Quick answer
- Implied probability = 1 ÷ decimal odds.
- Odds of 2.00 imply 50%. Odds of 4.00 imply 25%.
- Add up the implied probabilities of every outcome to find the sportsbook's margin.
The formula
Implied probability = 1 ÷ decimal odds
| Decimal odds | Implied probability |
|---|---|
| 1.50 | 66.7% |
| 2.00 | 50.0% |
| 2.50 | 40.0% |
| 4.00 | 25.0% |
| 10.00 | 10.0% |
Using American odds
US sportsbooks show American (moneyline) odds by default. Convert them to implied probability like this:
- Plus odds (underdog): 100 ÷ (odds + 100). So +150 is 100 ÷ 250 = 40%.
- Minus odds (favorite): odds ÷ (odds + 100), ignoring the minus sign. So -200 is 200 ÷ 300 = 66.7%.
| American | Decimal | Implied probability |
|---|---|---|
| -200 | 1.50 | 66.7% |
| +100 | 2.00 | 50.0% |
| +150 | 2.50 | 40.0% |
| +300 | 4.00 | 25.0% |
| +900 | 10.00 | 10.0% |
Finding the sportsbook’s margin
Take a football match priced like this:
| Outcome | Odds | Implied probability |
|---|---|---|
| Home win | 2.10 | 47.6% |
| Draw | 3.40 | 29.4% |
| Away win | 3.60 | 27.8% |
| Total | 104.8% |
The real chances of the three outcomes must add up to 100%. The extra 4.8% is the sportsbook’s margin, often called the vig or overround.
Spotting value
A bet has value when you believe the true chance is higher than the implied probability. If you think a team wins 55% of the time and the odds are 2.00 (50%), the price is in your favor. If you think it is 45%, it is not.
FAQ
What are decimal odds?
The total amount returned per $1 staked, including your stake. Odds of 3.00 return $3 for a $1 winning bet.
How do I convert American odds to decimal?
For plus odds, divide by 100 and add 1, so +150 becomes 2.50. For minus odds, divide 100 by the number and add 1, so -200 becomes 1.50.
How do I convert fractional odds?
Divide the first number by the second and add 1. So 5/2 becomes 2.5 + 1 = 3.50 in decimal.