What Do Sports Betting Odds Mean?
Reading and understanding what sports betting odds mean is fundamental if you want to be a successful sports bettor. The simplest explanation of odds is that they express the relationship between your initial stake and the potential profit of your wager. That’s the ELI5 version. However, to master sports betting, you must go much deeper than that, which is what we’ll do in this article.After participating in discussions on Reddit and in forums, it's pretty clear that many sports bettors, especially recreational ones, have a limited understanding of sports betting odds.
I rarely see the question pop up where someone asks, “What do the sports betting odds mean?” It’s more about whether betting favorites at low odds are good or creating longshot parlays is a better strategy. My answer is always the same: it’s about finding a positive expected value (EV+) that allows you to make wagering decisions that maximize your chances of winning.
Understanding sports betting odds can help you find and make profitable wagers and increase your chances of winning.
So, let’s go through everything you need to know. Then, to elevate your knowledge of sports betting further, I’ll create a separate article about evaluating and finding EV+ bets.
Meaning of Sports Betting Odds—How Do They Impact Payouts?
Sports betting odds are a numeral value expressing a sportsbook’s opinion on the probability of a specific outcome in a sports event or player proposition, including the vigorish, or simply “vig” (sportsbook margin). This reflects how much money a bettor must risk to potentially win the amount signified by the odds.
In the United States, we use the Moneyline odds format, which can sometimes be referred to as “American odds” or “US Odds,” where there are two basic types of odds:
- Favorites (-): These odds are accompanied by a minus (-) sign that indicates how much money you need to stake to win $100. This is also referred to as negative odds.
- Underdogs (+): These odds are accompanied by a plus (+) sign and indicate how much money you can win for every $100 staked. Also referred to as positive odds.
Examples of how sports betting odds can look along with stake and payout (excluding the returned stake):
Event | Home Team Odds | Away Team Odds | Stake Size and Payout Home Team | Stake Size and Payout Away Team |
---|---|---|---|---|
Chicago Bulls @ Boston Celtics | -298 | +240 | You’d need to wager $298 to win $100. | A $100 stake would pay $240. |
Utah Jazz @ LA Clippers | +180 | -218 | A $100 stake would pay $180. | You’d need to wager $218 to win $100. |
San Antonio Spurs @ Oklahoma City Thunder | -130 | +110 | You’d need to wager $130 to win $100. | A $100 stake would pay $110. |
What if My Stake Isn’t $100? How Can I Calculate the Expected Payout?
I used a $100 stake in the examples because that’s the easiest way to understand how the odds work. However, 100 bucks may be well over your budget, and I recommend that everyone wager within their budget, only risking what they can afford to lose.
If your standard stake is $15, you just need to follow the following formula to calculate your potential win:
- For Favorites (-): {$stake} / (-1 * {positive odds} / 100) = {payout}
- For Underdogs (+): {$stake} * {negative odds} / 100.
Event | Home Team Odds | Away Team Odds | Stake Size and Payout Home Team | Stake Size and Payout Away Team |
---|---|---|---|---|
Chicago Bulls @ Boston Celtics | -298 | +240 | If you wager $15 on Bulls to win at -298, the payout is $5.03 plus your initial stake. | A $100 stake would pay $36 plus your initial stake. |
In the example of Boston Celtics versus Chicago Bulls, the actual formula used is:
- Boston Celtics at -298: $15 / (-1 * -298 / 100) = $5.033557047 payout plus the $15 stake.
- Chicago Bulls at +240: $15 * 240 / 100 = $36 payout plus the $15 stake.
What is the Vigorish (Vig, Juice, Margin, Cut)?
- Vigorish, or vig, is the fee a sportsbook charges for taking your bet, ensuring the operator's profit.
- The vig is also known as the sportsbook margin, "juice," or "cut."
- Sportsbooks inflate the implied probability of outcomes, lowering the odds to secure their profit.
- The percentage of the vig can vary by market, sport, and sportsbook, with some applying higher or lower vig to balance profits and competitiveness.
- Understanding and calculating the vig is essential for serious bettors to make smarter wagering decisions and minimize the cut paid to sportsbooks.
Vigorish, often shortened to vig, is the cut a sportsbook operator keeps for taking your bet. It’s essentially a fee for placing bets on the sports betting site that guarantees the operator's earnings so they can make a profit.
Technically, this is called the sportsbook margin, but it is commonly referred to as vig, “juice,” “margin,” or “cut.” Another way to explain this is that sportsbooks inflate the implied probability of an outcome and effectively decrease the odds you receive, which allows them to make a profit.
The vig is expressed as a percentage and applies to every wager or wagering selection you make in the case of a parlay or same game parlay (SGP). This includes spreads, futures, and literally every odds available for betting.
The vigorish can vary from market to market and sport to sport, and you’ll find that different sportsbooks apply different percentages to either increase profits by applying a high vig or stay more competitive by applying a low vig.
Anyone serious about sports betting needs to learn about the vig and how to calculate it to make the best wagering decisions and maximize their profit by paying the smallest cut possible to the sportsbook.
Vigorish Explained With An Example
If you’re with a friend at the bar watching an NBA game. You guys discuss what team will win, and you disagree on how many points Giannis Antetokounmpo can score. You think he can get 31 points, and your friend says he won’t go over 30 this game.
In the end, you decide to make a bet of $10. You take the bet that Giannis can score over 30 points, and your friend takes the under. If either of you wins, one person makes a $10 profit. All good and fair, right?
If you take the same bet at a sportsbook, it’s a 50/50 chance of Giannis going over or under, but you won’t get the odds +100 and +100 for the Over/Under. You’ll need to pay a cut to the sportsbook operator for taking the bet and the risk.
The average vig in US online sportsbooks is around 4.76%. We’ll round it up for simplicity to 4.8% in this example. So, if the sportsbook has a 4.8% vig on player prop bets, like how many points Giannis Antetokounmpo can score, and his chances of going over or under 30 points are 50%, you’d get -109 on both sides.
Using the formula from earlier to calculate your potential payout, you’d get the following return with a $10 stake:
- Giannis Antetokounmpo Over 30 Points at -109: $10 / (-1 * -190 / 100) = $9.174311927 payout plus the $10 stake.
- Giannis Antetokounmpo Under 30 Points at -109: $10 / (-1 * -190 / 100) = $9.174311927 payout plus the $10 stake.
That wager would have netted a $10 profit between you and your friend without a vig. The same bet with a 4.8% vig would have netted a payout of $9.17 at the sportsbook. Where the sportsbook theoretically ensures a profit of $0.83.
How to Calculate the Sportsbook Vig With the Help of Implied Probability Formula
The next step in understanding the meaning of sports betting odds and becoming a better bettor is to learn how to calculate the vigorish using implied probability.
Implied probability in sports betting is a conversion of traditional odds into a percentage value, where you remove vigorish to get the “true odds” of an outcome. In this process, you also calculate the vig.
In the calculation for implied probability, you get the true odds of an outcome; with the vigorish, this percentage will always add up to over 100%. The amount over 100% is the vig, and this is how you calculate the vigorish in two steps:
- For Favorites (-): {negative odds} / ({negative odds} + 100) * 100 = implied probability.
- For Underdogs (+): 100 / ({positive odds} + 100) * 100 = implied probability.
Once you have the implied probability for both outcomes, you combine the two percentage values, which gives you the inflated implied probability. You simply deduct 100%, and the remaining percentage is the Vigorish.
Event | Home Team Odds | Away Team Odds | Implied Probability Home Team | Implied Probability Away Team | Sportsbook Vig |
---|---|---|---|---|---|
Chicago Bulls @ Boston Celtics | -298 | +240 | 74.87% | 29.41% | 4.28% |
Utah Jazz @ LA Clippers | +180 | -272 | 35.71% | 73.11% | 8.82% |
San Antonio Spurs @ Oklahoma City Thunder | -140 | +110 | 58.33% | 47.61% | 5.94% |
Implied probability in sports betting is essential when evaluating odds since it allows you to get the sportsbook’s true odds expressed as a simple percentage. You can then compare that percentage with your estimates of the outcome to determine if it’s a good bet.
What Does It Mean When Odds Are Negative (-) or Positive (+)?
Negative odds represent the betting favorite, where the odds for the favorite are accompanied by a minus (-). Every time you bet negative odds (a favorite), the numbers indicate how much money you must bet to make a $100 profit.
Positive odds represent the betting underdog and are accompanied by a plus (+). Every time you bet positive odds (an underdog), the numbers indicate how much you’ll win for every $100 wagered.
What Are Pick’Em Odds?
Pick’em is a term sports bettors and betting sites use to describe a game with no favorite or underdog. There is no clear favorite because both teams have roughly the same chance of winning. These games would have even odds of around -110 or +100 on both sides. Some sports betting sites even indicate pick’em odds by adding “PK” or “(PK)” as part of the odds.
So, when there is an even matchup, you say it’s “pick’em odds.” Another way to refer to this is to say the game has “even” odds.
Different Types of Odds Formats Commonly Used at Sports Betting Sites
In the United States, we use Moneyline Odds, the format I referenced in this article. However, similar to the metric system, sports betting odds have different formats in other parts of the world.
While the odds formats are different, they all reflect the same thing: the probability of an outcome with the added vig—expressing the relationship between your stake and the potential profit of a wager.
For illustrative purposes, I created a table showing the different odds formats using the same implied probability. If you’re only betting with US sportsbooks, you won’t encounter any other odds formats, as these are typically used in respective regions. Still, sometimes, you may encounter them on international sites or if you’re visiting a racetrack or betting shop. Below this table is an overview of the world map where these odds are used.
Odds Format | Odds Example for 60.61% | Odds Example for 40.82% |
---|---|---|
Moneyline Odds | -154 | +145 |
Fractional Odds | 13/20 | 29/20 |
Decimal Odds | 1.65 | 2.45 |
Hong Kong Odds | 0.65 | 1.45 |
Indonesian Odds | -154 | 1.45 |
Malay Odds | 0.6500 | -0.6897 |
FAQ Understanding and Reading Sports Betting Odds
Both negative and positive odds represent the relationship between your stake and your potential profit from making that wager. The terms “negative” or “positive” should not be confused with “good” or “bad”, as these words simply refer to the minus and plus signs accompanying the odds. Minus (-) for negative represents the favorite, and Plus (+) for positive represents the underdog. A bet on negative odds has a higher chance of winning but with a lower payout than positive odds, which has a lower chance of winning but provides a higher payout.
Negative odds do not mean bad odds. Negative odds refer to the favorite and are represented by a minus (-) sign, for example, Dallas Mavericks to Win at -180. What you need to know about when betting favorites odds is that the odds tell you how much you need to risk to win $100. In the example given, if the odds are -180 for Mavericks to win, you need to stake $180 to make a profit of $100. Refer to our formula to calculate the odds and return for other stake sizes.
To calculate the payout for American odds, or “Moneyline odds” as it’s sometimes called, use the following formulas for positive and negative odds. For negative odds (-): {$stake} / (-1 * {positive odds} / 100) = {payout}. For positive odds (+): {$stake} * {negative odds} / 100.