When it comes to sports betting, understanding odds is crucial. In South Africa, as in many other countries, betting is a popular pastime, with numerous betting platforms offering competitive odds on a wide range of events. However, not all odds you see on these sites reflect the true probability of an outcome. This is where understanding how to calculate true odds comes into play, giving you a better edge in your betting decisions.
What Are True Odds?
True odds in betting refer to the actual probability of an event occurring, based purely on statistical data and without any adjustments made by the bookmaker. Unlike the odds displayed on a betting site, which often include the bookmaker’s margin or “vig” (short for vigorish, the bookmaker’s cut), true odds give an unaltered view of the likelihood of an outcome. They are essentially the most accurate reflection of the event’s probability.
For example, if a team has a 50% chance of winning a match, the true odds would be 2.00 in decimal format or 1/1 in fractional format. These odds are directly tied to the probability of the event. If the bookmaker were to offer these true odds, it would mean the odds fully reflect the event’s actual likelihood, with no added profit margin for the bookmaker. However, in practice, bookmakers adjust these odds slightly to ensure they make a profit. This adjustment can skew the true odds, making it important for bettors to understand how to calculate the true probabilities behind the odds they see.
The reason true odds are essential for a bettor is that they help you evaluate whether the odds offered by the bookmaker are fair or not. When you compare the true odds to the odds available on a betting site, you can identify discrepancies. If the bookmaker’s odds are higher than the true odds, this could be a sign that you have found a value bet. On the other hand, if the bookmaker’s odds are lower, it could mean that the bet is overpriced. In either case, knowing the true odds allows you to make more informed decisions about where to place your bets.
Ultimately, understanding true odds can significantly improve your betting strategy. When you’re able to calculate the true probability of an outcome and compare it with the bookmaker’s odds, you gain a better understanding of which bets are worth taking. By regularly using this knowledge, you can spot favorable betting opportunities that might not be immediately obvious, giving you an edge over the average bettor who only relies on the odds provided by the bookmaker.
Types of Betting Odds
| Odds Type | Description | How It Works | Example | Calculation |
| Decimal Odds | Most commonly used format in South Africa. Represents the total amount you win for each unit staked. | A bet of R100 at odds of 2.00 will return R200 if successful. | Decimal odds of 2.00 | R100 stake x 2.00 = R200 (total return including stake) |
| Fractional Odds | Often used in traditional betting, especially in horse racing. Expressed as a ratio of profit to stake. | A bet of R100 at 5/1 will win R500 if successful. | Fractional odds of 5/1 | (R100 x 5) = R500 (profit) + R100 stake = R600 total return |
| American Odds (Moneyline) | Used by some international betting sites. Positive and negative values show potential profit or required stake. | Positive odds (e.g., +200) show how much you win from a R100 stake, while negative odds (e.g., -150) show how much you need to stake to win R100. | American odds of +200 (positive) | R100 x (200/100) = R200 profit (total return = R300) |
| American Odds (Negative) | Negative odds show how much you must stake to win R100. | A bet of R150 at odds of -150 would give you a profit of R100 if successful. | American odds of -150 (negative) | R150 stake to win R100 profit |
| Hong Kong Odds | Used in some betting regions. Similar to decimal odds but without including the stake. | A bet of R100 at 1.50 will return R150, but the profit is R50, as the stake isn’t included in the odds. | Hong Kong odds of 1.50 | R100 stake x 0.50 (profit) + R100 stake = R150 total return |
How to Calculate True Odds
Now that we’ve covered the basics of odds, let’s look at how to calculate true odds, depending on the type of odds you’re dealing with. Here’s a detailed breakdown:
- Calculating True Odds with Decimal Odds
To calculate true odds from decimal odds, you need to understand the implied probability. The formula is as follows:- Implied Probability = 1 / Decimal Odds
- Example:
If the decimal odds are 2.50, the implied probability is:- Implied Probability = 1 / 2.50 = 0.40 or 40%
- This means that the bookmaker is implying there’s a 40% chance of the event occurring. If you believe the actual chance is higher, you may have found a good value bet. The higher the true probability in comparison to the bookmaker’s implied probability, the better the bet for you.
- Calculating True Odds with Fractional Odds
To calculate true odds from fractional odds, use this formula:- Implied Probability = Denominator / (Numerator + Denominator)
- Example:
For fractional odds of 3/1, the implied probability would be:- Implied Probability = 1 / (3 + 1) = 1 / 4 = 0.25 or 25%
- This indicates that the bookmaker is assigning a 25% chance to the event. Fractional odds are commonly used in traditional betting, such as horse racing. Understanding how to convert these odds to implied probabilities can help you make smarter betting decisions by comparing them to your own evaluation of the event.
- Calculating True Odds with American Odds
American odds can be more complex, but the formula to calculate the implied probability is simple once you understand the differences between positive and negative odds.- For positive odds (e.g., +200):
- Implied Probability = 100 / (Odds + 100)
- For negative odds (e.g., -150):
- Implied Probability = Absolute Value of Odds / (Absolute Value of Odds + 100)
- Example for positive odds (+200):
- Implied Probability = 100 / (200 + 100) = 100 / 300 = 0.33 or 33.33%
- This means that the bookmaker is suggesting there’s a 33.33% chance of the event occurring.
- Example for negative odds (-150):
- Implied Probability = 150 / (150 + 100) = 150 / 250 = 0.60 or 60%
- For positive odds (e.g., +200):
How Bookmakers Adjust Odds
Bookmakers seldom offer true odds because they need to ensure a profit on every bet placed. To accomplish this, they incorporate something known as the “vig” or “juice” into the odds. The vig is essentially the bookmaker’s margin, which is built into the odds to make sure the bookmaker wins, regardless of the outcome of the bet. It’s a way for them to guarantee a profit over time, which is why the odds you see might not exactly match the true probability of an event.
For example, let’s say the true odds of a coin toss are 2.00 (even money), meaning there’s a 50% chance of heads or tails. However, the bookmaker might offer you odds of 1.90 instead. The difference between the true odds and the bookmaker’s odds (in this case, 2.00 versus 1.90) is where the vig comes into play. The bookmaker adjusts the odds slightly, which might seem like a small difference, but over many bets, it ensures they’ll make a profit in the long run.
The vig ensures that the bookmaker is always ahead, regardless of whether the bet wins or loses. This is why when you place a bet, the odds often don’t reflect the true probability of the event occurring. For example, in a fair bet, both outcomes (heads or tails) would have equal odds. However, the bookmaker adjusts these odds to ensure that they’re guaranteed to make money, even if the bet is perfectly balanced.
To spot overpriced odds, you need to be able to compare the bookmaker’s offered odds with the true odds of an event. A bookmaker who sets odds with a high vig might offer odds that look tempting at first glance, but these odds can be misleading. The odds may appear more attractive, but in reality, they carry an unfavorable edge for the bettor. By calculating true odds and comparing them to the odds provided by the bookmaker, you can identify when odds have been mispriced, giving you the advantage of spotting opportunities where the bookmaker’s margin might be higher than expected.
Using True Odds to Your Advantage
| Strategy | Description | When to Use | Example | Benefit |
| Identifying Value Bets | Identify bets where the true odds are better than the bookmaker’s odds. | When the true odds of an event are greater than the offered odds. | If you calculate the true odds at 2.50 (implied probability of 40%) but the bookmaker offers 3.00, you have a value bet. | Maximizes profit potential by betting on mispriced odds. |
| Matched Betting | Take advantage of bookmaker bonuses and true odds to ensure a risk-free bet. | When a bookmaker offers promotions or free bet bonuses. | If a bookmaker offers a free bet or bonus, use it in a way that exploits both the bookmaker’s promotional offer and the true odds. | Minimizes risk while ensuring guaranteed returns. |
| Arbitrage Betting | Place bets on all possible outcomes of an event with different bookmakers to lock in a profit. | When different bookmakers offer significantly different odds. | If one bookmaker offers odds of 2.00 for one outcome and another offers 2.20 for the opposite outcome, you can place bets on both outcomes and guarantee a profit. | Guarantees profit by exploiting odds discrepancies across sites. |
| Expected Value Betting | Calculate the expected value of a bet by comparing the bookmaker’s odds to the true odds and staking accordingly. | When you have a good understanding of true odds and bookmaker odds. | If the bookmaker offers odds of 1.90 and the true odds are 2.00, the expected value can be calculated and used to determine the optimal stake. | Optimizes betting stakes to enhance long-term profitability. |
Tools to Help You Calculate True Odds
- Odds Converter
The Odds Converter is a useful tool that allows you to easily convert between different odds formats, such as decimal, fractional, and American. This helps you quickly compare odds across various betting sites and formats, making it easier to calculate true odds from any given set of odds. - Implied Probability Calculator
An Implied Probability Calculator automatically calculates the implied probability from various odds formats. Whether you’re working with decimal, fractional, or American odds, this tool will quickly give you the implied probability, which is crucial when you’re trying to assess the likelihood of an event occurring. - Value Bet Calculator
The Value Bet Calculator helps identify value bets by comparing the true odds to the odds being offered by the bookmaker. It helps you find situations where the true probability of an outcome is higher than what the bookmaker has priced, allowing you to make more informed betting decisions. - Betting Strategy Calculator
Some tools are designed to help you implement specific betting strategies, like expected value betting or arbitrage betting. These calculators help determine the optimal stakes and bets by evaluating the expected value or finding discrepancies in the odds across different bookmakers. - Bankroll Management Tools
These tools are essential for managing your betting bankroll. By using a bankroll management calculator, you can calculate the best amount to stake on each bet based on your total bankroll and your confidence in each bet. This helps you minimize losses while maximizing potential gains. - Odds Comparison Websites
Some online tools and websites provide a comprehensive comparison of odds offered by various bookmakers. These platforms aggregate odds data and allow you to spot discrepancies, ensuring you place bets at the best possible odds, whether you are calculating true odds or searching for value bets. - Betting Calculators for Specific Markets
Certain betting markets may require specialized calculators. For example, a calculator for betting on parlays or accumulator bets allows you to calculate the true odds and implied probabilities of multiple outcomes combined, ensuring your bets reflect accurate chances.
How Understanding True Odds Can Improve Your Betting Strategy
When you start betting, it’s easy to get caught up in the excitement of trying to predict outcomes. However, without understanding true odds, you’re merely guessing. True odds represent the actual probability of an event happening, free from the bookmaker’s margin or juice. By understanding true odds, you can make more informed decisions that are based on the actual likelihood of outcomes rather than the odds being manipulated for profit.
Knowing how to calculate and apply true odds enables you to spot discrepancies between the bookmaker’s odds and the true probability of an event. This is particularly helpful in identifying value bets, which occur when the bookmaker’s odds are higher than the true odds. By placing bets where the odds are in your favor, you increase your chances of long-term profitability.
Additionally, understanding true odds allows you to develop betting strategies that give you an edge. For example, matched betting or arbitrage betting both rely on a strong understanding of how odds work. These strategies can be difficult to execute without knowing how to calculate true odds, but when used correctly, they can offer guaranteed profits with minimal risk.
One of the biggest mistakes bettors make is placing bets based on the bookmaker’s odds without considering the true probability. Bookmakers adjust their odds to ensure they make a profit, which often leads to odds that don’t reflect the true chances of an outcome. By calculating true odds, you can ensure you’re getting fair value on every bet, increasing your chances of success over time.