How betting odds work: decimal odds and implied probability
Quick answer: Odds show how much a bet pays and the implied chance of an outcome. In decimal odds, your return = stake × odds, and the implied probability =...
Quick answer: Odds show how much a bet pays and the implied chance of an outcome. In decimal odds, your return = stake × odds, and the implied probability = 1 ÷ odds. Bookmakers add a margin, so the implied probabilities add up to more than 100%.
Decimal odds and implied probability
| Decimal odds | Implied probability | €10 returns |
|---|---|---|
| 1.50 | 66.7% | €15.00 |
| 2.00 | 50.0% | €20.00 |
| 2.50 | 40.0% | €25.00 |
| 3.00 | 33.3% | €30.00 |
| 5.00 | 20.0% | €50.00 |
| 10.00 | 10.0% | €100.00 |
The bookmaker’s margin
If a fair coin flip were priced fairly it would be 2.00 / 2.00 (50% each). Bookmakers shorten this (e.g. 1.90 / 1.90) so the implied probabilities exceed 100% — that gap is the margin, or ‘overround’, and it is how they profit. Comparing odds and avoiding heavy-margin markets improves long-term value.
Frequently asked questions
- How do I calculate my winnings from decimal odds?
- Multiply your stake by the decimal odds. A €10 bet at 2.50 returns €25 in total (€15 profit plus your €10 stake).
- What is implied probability?
- The chance of an outcome implied by the odds: 1 ÷ decimal odds. Odds of 4.00 imply a 25% chance.
- Why don’t the probabilities add up to 100%?
- Because the bookmaker builds in a margin (overround). The total exceeds 100%, which is the operator’s built-in edge.
- Are higher odds better?
- Higher odds pay more but imply a lower chance of winning. ‘Value’ is when you judge the real chance to be higher than the odds suggest.
Related guides
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