Betting odds are one of the first things you will encounter when exploring sports betting. Whether you are looking at a football match, horse race, tennis tournament or another sporting event, the odds show the price available for each selection and help you understand the potential return from a successful bet.
Learning how betting odds work can therefore make sports betting markets easier to understand. In this guide, we explain what betting odds mean, how bookmakers set them and the differences between shorter and longer odds.
What Are Betting Odds?
Betting odds are the prices assigned to possible outcomes within a betting market. They help indicate the implied likelihood of an outcome while also determining how much you could potentially receive if your selection wins.
For example, imagine a football team is available at fractional odds of 2/1 to win a match. A £10 bet at those odds would produce £20 in potential profit if successful. Your original £10 stake would also be returned, giving you a total return of £30.
Odds are not predictions or guarantees. Sporting events are unpredictable, and even a selection available at very short odds can lose.
How Do Betting Odds Work?
When you browse a sporting event at NetBet Sport, you will see odds next to the available selections. You can choose a selection, add it to your bet slip and enter the amount you want to stake.
The odds and stake determine the potential return.
Using fractional odds, a £10 wager at 2/1 would provide £20 in potential profit. Adding the £10 original stake means the total potential return would be £30.
It is important to understand the difference between profit and total return. Profit refers to the amount won above your original stake, while the total return includes both the winnings and returned stake.
What Do Betting Odds Tell You?
Odds can help you understand two things: the implied likelihood attached to an outcome and the potential return if you place a successful bet on it.
Generally, an outcome considered more likely will have shorter odds, while one considered less likely will have longer odds. The longer odds compensate for the lower implied probability by providing a larger potential return relative to the stake.
However, betting odds do not represent a perfect measure of an outcome’s true probability. Bookmakers include a margin when pricing markets, which means the probabilities represented by all selections in a market can add up to more than 100%.
If you want to explore the relationship between odds and probability in more detail, our guide to What is implied probability in betting? explains how betting prices can be converted into percentage probabilities.
How Are Betting Odds Set?
Bookmakers use a range of information when initially setting betting odds. Exactly what is considered depends on the sport and market.
For a football match, factors could include recent results, historical performance, expected line-ups, injuries, home advantage and statistics relating to the teams and players involved. In other sports, factors such as surface, weather, course conditions or previous head-to-head performances may also be relevant.
Bookmakers use statistical models, data and specialist traders to assess these factors and create an initial price for each outcome. A margin is then incorporated into the market.
There is no single formula used to create every set of betting odds. Different bookmakers can assess the same event differently, which is one reason prices may vary.
Why Do Betting Odds Change?
The odds available when a betting market first opens do not necessarily remain the same until the event begins.
New information can cause prices to change. In football, for example, confirmation that an important player will miss a match through injury could influence the odds. Team news, starting line-ups and weather conditions can also contribute to changes.
Market activity and changes in a bookmaker’s assessment of an event can affect prices too.
Odds moving in one direction or another do not guarantee the outcome of the event. They simply represent an updated price at that particular time.
What Are Short Odds and Long Odds?
Short and long odds describe the relative prices available for different outcomes.
Shorter odds generally apply to outcomes considered more likely. For example, fractional odds of 1/2 would be considered relatively short. The potential profit is also smaller relative to the stake.
Longer odds apply to outcomes considered less likely. Prices such as 5/1 or 10/1 provide larger potential returns but correspond to lower implied probabilities.
Neither short nor long odds guarantee a particular result. A favourite can lose and an outsider can win, which is part of the uncertainty involved in sporting events.
How Do Fractional Betting Odds Work?
Fractional odds are traditionally common in the UK and Ireland and are displayed in formats such as 2/1, 5/2 and 1/2.
The numbers show the relationship between your potential profit and stake.
For example, a £10 wager at 5/2 would have a potential profit of £25. Your £10 stake would also be returned if successful, producing a total potential return of £35.
Odds of 1/2 work differently because they are odds-on. A £10 wager at 1/2 would produce £5 in potential profit and a £15 total return if successful.
For a more detailed comparison of the two common formats and how to convert between them, read our guide to Fractional vs decimal odds: what’s the difference?
How Do Decimal Betting Odds Work?
Decimal odds make the total-return calculation particularly straightforward because the displayed number includes the returned stake.
You simply multiply the stake by the decimal odds.
For example:
£10 × 3.00 = £30 total potential return.
The £30 consists of the £10 original stake and £20 potential profit.
Decimal odds of 3.00 therefore represent the same basic return as fractional odds of 2/1. Bettors may prefer one format over another, but changing the display format does not change the underlying price.
How Do Betting Odds Relate to Probability?
Betting odds can be converted into an implied probability. This expresses the likelihood represented by a particular price as a percentage.
With decimal odds, a simple calculation is:
Implied probability = (1 ÷ decimal odds) × 100
For example, decimal odds of 2.00 produce:
(1 ÷ 2.00) × 100 = 50%
The price therefore corresponds to an implied probability of 50%. However, remember that bookmaker margins need to be considered when looking at the probabilities across an entire betting market.
Our dedicated guide to What is implied probability in betting? goes further into how this calculation works and how probabilities can help you interpret betting odds.
Betting Odds and Potential Returns
Before placing a bet, you can use the odds and your chosen stake to understand the potential return.
With decimal odds, this means multiplying your stake by the displayed price. Fractional odds require you to calculate the potential profit before adding your original stake to find the total return.
For example, £20 at decimal odds of 2.50 would provide a potential total return of £50 if successful.
If you would like more examples and step-by-step calculations, our guide to How to calculate betting returns from odds explains how stakes, odds, potential profit and total returns fit together.
Remember that a potential return is exactly that: potential. It only applies if the relevant conditions of the bet are met.
Understanding Betting Odds Before You Bet
Understanding odds makes it easier to read sports betting markets and see what a particular price represents.
Before placing a bet, check which odds format you are using and make sure you understand the distinction between potential profit and total return. It is also useful to understand that shorter odds generally correspond to higher implied probabilities, while longer odds correspond to lower implied probabilities and larger potential returns.
Most importantly, odds cannot tell you what will definitely happen. Sporting results remain uncertain regardless of the price attached to a selection.
If you choose to bet at NetBet Sport, set limits that work for you and never wager more than you can afford to lose.
How Do Betting Odds Work? FAQs
What do betting odds mean?
Betting odds are the price attached to a selection. They indicate an implied probability and determine the potential return you could receive from a successful bet.
Are shorter betting odds more likely to win?
Shorter odds generally indicate that an outcome is considered more likely than an outcome at longer odds. However, short odds do not guarantee that the selection will win.
How do I calculate my potential betting return?
For decimal odds, multiply your stake by the odds to calculate the total potential return. With fractional odds, calculate the potential profit using the fraction and then add your original stake. Always check whether a figure refers to profit or total return.
When you choose NetBet Sport, you can enjoy a whole range of top-quality sports and markets. Whatever you choose, always remember to bet responsibly. Here at NetBet, player wellbeing is our number one priority – check out our Responsible Gambling tips and tools page for more information.