How To Calculate Betting Odds
Legally betting on sports is super fun and makes any game more exciting, but did you ever wonder how oddsmakers come up with the lines? In the following sections we cover how to calculate betting odds for point spreads, moneylines, parlays, payouts, and much more.
When it comes to learning how to bet on sports, our goal is to provide a complete picture so that readers can then take that knowledge and find a legitimate sports gambling site. We also deliver information on the legalities of sports betting for clarity on which venues US-based patrons can do business with.
Is It Legal To Bet On Sports In The USA?
Yes. Americans have access to legal sports betting sites that are state-regulated as well as online sportsbooks that operate overseas. If you are in a state that offers domestic sports betting and you are of legal minimum age, simply visit one and place a wager.
Offshore sportsbook sites are able to serve US-based bettors over the web because there are no state or federal gambling regulations that outlaw them. The sportsbooks that populate our list of online sports betting site reviews operate from an international jurisdiction and accept members at 18 years old.
How To Calculate Odds
Betting odds are based on the probability of winning for each team, athlete, or participant. The probability of a competitor winning or losing is based on several variables, including the following:
- Historical Performance
- Head-To-Head Record If Applicable
- Current Health & Injury Status
- Field Conditions If Applicable
- Home Field Advantage
- Individual Player Matchups Within Each Team
How Are Odds Calculated In Sports?
Once all decisions have been rendered regarding the pending game or athletic contest that is being predicted, oddsmakers can create a point spread, moneyline odds, and/or an over/under total based on those calculations.
Sports like basketball and football that feature high scores lean more toward the projected point spreads and the over/under in order to create the moneyline odds for winners.
In sports like baseball and soccer that are lower scoring, the moneyline odds are created first and dictate the differentials in the point spreads and assist in calculating the over/under.
How Is The Point Spread Calculated?
The point spread is the scoring differential that oddsmakers believe will separate both teams or competitors. Spreads are based on the overall probability, which is impacted by the same list of variables listed in the section above.
The home team is given an edge in the point spread, and in the sport of football, it is typically in the neighborhood of 2.5 points.
Team sports that are the most prominent in the realm of point spread betting include:
How To Calculate Parlay Odds
Parlay calculators are included in the betting slip at all of the online sports betting sites that we link to on this page for quick computations that reveal the massive payouts instantly.
For curious minded bettors that simply want to know how parlay odds are calculated, the probabilities of each outcome are simply multiplied.
For instance, moneylines of -500 and +12500, if combined into a parlay, would require conversion prior to being multiplied.
To convert negative moneylines into decimals, divide 100 by the whole number and then add 1 (ex. 100/500 = .2 +1 = 1.2).
For converting positive moneylines, divide 100 by the number, and add 1 at the end of the process (ex. 100/12500 = .04 +1 = 1.008)
Once all outcomes are created, multiply them for the parlay odds.
Using the above example, 1.2 (-500) multiplied by 1.008 (+2500) would produce a parlay moneyline of +15020.
How To Calculate Betting Odds Online
One of the best and most convenient features of becoming a member at one of the sites that populate our list of online sportsbook reviews is that a betting odds calculator is included at no extra charge.
Once a moneyline, point spread, or over/under total us clicked upon at an online sports betting site that we endorse, the bet slip will appear onscreen and ask for how much money the member wants to risk.
When gamblers enter the amount they want to wager, the total winnings are calculated and presented at the bottom right of the slip, with vigorish already subtracted.
The bet slips convert into parlay calculators once additional odds are selected (not allowed for lines labeled “singles only”) that converts the amount being bet upon a combination wager into updated odds and payouts.
How To Calculate Odds Of Winning?
The odds of winning are otherwise known as moneyline odds, and are presented in negative or positive three-digit or higher numbers. Moneylines are granted toward outcomes and reveal the odds of that outcome occurring.
A positive moneyline can be divided by 100, adding 1 afterward. For example. +1200 moneyline odds is the same as a 13/1 chance of winning.
The following table can be used as an example for how to calculate moneyline bets and learn more about how the odds convert:
|Fractional Odds||Moneyline||Risk vs. Payout||Chance Of Winning|
|1/10 (10-to-1 odds)||-1000||$1,000 bet nets $100||90%|
|1/3||-300||$300 nets $100||75%|
|1/2||-200||$200 nets $100||66.6%|
|EVEN||+100||$100 nets $100||50%|
|2/1 (1-in-two chance)||+200||$100 nets $200||33%|
|3/1||+300||$100 nets $300||25%|
|9/1||+900||$100 nets $900||10%|
How To Calculate Odds Payouts
Moneyline Odds – When wagering in positive moneyline odds, the amount that can be won will be more than the amount bet. This is usually because the outcome being bet on is not favored to win, but in the case of prop bets or futures, all outcomes can have positive moneyline odds.
In most cases, an outcome with negative moneyline odds will be the result that is predicted to win. Because of this, bets will earn less than the amount risked. Below are two examples of out moneyline odds will payout.
- Positive Moneyline Payouts: a $1 bet on a +400 moneyline will result in a net of $4.00 if it occurs
- Negative Moneyline Payouts: a $4 bet on a -400 moneyline is necessary to net $1 on a successful outcome
Point Spreads – Simple bets made against the spead will offer gamblers the chance to double their money if the team they wager on covers.
Because sports betting is not a massive revenue generator for sportsbooks, vigorish, or juice, is attached to the point spread that shave a few pennies on the dollar in favor of the house. Vigorish, or juice, is reflected in moneyline odds posted next to the point spread for both opponents in parenthesis.
It is for this reason that we described moneyline payouts first. Here is an example of a game line that include juice attached the spread betting options.
Dallas Cowboys @ Pittsburgh Steelers
- Cowboys Point Spread: -2.0 (-115)
- Steelers Point Spread: +2.0 (-105)
A one dollar bet on the Cowboys to cover the two point spread will result in a win of $1.85 if they can beat the Steelers by three or more points.
A $1 bet on the Steelers to cover the -2.0 points will win $1.95 if they can manage to lose by 1 point, tie Pittsburgh, or outright win the game.
How Are Horse Racing Odds Calculated?
The odds for betting on horse racing are initially set by oddsmakers based on historical performance of the horse, breeder, and/or rider, but are largely impacted by where bettors lay the most action.
The amount of money that is wagered on any outcome across the entire realm of sports affects the odds, but none more so than when betting on horseracing. This includes the odds for trifectas, exactas, and other horse racing bets.
Who Sets The Odds For Sports Betting?
Each sportsbook entity, whether domestic or offshore, houses a staff of odds compilers that use their own unique formular for setting the lines. Some oddsmakers are more famous than others, however, most remain private to avoid potential scrutiny.
Odds compilers are largely created by employees rising through the ranks of a sportsbook and learning the ropes first-hand. There’s no substitute for experience, and immersing oneself into the world of sports betting is the best way to become an odds compiler and create the lines that people wager on.