Learning Center
05.06.2023, 08:22
20.05.2024, 13:02
51
0

Calculating Implied Odds in Sports Betting

Implied probability is an essential concept in betting that refers to the probability of an event occurring as reflected by the odds set by bookmakers. It represents the likelihood of a particular outcome based on the odds offered.

In betting, odds are typically presented in different formats, such as decimal, fractional, or moneyline. Implied probability is derived by converting these odds into a percentage.

To calculate the implied probability, you can use the following formulas based on the odds format:

Decimal Odds:

  • Implied probability = 1 / Decimal odds

For example, if the decimal odds are 2.5, the implied probability would be 1 / 2.5 = 0.4, or 40%.

  • Fractional Odds:

Implied probability = denominator / (denominator + numerator)

For example, if the fractional odds are 3/1, the implied probability would be 1 / (1 + 3) = 0.25 or 25%.

  • Moneyline Odds:

Implied probability = 100 / (absolute value of the moneyline odds + 100)

For example, if the moneyline odds are -200, the implied probability would be 100 / (200 + 100) = 0.333 or 33.3%.

Implied probability is a valuable tool for bettors as it allows them to assess the value of a bet. If the implied probability is lower than your assessment of the likelihood of an event occurring, it may indicate a potentially profitable opportunity. Conversely, if the implied probability is higher than your assessment, it may suggest that the odds are not favourable.

However, it's important to note that bookmakers incorporate a margin, known as the "vig" or "overround," into their odds to ensure a profit. As a result, the sum of the implied probabilities for all possible outcomes will always be greater than 100%. This difference represents the bookmaker's profit margin.

Implied Probability Calculation Example with Betting on Champion League Final

Let's imagine there's a UEFA Champions League final match between Bayern Munich and Manchester United.

We'll create hypothetical betting odds for three possible results: Bayern Munich wins, Manchester United wins, and the match ends in a draw (which would force extra time and possibly penalties).

Let's say these are the decimal odds given by a bookmaker:

  • Bayern Munich to win: 2.20
  • Manchester United to win: 3.40
  • Match to end in a draw: 3.20

We can calculate the implied probability for each outcome using the formula:

Implied probability = 1 / Decimal Odds

So the implied probabilities are:

  • Bayern Munich to win: 1 / 2.20 = 0.455 or 45.5%
  • Manchester United to win: 1 / 3.40 = 0.294 or 29.4%
  • Match to end in a draw: 1 / 3.20 = 0.312 or 31.2%

If you add these probabilities, the total is 1.061, or 106.1%. The excess over 100% (6.1% in this case) is known as the overround or vigorish, representing the bookmaker's profit margin.

It's worth noting that these are theoretical probabilities based on the bookmaker's odds and don't necessarily represent the actual likelihood of each outcome. The real world is unpredictable, and the match's final result could be influenced by many factors not accounted for in these probabilities.

Implied Probability Calculation Example with Betting on Ice Hockey World Championship Final

let's envision a hypothetical scenario with an Ice Hockey World Championship 2022 final match between Canada and Russia.

We will assign hypothetical odds for the three outcomes:

  • Canada to win: 2.30
  • Russia to win: 3.00
  • Match to end in a draw (after regulation time): 4.50

These are decimal odds, and we can calculate the implied probability for each outcome using the formula:

Implied probability = 1 / Decimal Odds

Here's what we get:

  • Canada to win: 1 / 2.30 = 0.435 or 43.5%
  • Russia to win: 1 / 3.00 = 0.333 or 33.3%
  • Match to end in a draw: 1 / 4.50 = 0.222 or 22.2%

Adding these probabilities together gives us 0.990, or 99.0%. In this hypothetical example, there isn't an overround (since the total is less than 100%), which is unrealistic in the real world. In a typical scenario, the total would exceed 100% due to the overround, the bookmaker's profit margin.

Implied Probability Calculation Example with Betting on Tennis Big Slam Final

We'll create hypothetical decimal betting odds for the two possible outcomes: Player A wins or B wins.

There are no draw outcomes in tennis, so we don't need to consider that possibility. Note that because it's a final, the match will continue until there's a winner, even if it goes to a fifth-set tiebreaker or beyond.

Let's say these are the decimal odds given by a bookmaker:

  • Player A to win: 1.75
  • Player B to win: 2.25

We can calculate the implied probability for each outcome using the formula:

Implied probability = 1 / Decimal Odds

So the implied probabilities are:

  • Player A to win: 1 / 1.75 = 0.571 or 57.1%
  • Player B to win: 1 / 2.25 = 0.444 or 44.4%

Adding up these probabilities, the total is 1.015, or 101.5%. The excess over 100% (1.5% in this case) is the bookmaker's overround, also known as vigorish or juice, which is their built-in profit margin.

FAQ

What is implied odds?

Implied odds in sports betting represent the expected return on investment based on the current odds offered by the bookmaker. They consider both the odds and the probability of the outcome occurring.

How are implied odds calculated?

Implied odds are calculated by converting the given odds into a percentage probability and then determining the potential return on investment based on that probability.

Why are implied odds significant in sports betting?

Implied odds help bettors assess the value of a particular bet. By comparing the implied probability to their assessment of the likelihood of the outcome, bettors can determine if a bet offers a positive expected value.

How can bettors use implied odds in their betting strategy?

Bettors can use implied odds to identify value bets. If they believe the likelihood of an outcome is higher than the implied probability based on the odds, it may indicate an opportunity to place a profitable bet.

Can implied odds change?

Yes, implied odds can change based on various factors, including betting market activity, injuries, lineup changes, and other relevant information. As new information becomes available, the implied odds may be adjusted by the bookmaker.

How can bettors improve their understanding of implied odds?

Bettors can improve their understanding of implied odds by studying statistical analysis, following sports news, and analysing historical data. It's also beneficial to compare odds across different bookmakers to identify discrepancies and potential value bets.

Are implied odds consistently accurate predictors of outcomes?

Implied odds are based on probability and can provide a helpful framework for assessing value in sports betting. However, they are not infallible and should be used as a tool in conjunction with thorough analysis and research.

Comments0

Only authorized users can leave comments.
Sign In
No Comments Yet
Be the pioneer! There are no comments so far, your insightful thoughts could lead the way. Share your perspective!
Bookmakers
Bonuses
Wiki
Tips
News