“Betting is the wagering of money or something of material value (referred to as “the stakes”) on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods.” (Exert taken from Gambling and the Law August 2010)
In an industry which is booming at the present time, a person or “punter” can pretty much bet on anything. The introduction of online betting tips has given access to people who would normally feel uncomfortable about strolling into their local high street bookmaker to place a bet a more comfortable environment in which to choose their selections. Over the coming weeks, Bet Advisor will produce an indispensable guide on understanding the complexities of betting and we start by going right back to basics.
Understanding the Odds
Regardless of what event you wish to bet on if you don’t understand how to read the odds then everything else is irrelevant. Odds are normally presented in two ways, fractional and decimal. Odds are simply a reflection of the chance or probability of a certain outcome in an event. In any event, every outcome has a chance or likelihood of taking place. Odds are simply an interpretation of those chances. The bookmakers form odds or prices to reflect those chances.
This format is favoured by bookmakers in the United Kingdom and Ireland. Fractional odds quote the net total that will be paid out to the bettor, should he or she win, relative to the stake. For example if you see something priced at 4/1 this would imply that the bettor stands to make £400.00 profit using a £100.00 stake. If something is priced at 1/4 this would imply that the bettor will receive £25.00 for a £100.00 stake. In either case should the bettor be successful, they always receive their original stake back, so if the odds are 4/1 the bettor receives a total of £500 (£400 plus the original £100).
Decimal odds are commonly used in Europe and are also known as European odds. To convert chances into decimal odds just take the chance as a % and divide into 100. The way to calculate decimal odds is as follows; the decimal odds of an outcome are equivalent to the decimal value of the fractional odds plus one. So if we take the example of the fractional odds above 4/1 would be quoted in a decimal value as 5. If we take the second example above 1/4 fractional would be displayed as 1.25 in decimal odds. Decimal odds are favoured by many online betting exchanges because they are considered easier to work with for trading purposes.
Converting fractional odds to decimal odds
To convert fractional odds to decimal odds we need to take the left hand side of the fraction (let’s call this L), divide by the right hand side of the fraction (we’ll call this R) and then add 1 to incorporate the returned stake. This could be summarised as:
(L / R) + 1
Taking odds of 6/4 as an example, the conversion to decimal odds here would require us to take 6, divide by 4 and then add 1:
(6 / 4) + 1
(1.50) + 1 = 2.50
Odds-on fractional odds are converted in exactly the same way, so if you come across fractional odds such a 1/3, the calculation would be:
(1 / 3) + 1
(0.33) + 1 = 1.33
The betting industry uses a wide range of terms. Below are some of the most popular:
When placing a bet, your stake is the amount of money which you risk or gamble. If you win then your winnings are calculated according to the odds at which your bet was agreed.
Odds on is the term used to describe a bet where you will need to stake more than you will win. In fractional terms this is anything with odds of less than EVS, so 1/2 is odds on. The word ‘on’ indicates that the odds are reversed. You may hear the expression 2/1 on referring to a selection with odds of 1-2
Also known as EVS, this is when the return will be double your stake. The profit on your bet will be the same as the amount you staked. Both you and the bookmaker are risking the same amount on the bet.
By Steve Mitchell (@barafundler)
Bet Advisors Essential Guide to Betting – Part 2
Bet Advisors Essential Guide to Betting – Part 3