Decimal Odds in Betting Explained
- 1 How Do Decimal Odds Work in Betting?
- 2 What Are Decimal Odds?
- 3 How to Use Decimal Odds to Make Money
- 4 Advantages of Decimal Odds
- 5 Why Is It Important to Understand Odds?
- 6 Should I Switch to Decimal Odds?
- 7 In Conclusion
In this article, we discuss decimal odds in betting. We define betting odds, explain how decimal odds work in betting, reveal how you can use decimal odds to make money and illustrate the relative advantages of using decimal odds rather than fractional odds.
Betting and odds are two sides of the same coin: you cannot have one without the other. Odds represent the probability of an event happening. When you bet on an event, you must first consider the odds offered on the event to decide whether it’s worth the wager. When the probability of an event is low, the odds offered are correspondingly high. In other words, you can win a higher return on your wager on the happening of a more unlikely event. Sportsbook operators display betting odds in many formats, of which decimal and fractional formats are the most universal.
How Do Decimal Odds Work in Betting?
Decimal odds are easy to understand. For instance, in a cricket match between India and Australia, the respective odds may appear as 1.80 and 1.95. So, if you placed ₹100 on India to win the game, you would get ₹180 (100 x 1.80) if India won. Similarly, ₹100 wagered on an Australian win would fetch you a return on investment of ₹195 (100 x 1.95) if Australia emerged victorious. Thus, you would earn more from a bet on an Australia win, though the event is less likely to happen. Also, your return (₹180 or ₹195) would include the original stake of ₹100. In the above example, fractional odds would appear as 4/5 (80/100) and 4.75/10 (95/100).
What Are Decimal Odds?
The decimal odds of an event will include the amount staked as well as the return on that stake. So, by looking at the odds offered, we can understand what proportion of the staked amount we can earn. For example, decimal odds of 1.80 on an event will tell us that on a stake of ₹1 we can get a return of 80 paise. (One rupee equals 100 paise.)
Decimal odds can help us to deduce (a) What return we can get on our stake and (b) Whether our betting decision is more likely to succeed.
How to Use Decimal Odds to Make Money
An event in which we can earn an amount higher than the amount staked is an example of an “odds against” event. Thus, if on a stake of ₹1, we can get a return of more than ₹1, say 4, that would be an example of “odds against.” In such case, the odds would be quoted as 5.0.
An event in which we can earn an amount less than the amount staked is an example of an “odds on” event. Thus, if on a stake of ₹1, we get a return of less than ₹1, say 0.9, that would be an example of “odds on.” In such case, the odds would be quoted as 1.9.
An event in which we can earn an amount equal to the amount staked is an example of an “odds even” event. Thus, if on a stake of ₹1, we get an equal return of ₹1, that would be an example of “odds even.” In such case, the odds would be quoted as 2.0.
Advantages of Decimal Odds
It is easier to convert decimal odds to implied probability
- Let’s consider the example of India vs Australia that we have mentioned earlier. We were given odds of 1.80 on India and 1.95 on Australia:
- The implied probability that India will win can be calculated as 1/1.8 = 55.55% chances of winning.
- The implied probability that Australia will win can be calculated as 1/1.95 = 51.28% chances of winning.
- Once we have calculated the implied probability for each of the two possible events, we not only realise that India are more likely to win than Australia but also understand how much more likely.
Fractional odds can also become harder to understand
This is especially so when very large numbers result from our calculations. To cite an example, decimal odds of 1.36 can be converted into fractional odds of 18/50 or 9/25. If you plan to bet ₹10, it is easier to calculate your returns from the decimal odds which tell you that you will get a return of ₹3.60 on your stake.
Another instance when fractional odds become harder to understand is when the probability of an event is relatively high. For instance, decimal odds of 1.5 will convert into fractional odds of 1/2. In another instance, the fractional odds of an event can be quoted as 2/1 which could lead to some confusion unless that bettor has prior experience.
Why Is It Important to Understand Odds?
If you are unable to understand odds, you won’t know how much you are likely to earn from a bet and whether you are getting good returns on your stake in a wagering transaction.
Should I Switch to Decimal Odds?
Decimal odds are easier to understand than fractional odds. For instance, decimal odds of 1.80 can also be quoted as fractional odds. A fractional odd is derived by dividing the amount of returns by the amount staked. Thus, decimal odds of 1.80 will convert into fractional odds of .8/1 or 8/10 or 4/5.
Let’s assume that we are trying to figure out how much we can earn and whether we are getting good returns by looking at fractional odds of 4/5. We must do many mental calculations. For instance, we must first conclude that on an investment of 5 we can earn a return of 4. Then we can further deduce that we can get 4/5×100 = 80% returns.
However, when we look at decimal odds of 1.8, a single glance tells us that we can get returns of ₹80 on ₹100 invested. This simplicity and ease of understanding is the main reason many sportsbook operators have switched from fractional to decimal odds.
When we bet on a sporting event, we would like to know how likely it is that a preferred event (such as a win) happens. Thus, odds tell us about the implied probability of the desired event. Most sportsbook operators choose decimal odds, odds with a decimal point separating two figures. The decimal odds of an event will include the amount staked as well as the return on that stake.