What do Betting Odds really mean?
There are thousands of punters around the country investing their hard earned money every Saturday on racing or sports around the country or world. Either way many actually don’t understand what the odds really mean and iTipsports believes this fundamental understanding to be an advantage to you in racing and sports betting.
Most punters believe that the betting odds tell them how much money they are going to get back for every dollar they put on (ie: 20-1 is invest 1 dollar get $20 back). Now whilst this is fundamentally true what they are missing is the true essence of what the odds mean.
Betting odds are simply an educated numerical representation of the actual probability of an outcome occurring. So the betting odds you see assigned in a horse race for example are the probable chances of that horse winning the race. So what does that mean and how can that help you?
To best illustrate this we need to give you an example so lets look at the following horse race:
Buzz $41
Emergent $2.60
Final Award $8.50
Front Sight $5
Kings Order $7
Kolding $2.80
Yippee $71
Dream Fields $18
Now what most people do is look at this market from the point of view of how much money they will get if it wins without putting any real thought into what these odds convert to as a probability of the horse winning the race.
The simplest way to get an idea of this is to divide 100 by the odds listed so for example in the race we gave, the probability or the percentage chance that the market is giving that horse to win is as follows:
Buzz $41 (100/41) – 2.45% chance to win
Emergen $2.60 (100/2.60) – 38.5 % chance to win
Final Award $8.50 (100/8.5) – 11.8% chance to win
Front Sight $5 (100/5) – 20% chance to win
Kings Order $7 (100/7) – 14.3% chance to win
Kolding $2.80 (100/2.8) – 35.7 % chance to win
Yipee $71 (100/71) – 1.4 % chance to win
Dream Fields (100/18) – 5.6% chance to win
Sometimes when thinking about a bet on its probable chances to win basis it can give you another perspective from which you can question yourself in relation to how you thought the horse or team may go.
So the above example, say Buzz whilst you may know it’s a “roughie or value” at $41, with this tool you know exactly how much of a roughie the market thinks it is,
a 2.45% chance to win are you still happy to be on?
It applies equally in sport and it can be a great little filter to run through your mind as well when you are having a sports bet so for example the betting market is:
HAWTHORN $2.92 and COLLINGWOOD $1.43
What this market is really saying is that
Hawthorn are a (100/$2.92) – 34% chance to win
Collingwood are a (100/$1.43) – 69% chance to win
You will also note that the two percentages add up to over 100% the reason for this is the bookmakers build a margin into their odds effectively operating as a fee for supplying the service. So in this example it is 34% + 69% =105% meaning the bookmaker has a 5% margin in this market for themselves.
What these odds also tell us is that if we were to play this game 105 time and you believe Hawthorn would win any more than 34 of them or Collingwood would win 69 of them then that team would be considered a value bet, as they have a positive expectation verses the probabilities (odds).
What does that mean for a line handicap + or – sports betting?
Well the same methodology applies and this becomes a handy tool as well when trying to decide which side of the line to be on
So for example say:
Sydney +24.5 @ $1.92 and Carlton -24.5 @ $1.92
What this market is saying is that
Sydney are a (100/1.92) – 52% chance to cover the + 24.5 line
Carlton are a (100/1.92) – 52% chance to cover the -24.5 point line.
Now 52 + 52 =104 so the bookmaker have a 4% edge priced into the bet, however if you believe if this game was played 104 times and either of these teams you deem more likely to cover the line more than the 52 out of 104 they become a value bet.
These are the types of ways to look at your horse racing tips and sports tips betting. It will to give you a feeling about whether you believe a market is priced the wrong way.
In summing up, it’s important to remember that odds are not really just about how much money you get back for what you put on. They can serve as a whole different piece of information if you look at it through the probability lens of which we hope at iTipsports we have achieved this for you.