Understanding Odds and Betting Markets

9 min read
Author
Sol Fayerman-Hansen
Sol Fayerman-Hansen
Editor-in-Chief
Fact checked by:
Paruyr Shahbazyan
Founder
Last Updated: Jul 9, 2024, 11:12 AM

Don't Let the Odds Confuse You

Sports betting opened my eyes to a fascinating space where my passion for sports met the thrill of prediction. "Understanding Odds and Betting Markets" will demystify the concepts that once baffled me as a beginner. This article is crafted from some of my own learning experiences, aimed at breaking down how odds work and the vast landscape of betting markets in a way that’s both accessible and informative. Whether you’re new to sports betting or looking to refine your approach, this guide is designed to provide clarity and enhance your betting journey, using straightforward explanations and practical advice from a fellow enthusiast’s perspective.

Types of Sports Betting

In North America, several forms of sports betting are available:

  1. Traditional Betting: This involves visiting a brick-and-mortar sportsbook or casino. It's a classic approach where bettors experience the live atmosphere of betting among other enthusiasts.
  2. Online Sportsbooks: The digital revolution has given rise to online sportsbooks, platforms where bettors can place bets from the comfort of their homes or on the go using mobile devices. These platforms often offer a wider range of betting options, more competitive odds, and bonuses.
  3. Fantasy Sports: A blend of skill and luck, fantasy sports involve creating virtual teams based on real players and scoring points based on their actual performances. This type has gained massive popularity in recent years.

The Role of Odds

Odds are not just numbers—they are a critical component that bridges predictions with potential earnings. They quantify the likelihood of an event's outcome and determine the financial return on a bet. In my opinion, understanding odds is fundamental for anyone looking to engage in sports betting, from novices to seasoned bettors.

Understanding Odds

In North America, bettors usually encounter three types of odds formats:

  • American Odds: Marked by a plus (+) or minus (-) sign. A plus sign indicates the amount you would win on a $100 bet if betting on an underdog, whereas a minus sign shows the amount needed to bet to win $100 on a favorite. 
    • Example: If the odds are +150, a $100 bet would return $150 in profit (total return $250). If the odds are -150, you need to bet $150 to win $100 in profit (total return $250).
    • Formula: For positive odds, Profit = (Stake * Odds)/100. For negative odds, Profit = Stake/ (Odds/100).
  • Decimal Odds: Popular in Canada and Europe, they represent the total payout (stake plus winnings) for a $1 bet.
    • Example: If the odds are 2.50 and you bet $100, your total payout would be $250 (2.50 * $100), which includes a $150 profit.
    • Formula: Total Payout = Stake * Decimal Odds.
  • Fractional Odds: Typically used in horse racing, these odds show the potential profit relative to the stake.
    • Example: For 5/1 odds, for every $1 bet, the profit would be $5 (total payout of $6 including the $1 stake).
    • Formula: Profit = (Stake * Numerator)/Denominator; Total Payout = Profit + Stake.

Interpreting the Odds

Odds indicate more than just potential returns; they also reflect the sportsbook's prediction for the event. Shorter odds suggest a higher likelihood of that outcome occurring.

The 'Juice' or Vigorish ‘Vig’

The 'juice' or vig, the sportsbook's commission, is crucial in understanding potential returns. It's typically integrated into the odds and affects your overall payout.

  • Example: If the odds are -110, it means you need to bet $110 to win $100, the extra $10 is the juice.
  • Formula: For negative odds with juice, Profit = Stake/ (Odds/100) - Stake * (Juice/100).

How Odds Are Set

Bookmakers calculate odds based on complex algorithms, expert opinions, and market conditions. They reflect the probability of outcomes, considering factors like team statistics, weather conditions, and injuries, but also the betting behavior of the public to ensure a profit margin.

The Role of Odds in Betting Strategy

  • Assessing Value: Savvy bettors look for value in odds, where the potential return exceeds the risk. If you believe a team with 3.00 decimal odds has a greater chance of winning than the odds suggest, you've identified a value bet.
  • Risk Management: Understanding odds helps bettors decide how much to wager. For instance, betting on high odds (e.g., +500) may offer a significant return but with a lower probability of winning, necessitating smaller bets to manage risk.
  • Betting Markets Comparison: Odds vary across betting markets for the same event, allowing bettors to find the best value. For example, comparing moneyline to point spread odds might reveal opportunities for hedging bets or exploiting discrepancies in bookmaker evaluations.

Odds and Betting Behavior

  • Public Perception vs. Reality: Odds are influenced by public betting patterns. A heavily favored team might not always have the best chance to win, but popular opinion can skew the odds, creating opportunities for "sharp" bettors to bet against the public.
  • Line Movement: When a lot of money is wagered on one side, bookmakers may adjust the odds to balance the action, protecting their interests. Observant bettors can exploit these movements by timing their bets before significant shifts occur.

Types of Betting Markets

Understanding the various market types is crucial. Here are some of the markets you can expect to find at the top online US sportsbooks, each with its own unique characteristics and strategies.

Betting TypeDescriptionExample
Moneyline BetsSimplest form, pick the winner.New York Yankees (-150) vs. Boston Red Sox (+130); bet $150 on Yankees to win $100.
Point Spread BetsBetting on a team to win by a specific margin.Los Angeles Lakers -5.5 against Miami Heat; Lakers need to win by 6 points or more.
Totals (Over/Under)Betting if total score is over or under a set number.Over/Under set at 48.5 points for a Dallas Cowboys vs. Philadelphia Eagles game.
ParlaysCombining multiple bets, all must win for payout.A parlay with three MLB games where all chosen teams must win.
Proposition Bets (Props)Bets on specific game events or achievements.Betting on LeBron James to score the first basket in a Lakers game.
FuturesLong-term bets on season or tournament outcomes.Betting on the Chicago Bulls to win the NBA Championship at the season's start.
TeasersSimilar to parlays with adjusted point spreads for lower risk.A two-game NFL teaser with adjusted spreads in bettor's favor.
Live BettingBetting during the event, with changing odds.Betting on the next team to score in a live New York Knicks vs. Brooklyn Nets game.
Asian HandicapBalancing odds with a handicap set on teams.New England Patriots start with a handicap of -1.5 goals against the Buffalo Bills.
Exchange BettingBetting against other bettors, not the sportsbook.Offering a bet on the Houston Astros and waiting for another bettor to match it.
Spread BettingBetting on the accuracy of a prediction.Betting on the exact score difference in a Green Bay Packers vs. Chicago Bears game.
Each-Way BetsA bet split into a win part and a place part (horse racing).Betting on a horse to win or place in the top three in the Kentucky Derby.
AccumulatorsLike parlays, but with more selections.A five-match accumulator in the NBA where all five selections must win.
Double ChanceBetting on two out of three possible outcomes.Betting on the Toronto Blue Jays to either win or draw in an MLB game.
Correct ScoreBetting on the exact final score of a game.Predicting the final score of a San Francisco 49ers vs. Seattle Seahawks NFL game.

Understanding Odds and Betting Markets FAQs

Understanding Odds and Betting Types
What is sports betting?
What are the different types of sports betting?
What are odds, and how do they work?
How do I read American odds?
What are the different types of bets I can make?
How can I engage in responsible gambling?
Where can I find information on the best US Sportsbooks with diverse betting markets and competitive odds?
Betting Community and Culture
How do online forums contribute to the sports betting community?
How does social media impact sports betting culture?
What are betting clubs, and how do they benefit bettors?
What is the significance of responsible gambling advocacy within the community?
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Meet Our Authors

Paruyr Shahbazyan began his business career in 2000 as a private entrepreneur. Over thirteen years, he developed a deep understanding for business and leadership, laying a solid foundation for his professional journey.

In 2013, Paruyr stepped into the sports and betting industry as the founder and president of Bookmaker Rating. This online mass media platform, which he led until 2020, focused on providing in-depth analysis and insights in sports betting, earning a reputation for its quality content. 

Continuing his innovative approach in 2022, Paruyr co-founded Azuro, a decentralized betting protocol. This venture showcases his dedication to integrating advanced technology in the evolving landscape of sports betting. Through these diverse experiences, Paruyr has continuously influenced and shaped the betting industry, driving new trends and setting high standards.

 ExperienceYear
Engaged in private entrepreneurship2000-2013
Founder and President at Bookmaker Rating, an online platform focused on sports and betting2013-2020
Co-founder at Azuro, a decentralized betting protocol2022

"Innovation in sportsbetting comes from a deep understanding of both technology and the human element of sports." 

- Paruyr Shahbazyan, Founder, RG

 

Principles and Ethics

Paruyr Shahbazyan's core beliefs lie in the power of informed decision-making and integrity in the betting industry. He understands that the foundation of successful betting is not just about odds and predictions, but also about the trust and reliability of the information provided. Paruyr advocates for a betting environment where transparency and knowledge are paramount, ensuring that bettors are well-equipped with accurate data and insights.

Strategic Vision

Paruyr's vision is to revolutionize the sports betting industry through the integration of technology. He sees the future of betting as a blend of traditional sports knowledge with innovative tech solutions, like decentralized protocols, to enhance user experience and fairness. His aim is to create platforms that are not only user-friendly but also uphold the highest standards of ethical betting, contributing to a more responsible and enjoyable betting culture.

Future Perspectives

Looking towards the future, Paruyr envisions a betting landscape that is more inclusive, technologically advanced, and globally connected. He anticipates a significant shift towards more decentralized and transparent betting systems, driven by blockchain technology. Paruyr is committed to being at the forefront of this change, continuously exploring new possibilities and innovations that can redefine what it means to engage in sports betting in a digital world. His focus is on building systems that prioritize user empowerment, fairness, and the global growth of the sports betting community.

 

Sol Fayerman-Hansen
Sol Fayerman-Hansen
Editor-in-Chief

Sol's interest in sports was sparked at a young age, inspired by athletes such as Barry Sanders, Michael Jordan, and Wayne Gretzky. This early fascination evolved into a deep-seated passion, guiding him toward a career in sports journalism in 2007. Over the years, Sol has contributed thousands of articles and reviews to dozens of online platforms, sharing his research, knowledge, and perspectives.

“In the world of sports betting, truth is more valuable than any bonus offer.”

ExperienceYear
Content Manager, OnlineCasinoReports2012-2021
Sports Journalist, Dottraffic2009-2011
Content Writer, HouseTech2007-2009
Cristina Varela Galan
Cristina Varela Galan
Problem Gambling Expert

Cristina used to work as a Psychology Assistant in the Bizkaia Pathological and Risky Gamblers Association. She was also part of a research team in Deusto University, specializing in pathological gambling area. While working there, she managed to develop her own project 

 “Exploring the association between emotional regulation, alexithymia, stressful life events and gambling in adolescent and young adult women”.

Nick Ashbourne
Nick Ashbourne
Senior Writer

Nick has been fascinated with sports since he was first taken to a Toronto Maple Leafs game back in 1998, and he's written about them professionally since 2014.

Nick has covered baseball and hockey for outlets like The Athletic, Sportsnet, and Yahoo Sports, and his sports betting expertise has grown since its legalization in Ontario in 2022. 

Between 2022 and 2023 he worked for a betting startup called NorthStar Bets, and in 2024 he contributed to Oddspedia before joining the Responsible Gambling team.

Anna Kravtcova
Anna Kravtcova
Problem Gambling Expert

Ph.D. in organizational psychology, an internationally certified psychologist (EuroPsy 2022, Cognitive behavioural therapy of mindfulness 2020, International Society for Emotional Intelligence 2017, Russian Psychological society 2014, American Psychological Association(Society for Industrial and Organizational Psychologist) 2011), speaker of many international conferences (USA, Brazil, Portugal, Czech Republic, Russia, etc.). TEDx speaker.

Mike made the decision to dive headfirst into the booming world of sports betting fresh out of college. Back in the day, when 1-800 pick lines and sports pagers were all the rage, he couldn't resist the allure, having grown up idolizing sports legends like Sweetness, MJ, and Slammin Sammy. Mike dedicated his early years to the industry, tirelessly analyzing games, writing articles with free picks, and selling his expertise on reputable handicapping sites. Unlike many others, Mike was known for his integrity and only released one Game of the Year per sport, per season. His hard work and unwavering commitment paid off, earning him a devoted following and propelling his career to new heights. Then came the explosion of Daily Fantasy Sports. Believe it or not, companies like DraftKings and FanDuel used to pay Mike's company to increase their brand exposure. Now, those same industry giants don't even bother responding to his emails. While Mike appreciates the convenience of being able to place legal bets in his own backyard, he can't help but feel disheartened by what has become of the industry. People are being led astray, falsely believing that a mere $5 wager on a 20-team same-game-parlay will be their ticket to financial security. If there’s one thing Mike learned from making book back in the day, it’s that parlays are a bookie’s best friend. A bankroll is the only leg you have to stand on in the battle with the books, and Mike’s here to offer up advice on how to protect it.

Mark Medina
Mark Medina
NBA Reporter

Mark Medina is a longtime NBA reporter that includes stints as a Lakers blogger with The Los Angeles Times (2010-12), Lakers beat writer with the Los Angeles Daily News (2012-17), Warriors beat writer with Bay Area News Group (2017-19) as well as an NBA reporter/columnist for USA Today (2019-21) and NBA.com (2021-23). Medina is also an NBA insider with Fox Sports Radio and frequent contributor to CBSLA's SportsCentralLA with Jim Hill and with Spectrum Sportsnet.

Daria Tuboltseva
Daria Tuboltseva
Hockey Journalist

Daria went to St. Petersburg State University and earned a bachelor of international journalism. Working as a sports journalist from 2014, from 2016 as a hockey journalist. Covered 5 World Championships, 2022 Winter Olympics, 2020 World Juniors, 6 Gagarin Cup Finals. 

Owner of a telegram channel Coolest Game on Earth.

Integrative nutritionist specializing on sports nutritionology.