What Are Betting Odds?

Betting odds serve two purposes. First, they tell you the implied probability of an outcome happening. Second, they tell you how much you will win if your bet is correct. Every sportsbook in the world uses odds to communicate these two things, but they may display them in different formats depending on where you are.

There are three major odds formats you will encounter:

  • American odds (also called moneyline odds) — the standard in the United States
  • Decimal odds — popular in Europe, Canada, and Australia
  • Fractional odds — traditional in the United Kingdom

All three formats express the same information, just in different ways. Once you understand one, converting between them becomes straightforward.

American Odds: The Minus and Plus Explained

American odds are the most common format you will see at U.S. sportsbooks like DraftKings, FanDuel, and BetMGM. They are displayed as either a negative number (like -110) or a positive number (like +150), and each tells you something different.

Negative Odds (The Favorite)

A negative number tells you how much you need to bet to win $100. The team or outcome with negative odds is considered the favorite — the side the sportsbook expects to win.

For example, if the Kansas City Chiefs are listed at -150, you would need to wager $150 to win $100 in profit. If your bet wins, you get back your original $150 stake plus $100 in profit, for a total return of $250.

The larger the negative number, the bigger the favorite. A team at -300 is a much heavier favorite than a team at -120. Here is a quick reference:

  • -110: Bet $110 to win $100 (slight favorite, very common for spread bets)
  • -150: Bet $150 to win $100 (moderate favorite)
  • -200: Bet $200 to win $100 (strong favorite)
  • -500: Bet $500 to win $100 (heavy favorite)

Positive Odds (The Underdog)

A positive number tells you how much you win on a $100 bet. The team or outcome with positive odds is considered the underdog — the side the sportsbook expects to lose.

For example, if the Denver Broncos are listed at +200, a $100 bet would return $200 in profit if they win. You would get back your $100 stake plus $200 in profit, for a total return of $300.

The larger the positive number, the bigger the underdog:

  • +110: Win $110 on a $100 bet (slight underdog)
  • +200: Win $200 on a $100 bet (moderate underdog)
  • +500: Win $500 on a $100 bet (big underdog)
  • +1000: Win $1,000 on a $100 bet (long shot)
Key point: You do not have to bet exactly $100. The odds scale proportionally. At +200, a $50 bet wins $100. A $10 bet wins $20. The $100 figure is just the baseline for how American odds are expressed.

How to Calculate Payouts with American Odds

You can calculate exact payouts using simple formulas:

For negative odds: Payout = (Stake / Odds) x 100 + Stake

Example: $50 bet at -130. Profit = ($50 / 130) x 100 = $38.46. Total return = $88.46.

For positive odds: Payout = (Stake x Odds) / 100 + Stake

Example: $50 bet at +180. Profit = ($50 x 180) / 100 = $90. Total return = $140.

Decimal Odds

Decimal odds are arguably the simplest format to understand. The number represents your total return for every $1 wagered, including your original stake.

For example, decimal odds of 2.50 mean that for every $1 you bet, you receive $2.50 back if you win. That includes your $1 stake and $1.50 in profit.

Calculating your payout is straightforward multiplication:

Total Return = Stake x Decimal Odds

A $50 bet at 2.50 odds returns $50 x 2.50 = $125 (which includes your $50 stake and $75 profit).

Here is how to interpret decimal odds at a glance:

  • Below 2.00: The outcome is favored (equivalent to negative American odds)
  • Exactly 2.00: A coin flip — even money
  • Above 2.00: The outcome is the underdog (equivalent to positive American odds)

Converting American to Decimal

If you want to convert between formats, here are the formulas:

Negative American to Decimal: (100 / absolute value of odds) + 1

Example: -150 becomes (100 / 150) + 1 = 1.667

Positive American to Decimal: (odds / 100) + 1

Example: +200 becomes (200 / 100) + 1 = 3.00

Fractional Odds

Fractional odds, written as something like 3/1 or 5/2, are the traditional format used in the United Kingdom, particularly for horse racing. The number on the left represents your potential profit, and the number on the right represents your stake.

For example, odds of 3/1 (read as "three to one") mean you win $3 for every $1 you bet. A $100 bet at 3/1 returns $300 in profit plus your $100 stake, for a total of $400.

Odds of 1/4 (read as "one to four" or "four to one on") mean you need to bet $4 to win $1 in profit. This represents a heavy favorite.

Some common fractional odds and their equivalents:

  • 1/1 (Evens): Same as +100 American or 2.00 decimal
  • 2/1: Same as +200 American or 3.00 decimal
  • 1/2: Same as -200 American or 1.50 decimal
  • 5/2: Same as +250 American or 3.50 decimal

Implied Probability: What Odds Really Tell You

Beyond payouts, odds encode the sportsbook's estimate of how likely an outcome is to happen. This is called the implied probability, and understanding it is essential for finding value bets.

Here is how to calculate implied probability from each odds format:

From American Odds

Negative odds: Implied Probability = Odds / (Odds + 100)

Example: -150 implies 150 / (150 + 100) = 150 / 250 = 60%

Positive odds: Implied Probability = 100 / (Odds + 100)

Example: +200 implies 100 / (200 + 100) = 100 / 300 = 33.3%

From Decimal Odds

Implied Probability = 1 / Decimal Odds

Example: 2.50 implies 1 / 2.50 = 0.40 = 40%

From Fractional Odds

Implied Probability = Denominator / (Numerator + Denominator)

Example: 3/1 implies 1 / (3 + 1) = 1 / 4 = 25%

Why this matters: If you believe a team has a 50% chance of winning but the odds imply only a 40% chance, that is a value bet. The odds are offering you better compensation than the true probability warrants. Finding these discrepancies consistently is how sharp bettors make money.

The Vig (Vigorish) and Why Probabilities Add Up to More Than 100%

If you calculate the implied probability for both sides of a game, you will notice something: the numbers add up to more than 100%. This is not an error. The extra percentage is called the vig (short for vigorish), also known as the juice. It is how the sportsbook guarantees itself a profit.

For example, a standard spread bet might be listed as:

  • Team A: -110 (implied probability: 52.4%)
  • Team B: -110 (implied probability: 52.4%)

The total implied probability is 104.8%, not 100%. That extra 4.8% is the vig. It means that no matter which side wins, the sportsbook collects slightly more than it pays out over the long run.

Understanding the vig helps you evaluate which sportsbooks offer better value. A book with -105/-105 lines (102.4% total) is giving you significantly better odds than one with -115/-105 lines (105.9% total).

Putting It All Together

Reading odds becomes second nature with practice. Here is a quick summary of what you need to remember:

  • Negative American odds tell you how much to bet to win $100. The bigger the number, the bigger the favorite.
  • Positive American odds tell you how much you win on a $100 bet. The bigger the number, the bigger the underdog.
  • Decimal odds represent your total return per $1 bet, including your stake.
  • Fractional odds show your profit relative to your stake.
  • Implied probability converts odds into a percentage likelihood, which helps you find value.
  • The vig is the sportsbook's built-in margin and the reason implied probabilities add up to over 100%.

The best way to get comfortable with odds is to start looking at them regularly. Open up a sportsbook, pick a game, and practice converting the odds into implied probabilities. Once you can do that quickly, you are ready to start making more informed betting decisions.