Odds and probability
Odds tell you two things: how much a bet pays, and how likely the bookie thinks it is. By the end of this lesson you'll know:
- how to read decimal odds
- how to turn odds into a percentage chance
- why back and lay odds are never quite the same
What odds mean
We use decimal odds in matched betting, like 2.00 or 3.50. They're easy to compare at a glance, and exchanges use them by default.
To work out what a winning bet pays back, multiply your stake by the odds:
- £10 at 2.00 pays back £20
- £10 at 3.50 pays back £35
- £10 at 6.00 pays back £60
Many bookies show fractional odds like 2/1 by default. To convert, divide the fraction and add 1: 2/1 becomes 3.00, and 5/2 becomes 3.50. Easier still, switch your bookie account to decimal odds in its settings, and you'll never need to convert.
Odds as a chance
Every price is also a guess at how likely something is. To turn odds into a percentage, divide 1 by the odds:
| Odds | Sum | Implied chance |
|---|---|---|
| 1.50 | 1 ÷ 1.50 | 67% |
| 2.00 | 1 ÷ 2.00 | 50% |
| 4.00 | 1 ÷ 4.00 | 25% |
| 10.00 | 1 ÷ 10.00 | 10% |
This is called the implied probability. The lower the odds, the more likely the bookie thinks it is.
It's also the break-even point. A bet at 4.00 needs to win at least 25% of the time just to break even. You'll use that idea again in value betting.
Common mix-up: returns vs profit
Decimal odds show what you get back, and that includes your own stake.
£10 at 3.00 pays back £30. But £10 of that was yours to begin with, so your profit is £20.
This matters most with free bets. A free bet doesn't give you the stake back, so a £10 free bet at 3.00 pays £20, not £30. That's why free bets are placed at higher odds, which you'll see in the free bets lesson.
Why the numbers never quite add up
Bookies build in a margin. Add up the implied chances for every outcome in a match, and you'll get more than 100%:
| Outcome | Bookie odds | Implied chance |
|---|---|---|
| Home win | 2.10 | 47.6% |
| Draw | 3.40 | 29.4% |
| Away win | 3.60 | 27.8% |
| Total | 104.8% |
That extra 4.8% is the bookie's edge. It's how they make money over time, whoever wins.
Exchanges show two prices. Each outcome has a back price and a slightly higher lay price, for example back at 3.00 and lay at 3.05. You lay at the higher one. The closer it sits to the bookie's back price, the less a matched bet costs you.
Why this matters for matched betting
Two rules come straight out of this lesson:
- Look for close odds. The smaller the gap between the bookie's back odds and the exchange's lay odds, the smaller your qualifying loss. Backing at 2.00 and laying at 2.04 is great. Laying at 2.30 would cost you far more.
- Free bets suit higher odds. Because a free bet only pays the profit, higher odds keep more of its value. That's why qualifying bets usually go on low odds, and free bets on higher odds.
You don't need to hunt for close odds by hand. The Oddsmatcher does it for you.
Recap
- Decimal odds × stake = what you get back, including your stake.
- 1 ÷ odds = the implied chance, and the win rate you need to break even.
- Close back and lay odds keep your losses small. Free bets go on higher odds.
Put it into practice: the Oddsmatcher guide.