Odds in horse racing displayed in fractional oddsIf you are new to betting, then understanding odds is fundamental to everything. Whether you hear friends or pundits talking about them, read them in the paper or just see them at your favourite online betting site or even shop, knowing how odds work and how to calculate your winnings is hugely important.

“Ten to one” is not a time to knock off early for lunch and “seven to four” is not a training drill that a football team might undertake. Knowing the difference between 3/1 and “3/1 on” is also vital, whilst being aware that what one bookie, friend or pundit calls evens, another might refer to as even money or just “two”, whilst one site might have a horse priced at odds of 4/1, and another at 5.0.

To those unfamiliar with odds, this no doubt all sounds rather confusing. However, we will now explain what odds are, how they work, the difference between decimal and fractional odds, and also how to figure out what you stand to win from a bet if your luck is in.

What Are Odds?

Fractional odds
Fractional odds

Odds can be viewed as a description of what you stand to win when you make a bet. If you make a bet without knowing the odds, you may as well buy something without having any idea what it costs. A car that is good value for £25,000 will not be good value for £50,000 and you should view your bets the same way.

Value is key, and when it comes to betting, value is ascertained by comparing the odds with the chance of winning the selection has, be it a horse, football team, a golfer or anything else. As we will explain, the most common odds format in the UK is fractional, so in general, that is what we will use, unless specified otherwise.

Let us look at a game of football between Real Madrid and Real Sociedad, played in Madrid, where the hosts are expected to win. In betting we say they are the “favourites to win”, which can mean subtly different things depending on the context but by and large means the selection with odds that are shorter than any of the others.

  • Real Madrid Odds: 11/20 – Spoken as “11 to 20”, for every £20 you stake, you win £11 (and get your stake back) if Real win the game. This equates to 55p per £1, and can also be seen as 0.55/1, though you would never see it written that way.
  • Draw Odds: 13/5 – “13 to five” means that for every £5 you bet you get £13 in winnings, plus your £5 stake, if the match ends all-square. This means you win £2.60 per pound. This could be written as 2.6/1 but again, you would never see that.
  • Real Sociedad Odds: 6/1 – Sociedad would be described as the outsiders, or underdogs and “six to one” means that every pound you stake will see the bookie give you seven back – £6 in winnings and your £1 stake – if Sociedad are victorious.

There are a number of things to note here; first, as said, these odds explain what you stand to win. You can bet any amount you want at such odds (subject to any limits the bookie might have) but let us assume you decide to bet £10. If you bet £10 on Real Madrid and they win, you would get a total of £15.50 back – £5.50 in winnings, plus your £10 stake. Successfully back the stalemate and your £10 would return a total of £36, again that includes your £10 initial wager. Last of all, if you fancy an upset and opt to back Sociedad, you would receive £60 winnings and your £10, for a total return of £70, if they get the job done.

How Do Odds Work?

Decimal odds
Decimal odds

When we are talking about fractional odds, such as 4/1, the number on the right, the denominator in maths terms, refers to the stake. You must bet this much to win the first number, on the left, the numerator. So, if the odds are 4/1 and you want to win £4, you would bet £1.

With fractional odds, you always get your stake back as well, so a £1 bet at 4/1 leads to a total return of £5, with £4 of that your winnings from the bookie and £1 your initial stake being returned. When prices are “to one”, for example, 8/1, or 12/1, or 50/1, or 250/1 or – famously in the case of Leicester City’s Premier League triumph – 5,000/1, things are relatively straightforward.

Things are a little more complex where the denominator is not one, with bookmakers’ odds often having a two, five, eight or some other number there reflecting the stake. That would be fine if your desired stake happened to be two, five, eight, or whatever else the denominator was, or even a multiple of that, such as four or six (in the case of two).

But many punters might want to bet in multiples of five or 10, or even a random figure like £8.27! This can make things seem rather complicated but as we shall explain shortly, it is still simple enough to work out your winnings.

What Is “Odds-On”?

Before we look at working out what your winnings will be, we should consider the term “odds-on”. This is such a commonplace term that it has even entered everyday parlance, with the phrase “odds-on favourite” being used even if there is no real mention of or relation to gambling. If you did not understand odds, you might assume that it just meant something that is very likely to happen.

To an extent this is actually true, with the phrase odds-on referring to any price that is shorter, lower, than evens. If we ignore, for now, the fact that odds do not perfectly mirror probability – because the bookie has to factor in a margin for themselves – then odds-on would refer to a selection that is more likely to happen than not to happen.

So, if something had a 50.01% chance of occurring, its odds would be ever so slightly beneath evens and, therefore, odds-on. As before, this is assuming the odds do exactly mirror probability. 19/20 is a not uncommon odds-on price, meaning that if you stake £20, your return will be £39, with £19 winnings. In other words, with odds-on bets, you win less than you stake.

Upon hearing that, some newcomers might think well why bother? But, of course, as stated, as well as the winnings, you also get your stake back, so even the shortest odds-on price leaves the punter in the black should they win. If not, why indeed bother?! Nonetheless, when you place a wager at odds-on, you are risking more than you stand to win.

Whilst a price of 8/11, 19/20 or 10/11 will typically be spoken as “eight to 11”, “19 to 20” or “10/11”, you might also hear “11 to eight on”, “20 to 19 on”, or “11 to 10 on”, respectively. When odds are described as “on”, that is short for “odds-on”, though this is usually more common where the price is much shorter, such as 1/6 – often “six to one on”, rather than “one to six”.

You may also hear the phrase “odds against”, though this is less common. Odds above evens are odds against but as this is more typical, these are usually just accepted as being “against” almost by default. As such, if someone says “four to one”, they will always mean four to one against, rather than four to one on (or 1/4).

Calculating Winnings

Calculator and bag of money

You will not normally need to calculate your winnings because this is all done for you, whether you make your wager online or in a betting shop. Indeed, place a bet at your favourite betting site, and your potential winnings will usually be shown on the slip as soon as you enter your stake, and certainly once the bet is placed and confirmed.

However, if you want to make sure that your returns are correct, want to check what you stand to win in a betting shop, or agree with us that it is important to understand something so fundamental, calculating your winnings is easy enough.

We look at decimal odds below and explain that in order to calculate what you stand to win from a bet, you can very simply multiply your stake by the decimal odds. There are different ways to work out your potential returns with fractional odds but probably the easiest is to convert them into decimals and then simply multiply by how much you wagered.

For some odds and stakes you might intuitively grasp what you might win, assuming you now understand how odds work. For example, should you bet £10 at 10/1, it may be straightforward for many that winnings will be £100, with £110 returned including your stake. Let us, however, imagine that you made a bet of £126.98 at 8/13. Now even Carol Vorderman and Rachel Riley might need a moment or two to think about that.

To convert a fractional price into a decimal one, you essentially carry out the mathematical function that those odds can be read as. This means that 8/13 can be viewed as eight divided by 13, which a calculator tells us is 0.61538462. Typically, this would be rounded to 0.62 and we then add one to get the fractional odds. As such, 8/13 is the same as 1.62, though you may find that if you place a bet using fractional odds, the bookies calculate the winnings using the non-rounded figure. There is no need to think too much about this though as any difference would be tiny, even with quite a large stake.

You then simply multiply 1.62 by the £126.98 stake, giving a result of £205.71 (or £205.70 if the bookie doesn’t round it up). For reference, had you made the bet at 8/13 (so your settings with the bookie were for fractional odds), that return would have been slightly lower, at £205.12.

If you tend to place large bets and believe that every penny matters, this does highlight the possibility of maximising returns by checking if the fractional odds result in a decimal price that will be rounded up or down. In this case, the 0.61538462 gets rounded up (with one added) to 1.62, so switching your preferred odds format with the bookie to decimal will result in a slightly bigger payout.

If the fractional odds would be rounded down, as in the case of 8/15 (0.533333 becomes 1.53), then your returns will be best using the fractional format. So, whilst we initially said that there is no real need to understand how winnings are calculated, this little trick shows how a fuller comprehension can lead to you eking out a few more pennies or even pounds from the bookie.

We should also note, however, that much as there is value in at least having a basic understanding of the underlying maths, it should come as no surprise that various online calculators exist that can do all of this for you. There are tools and charts to convert one odds format into another, whilst there are also calculators that will work out your winnings for even the most complex wagers.

Implied Probability & Value

If you are happy to talk maths, then another thing worth understanding is implied probability. There are, once again, calculators online that can do it for you but even so, you need to grasp the concept in order to know what the numbers mean.

Implied probability is the term given for the likelihood of something happening that the odds indicate, or imply. It can be viewed as betting odds converted into the percentage chance of the selection winning. If we flip a coin, there is a 50/50 chance of heads coming up and if two mates were to wager on the coin toss the odds would be evens.

This is because evens gives an implied probability of 50% and in such a bet between friends the odds are “fair”, which is to say neither side is factoring in a margin. To calculate implied probability, you divide one by the decimal odds, so we can see that any bet priced at evens (2.0) has an implied probability of 50% (because one divided by two is 0.5, or 50%).

If a bookie believes something has a 50% chance of happening, they will offer odds below evens, for example 4/5. This creates an overround, or margin, for them, meaning that in theory no matter what the outcome of a match or event, they should still be able to pay their wages, taxes, and so on, and have some money left over.

A serious punter trying to win in the long term needs to seek value bets. This is where the odds are not worse than the implied probability, but better. So, for example, if you can find a bet that you think has a 50% chance of success but the odds are 11/10 (or even any price over evens), this would be described as a value bet.

Fractional v Decimal Odds

Fractional & decimal

Whilst fractional odds are considered standard in the UK, many punters are increasingly familiar with decimal prices. Whatever format we use for odds, their function and purpose are the same, so they can really be viewed as different languages. So, whether you say, yes, si or oui, it all means the same thing (to someone who speaks English, Spanish and French). In the same way, someone who knows about both decimal and fractional odds sees straight away that whether a bookie has odds of 2/1, or 3.0, they mean exactly the same thing.

Decimal odds have become far more common over the past 20 years or so as they are used at betting exchanges. In addition, many feel that decimal odds are easier to understand and compare. These two formats are not the only ones though and there are various Asian odds formats, as well as an American odds system that we have a separate article about.

Decimal odds include the stake in the return, so while evens is also shown as 1/1 in fractional, in decimal prices it is 2.0. The other main difference with decimal odds is that they are always based on a stake of one unit. So 2.0 indicates what your total return is including your stake of one unit, for example £1.

If we refer back to our Real “derby” above, outsiders Sociedad were 6/1. In decimal prices this is 7.0. As such, if you bet £1, you get £7 back – £6 in winnings and the £1 stake. If you bet £30 you would get £210 (£30 x 7). Many punters prefer decimal odds because unless you have always used fractional ones and are very familiar with them, decimal prices are far easier to compare (because they are always based on a stake of one). In addition, it is easier to calculate your returns because you always just multiply the decimal odds by your stake.

Example Odds

The table below gives you some common examples of odds across the three major formats, plus where you are most likely to see them.

Fractional Odds (UK) Decimal Odds (Europe, Australia and Betting Exchanges) American Odds (USA)*
1/5 1.20 -500
4/5 1.80 -125
1/1 (eves, or even money) 2.00 +100
2/1 3.00 +200
9/2 5.50 +450
16/1 17.00 +1600
33/1 34.00 +3300

* As noted earlier, for more information about US odds, check out our article on the subject.