How do betting odds work? A 2026 guide to understanding sports odds and predictions

May 29, 2026

by James Pacheco

Wondering how betting odds work? Our sports betting experts have you covered with this insightful guide. You will be taken through a complete rundown of how sportsbook odds work, how to read odds, and more.

We will cover fractional, decimal, and American odds in this guide, so you can learn about your preferred configurations. Whatever it is you need to learn about bookmakers’ odds, we will reveal it right here, as we prepared another thorough check and update today. Whether you’re a novice or seasoned bettor, we will teach you from scratch or help you brush up on a few things.

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What are betting odds?

At some point, everyone who’s into sports betting has asked the question, “How do betting odds work?” This is a key question, as without an understanding of how odds work, you won’t be able to move forward with placing bets. We also have guides to give an what is handicap in betting, if you’re interested in specific bet types.

Odds shown by sportsbooks are an integral part of wagering, as it tells you the probability of an event happening and how much you could potentially win if you correctly predict the outcome. It might seem a little overwhelming at first, but betting odds are pretty easy once you have had betting odds explained.

Quite simply, bookmakers’ odds will tell you these two things:

• Likelihood of an event happening, such as a specific team winning a match.
• How much you’re expected to win, if your bet is correct.

These odds are calculated by the sportsbooks themselves and are based on their analysis, which is why odds can vary from bookmaker to bookmaker. You can find long and short odds, so it’s essential that you know the difference between long odds and short odds. While short odds indicate that the outcome is likely to happen, long odds means that the odds are against you i.e., the event isn’t likely to occur.

Understanding sports betting odds: How odds are calculated

Odds are calculated directly by the bookmaker. The sportsbook will work out the probability of an event occurring based on their analysis. The bookmaker will then turn this into odds that you can use for betting.

Because of this, the odds will vary depending on your chosen sportsbook. This is why it’s so important to look around and shop for the best odds bookmarkers, especially if you are confident in your predictions and want to get the best deal. This is essential for knowing how betting odds work.

Betting odds explained: Probability

It won’t take long before you start hearing about probability in sports betting, as it’s such an important part of the process. Probability refers to how likely it is that something will happen and it is often represented as a percentage for betting odds.

Let’s use football as an example here. A popular football bet is to wager on the result of the coin toss at the beginning of the match. As there are only two sides to a coin, there is a 50% chance of the coin landing on heads and 50% for it to land on tails.

So, how does the bookmaker make a profit on this bet? Most sportsbooks will use the following odds: 10/11 tails and 10/11 heads, which means the bookmaker will take a percentage regardless of whether you win or lose.

How to read the odds in sports betting

All online sportsbooks will have a default odds format but you could easily change the configuration to suit your preferences. To help you learn how to read sports betting odds, we will walk you through fractional, decimal, and American odds.

Fractional odds

Fractional odds are displayed in fractions to highlight the likelihood of an event occurring. Fractional odds are one of the simplest ways of reading odds, as it will tell you how much you can potentially win from your wager.

Here are a few examples of how fractional odds are displayed and what they mean in terms of potential payouts:

Both 15/2 and 3/1 odds are referred to as ‘odds against’ bets. This is when you wager on an event where the sportsbook thinks that the scenario is less likely to happen, meaning that the sportsbook is betting against the event happening.

4/5 is an ‘odds on’ wager, which means the sportsbook thinks that the likelihood of the event happening is high. But when you see fractional odds where both numbers are the same, such as 1/1, this is what’s called an ‘evens bet’. A winning evens bet will double your wager.

Fractional odds to percentages

If you want to calculate the percentage return of a winning bet, you will need to use your wager and the profit. Here’s an example of how to turn fractional odds to percentages:

Let’s say you are betting on odds of 2/1. This would provide you with a 200% profit from the sportsbook and 100% of what you wager. For example, if you bet $10 and won, your profit would be $20 and your $10 stake, meaning your full payout is $30.

To convert the fractional odds into a percentage, you should use the following formula: (x/y) * 100. Here’s how this formula works in practice:

• You place a bet of $10 on odds of 6/3
• (6 / 3) * 100 = 200%
• 200% of $10 = $20 profit
• Add your wager of $10 = $30 return

Fractional odds to probability

Understanding the probability of the event that you are betting on is essential, especially for those who like to be informed and up-to-date on the events and potential scenarios. If you would like to know the likelihood of an event or outcome, you use can the following formula: (y / (x +y)) * 100.

Here’s an example of how the formula works in reality:

• Odds: 3/1
• Calculation:

(1 / (3 + 1)) * 100

(1 / 4) * 100

0.25 * 100

• Probability: 25%

Decimal odds

Decimal odds is another popular format and is widely used across many online sportsbooks. Decimal odds are pretty easy to understand and they will give you a quick insight into the probability of an event happening.

Furthermore, decimal odds can help you to compare odds without having to go through complex formulas. As the probability is already displayed, you can get a view overview of your potential win. Quite simply, the higher the number in decimal odds, the higher your potential winnings are.

Here’s an example of how you can use decimal odds to work out your potential win amount:

Decimal odds to percentages

To calculate the percentage on decimal odds, all you need to do is multiply it by 100. For example, 1.50 = 150%. It’s important that you keep in mind that the percentage here is how much you wager, not the profit you will get for a winning bet.

Here’s an example of how to calculate the percentage with decimal odds:

• You place a bet of $10 at odds of 1.50
• 1.50 * 100 = 150%
• $10 * 150% = $15
• On a winning bet, you will receive 150% of your stake back

Decimal odds to probability

Converting decimal odds to probability is easy enough, but we will walk you through the steps you need to do this successfully. You just need to make sure that you take into account the decimal. To do this, you will need to use the formula: 100/odds.

• Odds: 5.00
• Calculation: 100/5 = 20%
• Probability: 20%

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American odds

It won’t come as a surprise to hear that American odds are popular in the USA. American odds are the primary odds format used in the states, but you will find it at plenty of other sportsbooks around the world as they all cater to a variety of audiences and preferences.

American odds are displayed with either a minus (-) or a positive (+), indicating the favorite or underdog respectively. Check out an explanation and example of how both configurations are displayed and what they mean:

American odds to percentages

When it comes to converting American odds to percentages, you can learn how to use a betting calculator or follow the guide below.

Here’s an explanation of how to convert American odds to percentages, for both underdogs and favorites:

Underdogs:

This format of odds represents the profit, so turning the odds into a percentage of return is worked out by adding 100% of the wager. This can be used to calculate how much you can potentially win for making a correct prediction.

• You place a bet on odds of +150
• +150 is equal to 150%
• If you bet $100, you would receive $150, including the original stake, giving you a total of 250%
• 100 * (150 + 100)
• 100 * 250 = $250

Favorites:

To convert this odds format into a percentage, you will need to use the following formula: 100 – (10000 / +odds):

• You place a bet of $100 with -125 odds
• 100 – (10,000 / +125) = 20%
• As a result, you will receive 20% of your stake, which is $20 for every $100.

American odds to probability

Let’s take a look at how you can turn your American odds into a probability percentage, to calculate the likelihood of winning:

Underdogs:

This calculation is the same as converting fractional odds, so if you already have a handle on that, you should find this pretty straightforward. You will use the following formula: (y / (x + y)) * 100. Here’s a quick example of how it works in real life, using a bet of $100:

• Odds: +150
• Calculation: (1 / (1.5 + 1)) * 100 = 40
• Probability: 40%

Favorites:

You will use the same calculation as above, but this time you will subtract it from 100:

• Odds: -150
• Calculation: 100 – ((1 / 1.5 + 1)) * 100 = 60
• Probability: 60%

Pros and cons of sports betting odds

Now you have a grip of how odds work in betting, you can see that there are a lot of strengths to understanding odds. But with that, there are a few downfalls to consider, too:

Conclusion: Understanding the odds in sports betting to improve your chances

Odds for betting have been explained in this guide, so you should now have a deeper understanding of how odds work. You can now make more informed decisions on your bets and are prepared for how to calculate the probability. Each odds configuration is different, so it’s down to what format you prefer. Thankfully, most sportsbooks these days cater to all preferences, so you shouldn’t have an issue. Learning how to read odds and convert them will help you to calculate your potential wins and weigh up the risks.

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How do betting odds work? FAQs

1. 🏈 What does odds mean in sports betting?

   Odds give you an indication of the likelihood of an event or scenario happening. When it comes to sports betting, this will refer to a specific match or scenario within the game, such as a goal being scored. You can also learn more about specific markets, such as each way betting odds.

2. 🔢 What odds format is better to use?

   There’s no right or wrong in terms of which odds configuration you should use. Instead, you should focus on odds that are easy for you to read and understand.

3. 🌐 How to understand sports betting odds in different countries?

   Different odds formats are popular in different countries. For example, the UK predominantly uses fractional odds, while American odds are widely available in the USA. But you don’t need to stick with the most popular in your region, as most sportsbooks cater to most formats.

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