How to Read Odds in Betting: Understand and Win

How to read sports betting odds is one of the most important things you need to know before you bet on sports in Canada. The odds tell you how much a wager will pay out and how likely a is to be successful. In this guide, I will break down how to read betting odds for the three main odds formats you will see in Canada: American (Moneyline), Decimal, and Fractional.

Sports betting odds represent two things: probability and potential payout. In other words, odds tell you how likely you are to win and how much money you’ll get if you win relative to your stake. Your stake is the amount of money you wagered (i.e., your bet amount).

If you put your stake down on an underdog, you will win more money than betting on a favourite. In the American odds format, underdogs have lower odds than favourites. I’ll break this all down more in detail below and throughout this guide.

For now though, let’s say a wager has +200 odds. This implies that the bet is not super likely to win, but it’s not a longshot either. If you bet $100 on this wager, you will get back $300—$100 from your initial stake and $200 in profit.

Positive (+) and (-) negative odds mean that the odds are written in the American odds format. This format is pretty much unique to Canada and the United States. It’s also a bit complicated, so don’t be ashamed if you found yourself confused and asking “How does sports betting work?” after looking at American odds.

The first thing you need to know about American odds is that positive numbers mean lower probability and lower numbers mean higher probability. If the Canucks have -150 odds and the Canadiens have +200 odds, the Canucks are more likely to win according to the odds. They are the favourites.

Beyond that, you should know that American odds are all relative to either a $100 wager or $100 in profit. Positive odds (+), tell you how much profit you will win from a $100 wager. Negative odds tell you how much you need to bet to win $100 in profit. 

Let me use the scenario from earlier to show you an example:

• A $100 wager on the Canadiens to win with +200 odds would pay out $200 in profit. 
• To win $100 in profit betting on the Canucks (-150), you need to wager $150. 

The positive and negative odds I broke down above is the way odds are written in the American or Moneyline odds format. This is just one of the three types of betting odds formats you might see at Canadian betting sites. The other two are fractional odds and decimal odds.

Here’s a table touching on the major differences between these three formats. You can see a more detailed definition of each below. 

Understanding American Odds (Moneyline)

As I previously explained, American odds use positive and negative numbers to represent how much you will win from a $100 wager and how much you need to wager to win $100.

For example:

• Bet $100 on +250 = win $250 profit.
• Bet $150 on -150 = win $100 profit.

Bigger numbers means higher returns and vice versa. The team with the larger odds is the underdog, while the other team is the favourite.

American odds is the standard format in Canada and the United States, so you’ll commonly see them used for North American leagues and American-centric sports like the NFL, NHL, and UFC.

Understanding Decimal Odds

While American odds are focused on how the wager pays out relative to a $100 wager, decimal odds describe your total payout related to every $1 wagered. If a wager has 2.50 odds and you bet $200, you will get a $250 payout if you win (i.e., $100 x 2.50 = $250).

This format is definitely the most popular odds format in the world. It’s the dominant format at pretty much every sportsbook not based in the US or the UK. You will even see it used here in Canada and listed as the default Canadian method in betting guides.

In my opinion though, the American method is still more popular, but there are definitely some Canadians and sportsbooks who prefer the decimal format.

Understanding Fractional Odds

As you can probably guess from the name, fractional odds are fractions. The numerator (the number above the line) represents how much money you will win for when you place a bet equal to the denominator (number under the line).

Here are some fractional odds examples:

• 5/1 pays out a $5 profit for every $1 bet ($6 total payout for every $1 wagered)
• 3/2 pays out a $3 profit for every $2 bet ($5 total payout for every $2 wagered)
• 10/1 pays out a $10 profit for every $1 bet ($11 total payout for every $1 wagered)

The benefit of this method is that it’s super simple to calculate profits relative to your stake. Despite this simplicity, fractional odds aren’t really used outside the UK. You probably won’t ever see fractional odds in Canada unless you are betting on horse racing.

Betting odds represent the chances of a particular outcome occurring. Alternatively, you can say that the odds represent the implied probability of an event occurring.

You can go even further and use the odds to calculate the implied probability as a simple percentage chance out of 100%. Here’s how to do that for each type of betting odds format.

American

Calculating implied probability from American odds depends on whether the odds are positive or negative:

• With positive odds,  Implied Probability = (100 / (Positive Odds + 100)) × 100
• With negative odds,  Implied Probability = (Negative Odds / (Negative Odds + 100)) × 100

Fractional

Fractional odds are much more straightforward than American and decimal odds for calculating implied probability. All you need to do is divide the denominator by the denominator + numerator. For example, for 3/1 odds, just calculate 1/(3+1) to discover that 3/1 odds equals a 25% implied probability.

Decimal

For decimal odds, calculating implied probability is as simple as dividing 1 by the odds times and multiplying the quotient by 100. So, for 4.00 odds, you would solve (1/4.00)*100 to get a 25% implied probability, the same as 3/1 in fractional odds and +300 in American odds.

The most important thing betting odds tell you is how much money you stand to win from a wager. Actually calculating your winnings, though, can be difficult. The process for doing so is also different for each odds format. Let’s break down each of them one by one below.

American

The first thing you need to notice when calculating winnings from American odds is whether the odds are positive or negative.

Positive odds tell you how much money you will win from a $100 wager. E.g., A $100 wager on a bet with +300 odds will pay out $400, your initial $100 plus $300 in profit.

Negative odds represent how much money you have to wager to win $100. If a bet has -300 odds, you need to wager $300 to win $100 in profit on top of your initial $300.

Fractional

Fractional odds directly represent profit related to stake. The first number tells you how much you will win for betting the second number. For example, 3/1 odds tells you that you will get back $3 in profit for every $1 wagered. If you wager $100, you make $300 and get back a total payout of $400.

Decimal

Compared to American and fractional odds, decimal odds are very straightforward. The odds represent total payout per $1 wagered. To calculate your profit, just multiply the odds times your bet amount, then subtract your bet. So, if you bet $100 on a wager with 4.00 odds, you’ll get $400 back. When you subtract $100, you’ll see that it’s $300 in profit.

Earlier I said that betting odds represent the probability of a particular outcome occurring (i.e., how likely you are to win a wager). That’s not exactly true.

Betting odds actually represent the likelihood of an event occurring plus the sportsbook’s guaranteed profits that are baked into every bet. The difference between these things is the difference between the true odds and implied odds.

True odds are the odds based on the actual likelihood of an event occurring. Implied odds are what the sportsbook actually offers so that they can make a profit. 

Over/under wagers are a great example of this. Standard over/under lines represent that there is a 50% chance of the combined score being over the line (e.g., over 120.5 points) and a 50% chance of the score being under the line. In other words, each outcome has true odds of 50%. The implied odds, however, represent just a 45% chance because of the vig, which I’ll break down next.

The vig—also called the vigorish or juice—is basically the house edge. It’s baked into every bet as a sort of commission or fee that sportsbooks charge in exchange for their services. You can’t avoid the vig in sports betting. Most sportsbooks have a 3-6% vig for each bet, depending on the exact market.

-110 odds on wagers that have a theoretical 50% chance is the classic example of the vig. You have to bet $110 to win $100 back. That extra $10 represents 5%. In other words, a $5 fee for both outcomes.

If the vig is the commission a sportsbook takes on individual bets, you should think about the hold as the sportsbook’s overall profit margin across all bets. It’s not a major distinction, but it’s crucial that you understand the difference because it will help you better understand betting odds, especially for multi-way markets.

A multi-way market is any sports betting market with more than two possible outcomes. Futures bets (e.g., who will win the Super Bowl) and parlays are classic examples of multi-way markets.

Unlike simple binary betting markets with just two outcomes where the market is more transparent, multi-way markets can hide the large house edge taken by the bookmaker. This house edge is the hold. Like with the vig, the hold represents how much over 100% the implied probabilities are.

For example, if you add up the implied probabilities of all possible options on a futures betting market and it results in a 115% implied probability, the hold is 15%.

One of the two things betting odds represent is how likely an outcome is to occur. For this reason, it’s important to understand the betting markets and what outcomes they actually represent.

Moneyline bets, for example, are simple wagers on outright winners. When you place a moneyline bet, you are betting on the outcome that the team you bet on will win. Odds reflect the probability you will be right and how much money you will win if you are right. For example, if you bet $100 on the Toronto Maple Leafs moneyline at +135, the implied probability they will win is 42.55% and you would get $135 if the Leafs win.

Spreads and totals bets, on the other hand, are wagers on the margin of victory and the total amount of points/runs/goals/etc. in a game. Sportsbooks pick a spread and over/under line for these markets so that both outcomes have the same odds. Say that the Chiefs are -5.5-point favourites over the Bills, both Chiefs -5.5 and Bills +5.5 would have -110 odds, which represents that you need to bet $110 to win $100 back. The same would be the case for the over/under, where both the basic over and under wagers would have -110 odds.

Parlays and teasers are sort of the other extreme. These wagers combine multiple bets into one, which results in higher odds and increased risk.

If you’ve read this far, you may think that sports betting odds are fairly straightforward, but they actually can vary significantly depending on the sport. A sports’s scoring system, the amount of parity between teams, and even the popularity of a sport can all affect the betting odds.

For example, UFC fights typically have more volatile odds because outcomes are binary. One fighter wins, while the other loses, so every bet for one fighter has a direct impact on the other’s odds. UFC bettors are also different from other sports bettors since most of them don’t get their wagers in until a few days before the fight or even the day of. This can lead to wild swings in betting odds and lines in the literal hours before a fight.

Leagues like the MLB and NHL, on the other hand, usually have more stable odds since there are more stats available and thus more predictable outcomes. Both sports are also relatively low-scoring with parity across the leagues, so you’re rarely ever going to see one team as an absolutely massive favourite compared to another.

Understanding these sport-specific dynamics and how they affect the betting odds can help you take your sports betting game to the next level.

Once you start betting on sports, one of the first things you notice is that odds can change quite a bit. A team can be the favourite, then, literally minutes later, they can be the underdog. It’s usually not that drastic, but it can happen.

Odds typically change because of two things: player availability and betting volume. Say the Lakers are playing the Clippers. If Lebron James or Luka Doncic gets hurt and can’t play, the Lakers odds of winning are going to change. Alternatively, if a lot of bettors wager on the Lakers to win, the odds will shift to better reflect where the market is going. If the Lakers are already -110 favourites, then a bunch of bets on them come in, the odds could shift to -130.

Now that you know why odds change, let’s go a step further and talk about Closing Line Value (CLV). CLV is the difference between the odds you wagered on and what the odds are when the market closes. Using the example from earlier, say you wagered on the Lakers to win at -110 odds, but the same wager was listed at -130 at tip-off. This is a good CLV, because your bet is a more valuable one than the closing odds.