How to Read Betting Odds – A Guide for US Sports Bettors

Before betting on sporting events, it’s important to understand how betting odds work and what they mean.

Odds are presented in three different forms: American odds, fractional odds, and decimal odds. Each form for the same event represents the same probability of a certain outcome, but how they’re presented is drastically different.

Decimal and fractional odds are more common outside the U.S., but can be found in some stateside sportsbooks.

What Are Betting Odds and Why Do They Matter?

Wagering on a sporting event can seem intimidating if you don’t understand how betting odds work.

Simply put, the odds determine how much money you can win on a successful wager after betting a certain amount.

Betting odds even the playing field and limit sportsbooks' liability while showing the probability of an expected outcome. American odds are displayed in a plus (+) or minus (-) format, with the favored team/individual having negative odds and the underdog with plus odds.

The more money you can potentially win on a bet, the less likely that outcome will happen.

Understanding betting odds means you can determine which teams are favorites and which are the underdogs while also determining if a team has value. A bigger favorite has less value since the payout isn’t always worth the risk.

Understanding American Odds (+/- Format)

Also known as moneyline odds, American odds are most popular in the U.S. and are displayed with a number following the plus (+) and minus (-) symbols.

The odds show the amount of money a bettor would win with a $100 wager on the outcome. The odds are based on a $100 bet, but you can wager different amounts and calculate the payout accordingly.

Positive odds show how much you win when placing a $100 bet, while negative odds show how much is needed to wager in order to win $100.

Higher odds mean it’s less likely your bet wins, but if it does, the profit is much larger.

How to Read Positive Odds

Positive betting odds for any team or individual in a sporting event are displayed with a plus (+) sign. Positive odds show how much can be won on a bet of $100. It also means the team is less likely to win, but the payout is greater; the higher the number, the bigger the payout.

For instance, if the Celtics are +300, they would win that amount plus the original wager for a total payout of $400. The odds are based on a $100 wager, but any amount can be bet. A $10 bet on the same odds would win $30 with a total payout of $40.

How to Read Negative Odds

Negative odds indicate the favorite in a matchup and are displayed with a minus (-) sign. The lower this number, the higher the likelihood of the team winning.

When betting negative odds, you’re risking the amount to win $100. So, for example, if the Celtics are -200, a wager in that amount would win $100 plus the original stake.

Negative odds represent the favored team in a particular matchup with a better chance of winning the contest. Though your team has a better chance of winning, the profit on a successful wager is smaller. A $100 bet on the above odds would win $50 plus the original stake.

How to Calculate Payouts in American Odds

American odds are based on a wager of $100, though any amount can be bet.

It’s easy to calculate payouts based on the $100 format. A betting favorite is listed with negative odds (-), and a wager in that amount would net a $100 payout.

If the Chiefs are a -500 moneyline favorite, you would need to wager $500 to win $100 on a successful bet. The higher the odds, the greater the probability that the favorite wins.

With plus odds (+), the underdog has a lower probability of winning, and thus the payout is greater.

If the Chiefs are +200, a $100 wager would earn a $200 payout.

In both cases, the original stake is returned along with the payout.

There are times when the odds are so high that the risk outweighs the reward. And when odds are extremely low, even a small bet could reward a huge payout in the case of a bit of upset.

Moneyline, Spreads, and Totals – How Odds Apply

We’ve already discussed moneyline odds and how they work.

There is a favorite and an underdog in any game, with the wager on the team you think will win. The odds determine the payout.

There are other forms of betting on sporting events involving a point spread and a total, or over/under. Think of the point spread as a handicap since not all teams are alike. Oddsmakers use spread betting to level the playing field.

For most spread bets, there is a second set of odds, which is simply the price of placing the bet.

For example, we could see odds like this for an NFL game: Chicago +5.5 (-110). In this scenario, Chicago is spotted 5.5 points, and if they win or lose by 5 points or less, they win the bet. This means a bettor would have to put down $110 to win $100.

Total bets are based on the number of points/goals scored in a game. The bet is on whether there will be more (over) or less (under) than the posted number.

Like spread bets, the total has a second set of odds typically listed with a (-) sign. That number is called vigorish, or juice, and is the cost of playing the market.

Why Understanding Odds Matters for Smart Betting

Smart bettors maximize value and decrease risk. Understanding odds can help achieve those goals.

To learn what a value pick is, flip a coin. Heads or tails are the only outcomes, making this a 50/50 proposition. As such, you’d expect even money on both sides.

If heads is listed at +110, you know this has value. The flip may not land on heads, but you made the correct wager, and long-term, you have a better chance of success; however, sporting events are not that simple, so figuring out the probability of an outcome based on the odds is important.

American odds don’t give us the probability of an outcome in terms of a percentage, so doing the math helps.

Since this format is based on a $100 wager, the following formula can determine a percentage: 100 / (odds +100) x 100.

If the Celtics are +300 to win the NBA Championship, using the formula, they have a 25% chance. Through your research and analysis, if you feel they have a better chance of winning, this is a smart bet.