How do the odds work?

Q: 📊 How do the odds work?

Discover The 4 components of sports odds .

In sports betting, the odds are undoubtedly the bettors' best ally in their quest to win. They are the main variable, along with your stake, of how much you can cash in. They are the essence of sports betting. They are either automatically generated or determined by humans. Generally, they are based on a number of criteria such as the performance, form, positioning and statistics of the various players, actors or teams. We bring you more explanations through this guide to getting started in sports betting.

Knowing the odds is essential

#1 - Principle and operation of sports betting odds

An odds is nothing more than a multiplier coefficient that a bookmaker sets. The purpose of this coefficient is to allow one to determine the likely payoffs after a bet. The odds are based on the probability of an event occurring or not. Therefore, if an event is more likely to occur, the value set by the bookmaker is low. On the other hand, if the event chosen has a low chance of happening, the value assigned is quite high.

Betting sites set the odds according to the risk they take. The odds can then be adjusted according to the number of bettors who have made a particular bet and also according to the turn of events. Most of them are in decimal form.

#2 - The different types of odds

As mentioned above, they reflect the probability of an event occurring. However, they are presented in a numerical format, of which the following are the best known.

American odds: if positive, it gives the winnings for a bet of KES100. If it is negative, it gives the amount to bet to win KES100. It is not very simple and only the Americans use this kind of writing: +400 / -150.
Decimal odds: This is the most common format used by most bookmakers today. They have even become the standard format in almost all European and African countries.. They are well known because decimal values are easy to learn. They are presented as follows: 1,01 ; 4,2 ; 1,75.
English or fractional odds: Initially, they were presented as a ratio or fraction (4/2; 9/1). These are less common now, but are still used in some countries. To better understand fractional odds, think in terms of win/bet.

If your bookmaker does not display the odds in decimal format, don't panic! It is usually a simple parameter to change in the interface.
In addition, you can find online odds converters such as this one.

#3 - How are the potential gains calculated?

The potential payout is the amount of money a bettor can collect after making a bet. Thus, the formula for potential win is as follows, with decimal odds:

Stake × odd = Potential winnings

So if you bet KES200 on the victory of a team A and whose odds are 2.10, in case of a real victory of the latter, you will cash KES420. So KES200 × 2.10 = KES420.

4# - How are the odds set?

The odds on sports betting sites are set according to the following scheme:

1- By a mathematical analysis

In order to avoid leaving the determination of the odds to the simple intuition of a big sports fan, the bookmakers have developed a number of criteria that come into play. These criteria are analysed by machines that are responsible for producing a value that is as representative as possible.

2- By an experienced tipster

However, the human input has not been entirely eliminated. When new data is released, a human is needed to follow the sports news and to notify changes as they occur.

3- By a market weighting

After that, it is necessary to check that the odds offered to the players are attractive enough to distribute the bets correctly. Indeed, if all the players only bet on the biggest odds, and the associated event occurs (even if it is unlikely), the bookmaker loses a lot of money. Therefore, according to the history of the betting investments, the bets should be balanced.

4- Through competition

Once the bookmaker has set his odds for a given event, he must make sure that he is not in a situation that would create a value bet or an surebet with one of his competitors. If this happens, experienced punters will rush to the odds in question and create an imbalance, which will be dangerous for the operator.

In the end, the odds do not only represent the probability of an event occurring. With experience, you will know the most interesting odds and may find value bets by yourself.