When it comes to sports betting, American odds can be confusing to a first-time bettor. What exactly do -150 odds mean when it’s time to place a wager?
Being able to take American betting odds and convert them into implied probability is a key factor to assessing value in a particular betting market.
It is a useful tool for both new and veteran bettors alike.
American betting odds
When looking at American betting odds, you will see a (-) sign listed next to the betting favorite on the moneyline and a (+) sign next to the underdog.
American odds are also centered around a baseline of $100, although you do not need to wager $100.
Favorites
For favorites, the higher the absolute value of the number, the better chance of that bet hitting. For example, a -300 favorite has a higher likelihood of winning than a -150 favorite, according to the sportsbook.
The odds listed for a favorite indicate the amount of money you need to wager to win $100. So that -300 favorite means you would need to put down $300 on that bet to win $100 plus your original stake back.
Underdogs
For underdogs, it’s exactly the opposite. The higher number indicates the bigger underdog. A wager on a +300 underdog has less chance of hitting than one on a +120 underdog from the sportsbook’s perspective.
The odds for an underdog indicate what you stand to win if you wager $100 on that bet. So you would win $300 plus your original stake back if you put $100 down at +300 odds.
Converting American odds to implied probability
While explaining odds in terms of how much money you stand to win or need to wager can be helpful, viewing odds as implied probabilities is a much more user-friendly experience.
It does take some math…but we promise, the formulas make it pretty easy to plug and chug.
Let’s use these DraftKings Sportsbook odds for a 2021 regular-season NFL game as an example.
| Team | Odds | Bet | Payout |
|---|---|---|---|
| IND Colts | +100 | $100 | $100 |
| ARI Cardinals | -120 | $120 | $100 |
Converting negative American odds (favorites)
Implied probability = negative American odds/(negative American odds + 100) * 100
For the above odds, the implied probability of a Cardinals win is:
120/(120 + 100)*100 → 120/220 * 100 = 54.54%
This means that sportsbooks feel the Cardinals have just under a 55% chance of beating the Colts in their upcoming game. The Cardinals are not considered heavy favorites heading into the matchup.
You would need to put up $120 down on the Cardinals to win $100 plus your original stake back.
The higher the implied probability, the more sportsbooks believe that bet will cash. This is why you have to wager more money upfront on heavy favorites when placing a bet.
Converting positive American odds (underdogs)
Implied probability = 100 / (positive American odds + 100) * 100
For that same game, the implied probability of a Colts win is:
100/(100 + 100) * 100 → 100/200 * 100= 50%
You can tell by the implied probability that sportsbooks think this is going to be a close game between the two teams. The difference in implied probability between the favorite and the underdog is just under 5%.
You would stand to win $100 plus your original stake back if you wagered $100 on the Colts.
In more of a mismatch between two teams, you could see the favorite with over 80% implied probability with an underdog at under a 20% chance of winning.
Betting applications
Calculating implied probability can be useful when trying to find value in a market. Use your own research to calculate the team’s chances of winning and compare that to what the sportsbook thinks the team’s chances of winning are.
Let’s look at a wager on a coin toss for an example. We know that with a coin toss, there is a 50% chance it will land on heads and a 50% chance it will land on tails.
However, the sportsbook you are looking at has the odds for heads listed at +125.
125/(125 + 100) * 100 → 100/225 * 100= 44.44%.
This bet would be considered a value bet because the sportsbook’s odds for the coin to land on heads are greater than the true odds for the coin to land on heads.
Applying this isn’t so black and white when it comes to betting on different sports teams, because there is no way to calculate the exact odds of a team winning like we can with a coin toss.
Use your research on the teams to make your best guess as to who will win and compare that to the sportsbook’s lines to try and find an edge.
Break-even percentage in betting
A lot of this math comes into play when trying to calculate the break-even percentage of a bet.
The percentage of time a bet must hit in order for you to break even at those odds is known as the break-even percentage. Understanding this concept and how to calculate it is a helpful tool toward becoming a profitable bettor.
Let’s take a look again at the bet on the Cardinals above. The $120 you put up for that bet is nearly 55% of the money at stake. If you think the true odds of the Cardinals beating the Colts is over 60%, you’ve likely made a decent bet.
When it comes to the wager on the Colts at those odds, your break-even percentage is 50%. If your underdog wins more than 50% of the time, the wager is a smart wager.
Essentially, you are trying to determine if the “true win rate” of your wager is greater than or less than the break-even percentage you get for the bet listed at those odds.
Of course, nobody knows for sure who is going to win a certain game. Do your research, look at the percentages, and make an informed bet that you think can turn you a profit in the long term.
| Odds | Break-Even % | Odds | Break-Even % |
|---|---|---|---|
| -100 | 50% | +100 | 50% |
| -105 | 51.21% | +105 | 48.79% |
| -110 | 52.38% | +110 | 47.62% |
| -115 | 53.48% | +115 | 46.52% |
| -120 | 54.54% | +120 | 45.46% |
| -125 | 55.55% | +125 | 44.45% |
| -130 | 56.52% | +130 | 43.48% |
| -135 | 57.44% | +135 | 42.56% |
| -140 | 58.33% | +140 | 41.67% |
| -145 | 59.18% | +145 | 40.82% |
| -150 | 60% | +150 | 40% |
| -155 | 60.78% | +155 | 39.22% |
| -160 | 61.53% | +160 | 38.47% |
| -165 | 62.26% | +165 | 37.74% |
| -170 | 62.96% | +170 | 37.04% |
| -175 | 63.63% | +175 | 36.37% |
| -180 | 64.28% | +180 | 35.72% |
| -185 | 64.91% | +185 | 35.09% |
| -190 | 65.51% | +190 | 34.49% |
| -195 | 66.10% | +195 | 33.90% |
| -200 | 66.66% | +200 | 33.34% |