Betting odds are a way of expressing probability, the likelihood that an event will occur. If you toss a coin, it will either come down as heads or tails. The odds are 1-1, or even.
If you roll a die, it could come up with any one of six sides, so the odds are 1 in 6.
Odds can be described as a ratio, a fraction, a percentage, or a decimal. If there are two possible outcomes (the coin toss), the odds are therefore 1:2, ½, 50% or 0.5. If there are six possible outcomes (the die roll), the odds are 1:6, 1/6, 16.7% or 0.167. These all mean the same thing.
In the UK, bookmakers tend to use fractional odds. Say you’re at the races and betting on ‘Old Nag’ to win the next race, and the odds are expressed as 2/5. It means that if ‘Old Nag’ wins you would profit two units on every five units you bet. A bet of £100 would win £40, so you would receive back £140 (including your initial stake).
Using decimal odds, the same bet would be described as follows. The odds for ‘Old Nag’ would be 1.40. This demonstrates (perhaps more clearly than with fractional odds) that for a bet of £100 you would win £40.
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When setting odds, bookmakers consider the likely outcome of the event, i.e. which player, team or horse will win, what the score will be, etc. But they also take into account what the public will think. The public will often bet on the home-grown talent, or well-known teams or players.
For instance, when Andy Murray is playing at Wimbledon, the odds are lower than they should be, because so many patriotic, once-a-year punters in the UK pile in to back him to win. This is not to suggest that Murray is not a good player - just that the likelihood of his winning a major title is not reflected in the odds available.
This provides the canny bettor with some great opportunities. Firstly, it means that lay odds for favourites will be good value. So if you believe Murray is unlikely to win Wimbledon, you can get low odds on a lay bet.
Secondly, it means that an underdog's odds are likely to be higher than they ‘should’ be. They will be attracting fewer bettors. This is especially so in football, where an English team plays a foreign team.
So if your knowledge and research suggests that an underdog has a better chance than the odds give them, they could be worth a bet!