Table of Contents
The proliferation of legal sports gambling in the U.S. has attracted millions of bettors. If you are a new player seeking to try your luck, it’s imperative to understand how sports betting odds work.
Sports betting odds are the price you pay for making a wager, reflecting your potential payout on a winning wager.
The best betting sites list odds for every wager, including moneylines, spreads, totals, parlays and futures.
What Are Betting Odds?
Sports betting odds involve two things.
First, sports betting odds outline a particular game or event outcome’s theoretical likelihood. Oddsmakers will set the lines according to the implied probability of either outcome happening. The sum of the probabilities exceeds 100%, as sportsbooks take a small cut on both sides of a line (called the vig).
Second, sports betting odds dictate how much money a bettor needs to wager to make a certain profit.
Odds are displayed in one of three ways: American, decimal or fractional. However, sports betting odds reflect just one part of the betting process.
What Are the Betting Lines?
Sports betting lines reflect a matchup’s expected margin of victory or defeat.
For example, the Boston Celtics and the Los Angeles Lakers are playing tonight. If oddsmakers calculate the Celtics will win by five points on average, they will set a line such as:
- Los Angeles Lakers +5
- Boston Celtics -5
This adds or subtracts points from a team’s final score based on if they are the favorite or the underdog. If you bet the Celtics -5, they would need to win by more than five points for the bet to win. If you bet the Lakers +5, they would need to win outright or lose by less than five points for the bet to win.
Every line has corresponding betting odds, but those lines almost always imply a 50% probability with the sportsbook cut (the vig) baked in.
Where Do Sports Betting Odds Come From?
Sports betting odds and lines come from sportsbooks and are offered to the consumer.
The odds can come from a third-party firm, such as Kambi Group, or through a sportsbooks’ in-house development. Sportsbooks that use the same third party for their odds typically have identical lines for many markets, but promotions often alter lines since bettors will hammer certain lines or markets.
Sportsbooks typically have a head oddsmaker overseeing the odds and lines for games. This oddsmaker relies on sources such as computer algorithms, power rankings and outside consultants to set prices.
American, Decimal & Fractional Odds
There are three ways to present odds.
The most important for you to know are American odds. These odds are based on a $100 bet but differ based on which side of the bet is expected to win.
If the bet is favored to win, you will see negative odds (minus sign). This means you need to risk a certain amount of money to profit $100. For example, if the odds for a bet are -150, a bettor would have to bet $150 to profit $100.
If the bet is not expected to win, you will see positive odds (plus sign). This means you need to risk $100 to profit a certain amount. For example, if the odds for a bet are +130, a bettor would have to risk $100 to profit $130 if the bet wins.
These odds can be scaled up and down. For example, a $10 bet with +130 odds would profit $13, returning $23 with your original $10 risk back. Conversely, betting $15 on a bet with -150 odds would profit $10, returning $25 with your initial $15 risk back.
See below for an example of American odds from Caesars.
The second format is decimal odds. Decimal odds are shown as one number representing the amount a bettor can win for every $1 wagered.
For example, a $1 bet on decimal odds of 3.0 would return $4 in total, a $3 profit, and the original $1 wager back. Conversely, a $1 wager on decimal odds of 1.85 would return $1.85 in total, a $0.85 profit, and the original $1 wager back.
Like American odds, these are scalable up and down. For example, placing a $10 bet on decimal odds of 2.0 would return exactly $20, or your original $10 wager plus a $10 profit.
Odds between 1.0 and 2.0 represent betting on a favorite, while odds above 2.0 represent betting on an underdog.
The third way is fractional odds. These are shown as fractions, such as 3/1 or 1/2. Multiplying the fractional odds by your wager shows what profit you would collect.
For example, 3/1 odds mean you profit three times the amount you wagered. A $1 bet at 3/1 would pay out $4 in total, or a $3 profit and your $1 original wager.
Conversely, 1/3 odds mean you profit a third of what you wagered. A $30 bet on 1/3 odds would return $40 total, or a $10 profit and your $10 original wager.
Are Odds Different Depending on Sport?
Odds are presented differently based on the sport, but only slightly. Understanding the simple differences is key to wagering on various athletic contests.
Football Odds
When betting the NFL, you must know the point spread (or line), the moneyline odds and the over/under.
For example, when examining a sportsbook, you may come across the following game listing:
The team with the plus sign on their point spread (Ravens) is the underdog and will get added points towards their final score (+4). Conversely, the team with the minus sign (Patriots) is the favorite and will have points deducted from their final score (-4).
The moneyline, listed in American odds, gives you the money you need to risk on either team to earn a certain profit. For the Ravens, you need to bet $100 to profit $200. For the Patriots, you need to risk $170 to profit $100.
Finally, the over/under is the estimated total points scored by either team (42.5), with both odds listed at -110. That means you can bet there will be either over 42.5 points or under 42.5 points scored by either team, but you will have to risk $110 to win $100 on either bet.
Basketball Odds
Basketball odds work like football odds. You need to know about the point spread (or line), the moneyline odds and the over/under.
When examining a sportsbook, you may come across the following game listing:
The point spread means the underdog (Lakers) will have five points added to their final score, while the favorites (Celtics) will have five points subtracted from their final score. You will need to risk $110 to profit $100 on either side.
The moneyline means you have to risk $100 to profit $175 on the underdog Lakers, while you need to bet $205 on the favored Celtics to profit $100.
The over/under is the estimated total points scored by either team, with both odds listed at -110. That means you can bet whether the combined score will be over 212.5 points or under 212.5 points, but you will have to risk $110 to win $100 on either bet.
Baseball Odds
Baseball odds work slightly differently from football and basketball odds. You will still see moneyline odds and an over/under, but the point spread (or line) will differ.
It’s too difficult to assign a point spread to baseball lines, so most sportsbooks assign a “run line” instead. The run line is 1.5 runs added or subtracted to either team with certain odds attached.
For example, when at a sportsbook, you may come across the following game listing:
The moneyline means you need to risk $100 to profit $135 on the Red Sox, while you need to risk $155 to profit $100 on the Yankees.
The total means you can bet there will be either over or under eight runs scored combined by both teams, and you will need to risk $110 to win $100 on either bet.
Betting the run line allows you to bet that the favorite (Yankees) will win by two or more runs or that the underdog (Red Sox) will win outright or lose by one run or less. To bet on either of those outcomes, you have to bet the associated odds. For example, if you wish to bet the Yankees -1.5, you must bet $140 to win $100.
Why Do Sports Betting Odds Change?
Sports betting odds change when a large amount of money is wagered on one side of a bet. Sometimes, you will see the odds change in real-time as you’re going to place a bet.
Sportsbooks bake their cut into the odds on both sides of a bet, and that cut is generally 10%. For sportsbooks to maximize their cut, bets on any line are as close to 50-50 as possible. If one side of a bet with 80% of the money on it wins, the sportsbook loses.
So, oddsmakers and sportsbooks will move lines to incentivize bettors to take a certain side to balance the book’s bottom line.
For example, if 85% of people are betting on the Ravens +4, the sportsbooks will win if the Ravens “cover the spread” and lose by four or fewer points. Therefore, oddsmakers will often shift the line to Ravens +3.5 or +3 to incentivize bets on the other side, thus making the split more even.
Sportsbooks also update odds frequently based on other factors like weather, injuries, etc. If the weather forecast for an NFL game predicts pouring rain and high winds, the books will lower the Over/Under since scoring points will be more difficult.
Odds will also change if star players are ruled out with injury. For example, if Patrick Mahomes has to sit out for the Kansas City Chiefs, they might go from being favorites to underdogs if they have to rely on their backup quarterback.
Sportsbooks will always update odds quickly to account for major updates like that, but monitoring the news can help you get a leg up on the rest of the betting public.
Lastly, odds shift constantly throughout a game once it’s in progress based on the score, which players are in the game and how much time remains. Live betting these odds changes can be profitable in certain scenarios, like if you bet on a team that falls behind early but comes back to win.
