Relation Between Sports Betting And Probability
Sports betting, odds and probabilities go hand in hand. One has to be able to calculate the probability or the likelihood of an event occurring based on the odds provided if they want to be able to place successful and profitable bets. The probability will also be indicative of potential profits. So you can see knowing how they work is beneficial. Fortunately for us, deducing probabilities isn’t difficult at all, and this article will tell you how to do that.Sports Betting And Probability
As a punter, you will probably hear the word “implied probability” being thrown around a lot. Bur what does it mean, and how do you calculate it based on the limited information we’re given? Read on to find out.
The implied probability of an event is essentially the conversion of the odds of an event, usually expressed in decimals, fractions or positive/negative whole numbers, into a percentage. This percentage indicates how likely it is for a particular outcome to occur. Based on the type of odds, there is a particular way to calculate probabilities. So grab your calculators, and let’s take a look at each of them.
1. Decimal odds
You’ll probably see decimal odds all the time if you live in Europe, or if you like betting on European, Australian, Canadian or New Zealand sports and tournaments. The formula you need to follow for decimal odds is quite simple.
(1 ÷ decimal odds) × 100 = probability
Easier still is 100 ÷ decimal odds = probability
Let’s say that the odds of a particular event is 1.20. Here’s how you would calculate the probability of the event occurring.
(1 ÷ 1.20) × 100 = 83% or 100 ÷ 1.20 = 83%
2. Fractional odds
Fractional odds are quite common in the United Kingdom and Ireland Converting fractional odds to probabilities is a little more complicated. To calculate implied probability, you would need to take the denominator (the second number) and divide it by the sum total of the numerator (first number) and the denominator. You multiply this total by 100.
(Denominator ÷ (Numerator + denominator)) × 100 = probability
The odds are 2/7 for example.
7 ÷ (2+7) × 100 = 77%.
3. Moneyline odds
Moneyline odds are quite unfamiliar to those outside North America. They’re represented by a positive and a negative value. Let’s take a look at negative moneylines first. The team with a negative value is always favorite to win. This is the formula you would follow.
( - ( negative moneyline odds ) ) ÷ ( - (negative moneyline odds ) ) + 100 ) × 100
Here’s how you would calculate the probability if the odds are -200
( - (-200) ) ÷ ( - (-200) ) + 100 ) × 100
200 ÷ (200 + 100) × 100 = 66%
For positive moneyline odds, you would calculate the probability by dividing 100 by the sum of the positive moneyline odds and 100. Multiply this by 100.
Let’s say that the odds are +175, here's how you'd calculate the probability
(100 ÷ (175 + 100) ) × 100 = 36%.