rapidly. Keeping a keen eye on the betting markets once you have an idea of what sort of probability your selection has of winning will allow you to eventually spot value bets very easily. So long as stakes are kept to a realistic level you’ll come out on top.
If £100 was your maximum bet, i.e. this is what you would stake if an event had a 100% chance of coming true, then keep in mind that you should change your stakes depending on what level of probability your selection has. If you always put £20 on selection you thought had a 20% chance of coming true but did so at value odds then you should make profit over the course of time.
If however you are ill-disciplined and increase or decrease your stakes whenever you feel like it, then getting value for money has been blown out of the water. Betting markets are fluid, probabilities are fluid and therefore your betting stakes should be fluid too.