Want to learn to bet? Betting 101 is the place to start.
Fixed-odds markets look quite straightforward, but do you totally understand what the prices mean?
Let’s make sure.
A fixed-odds price is just an expression of the perceived likelihood, or probability, of that selection winning. The bookmaker will set his opening market based on the percentage chance that he thinks each selection has of winning. If there’s a dominant horse running against a very weak field, for example, he may conclude it has a 90% chance of winning the race, even though there may be 15 horses running.
It’s the same whether it’s a sporting match between two teams, or a large race or tournament with dozens of entrants. There’s a probability of each winning, which can be expressed with a percentage.
Toss of the coin
We’ll start with the simplest example possible: a coin toss. There’s a 50% chance of the result being heads, and 50% chance of it being tails.
To convert the percentage into decimal odds, you just divide it into 1.
1 / 50% = $2.00
So your price for both heads and tails is $2.00 each. And that’s the price you get paid out. Imagine you and a mate make a $10 bet on the outcome of a coin toss: heads you win, tails he does.
You both put in your $10, and the winner gets paid $20 – odds of $2.00. Simple.
The calculation is the same for other two-outcome markets where the odds aren’t even. For example, a match between a very good team which the bookie thinks has an 80% chance of winning, and a poorer team which he rates a 20% chance.
Team A: 1 / 80% = $1.25
Team B: 1 / 20% = $5.00
For markets with a larger number of outcomes – such as a tournament or a horse race, it’s no different again. Each outcome simply gets a percentage weighting. All that matters is that the total adds up to 100% – because there’s a 100% chance that any one of the selections will win.