Betting odds are the foundation of sports betting. They’re set by bookmakers, and they tell you the implied probability for a given bet to win. The odds tell you how much you’ll win on any wager, and understanding how they work is fundamental to sports betting.

The odds are the first thing to look at when talking about a sports bet, and they lay the table for all the steps that come next. They tell you what the expected outcome is for both teams, and can be listed in American odds, fractional odds and decimal odds. All three express the same thing but present different ways to get there. In sports betting, the odds will have one team as the favorite and one team as the underdog. When looking at money line odds, a team just needs to win the game outright. For point spread odds, it’s all about how much a team wins or loses by. The odds mean not all bets are equal. If you bet on a team that is a heavy favorite on the odds, your payout is going to be smaller. And vice versa with a big underdog. Now, let’s break down the three different types of betting odds.

American odds are the most common form of odds that you’ll see at US sportsbooks. They will always be easy to identify because they use a plus/minus format. A favorite will always have a ‘-’ minus sign next to its odds, while an underdog will always have a ‘+’ plus sign next to theirs. American odds are also often referred to as the ‘money line.’ They also are used for point spreads, where the American odds will almost always read ‘-110′ on both sides. In money line betting with American odds, the underdog will have the ‘+’, and the favorite will have the ‘-’. But with point spread betting, the American odds for both sides will usually have a ‘-’ next to them. That’s how oddsmakers make their money, by taking that ‘vig.’

Fractional odds are more common in the UK and Europe than in the United States, but that doesn’t mean you won’t see them at all. For example, fractional odds are the odds of choice when it comes to horse racing, no matter what country you’re in. A horse is going to be listed as 2/1, not +200. Fractional odds are viewed by some as the most simple, because they don’t require any knowledge of what ‘plus’ or ‘minus’ mean like with American odds. Fractional odds are just the amount you’d win divided by the amount you’re wagering. They’re presented with the numerator of the fraction as the amount you’d win up top, with the denominator representing the amount you’re wagering on the bottom.

Decimal odds are a relatively simple math equation like fractional odds. They’re always going to be formatted as just a single all-inclusive number. Unlike fractional odds, the stake or bet amount is already factored in. Decimal odds are also more popular in Europe but are a very quick way to see how much your wager is going to pay out. You’ll never see a ‘plus’ or ‘minus’ sign next to decimal odds either, it’s always just going to be one positive number, no matter how small or how large. Decimal odds just tell you how much money you’ll win on a bet for every $1 that’s wagered. From there, you can just multiply it by whatever your bet amount is.

Implied probability in sports betting is an important concept to understand when looking at odds. American, fractional, and decimal odds tell you how likely oddsmakers think one team is to win. Implied probability allows you to calculate how often your bet will need to cash for it to be profitable. It’s a conversion of odds into a percentage.

For American odds, the equation is different for favorites and underdogs. For favorites, it’s odds/(odds + 100) x 100. So if a team is -200 it would be 200/(200 + 100) x 100. That equals 66.66, meaning the implied win probability of a -200 favorite is 66.7%. That means a -200 favorite has to win 66.7% of the time or better for it to be profitable long-term. For an underdog, the equation is 100/(odds +100) x 100. So a +150 underdog would be calculated as 100/(150 + 100) x 100. That equals 40, meaning a +150 underdog has an implied win probability of 40 percent.

For fractional odds, the equation is denominator/(denominator + numerator) x 100. A horse that is 7/2 would be calculated as 2/(7 + 2) x 100. That equals 22.22, meaning a team or horse that’s 7/2 has an implied win probability of 22.22 percent.

Finally, we’ve got decimal odds, which have the simplest equation. It’s just (1/odds) x 100. If the decimal odds are 3.10 you do (1/3.10) x 100 to get 32.26 percent.

‘Las Vegas betting odds’ used to mean more than they do today, but it’s still a relevant term. Before the proliferation of online sports betting, all the odds used to be set by a handful of powerful Vegas casinos. Now all the big online shops have their oddsmakers, but Vegas is still a major factor. Oftentimes sharp professional bettors will still use Vegas odds and sportsbooks because that’s where limits are usually the highest, and the most money can be put down. Vegas odds became so synonymous with sports betting, that you’ll see Vegas referred to even when someone is talking about lines that don’t have anything to do with Nevada.

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