How Do Sports Betting Odds Work?

If you’ve signed up for an online sportsbook and felt inundated with information, you aren’t alone. To the unfamiliar eye, sports betting odds can look extremely complicated, as a lot is being presented when you log onto a sportsbook site or mobile betting app.

We’re here to explain to you exactly what all of these numbers mean, how they’re calculated, how they relate to different sporting events, and most importantly, how you can use them to find value.

By the time you’re done with this article, terms like “implied probability” and “negative odds,” which may seem like a foreign language now, will feel much more familiar and meaningful. Hopefully, you’ll feel better-equipped to read betting odds and start playing, so without further ado, let’s start discussing what sports betting odds are and where they come from.

What are Sports Betting Odds?

Sports betting odds, in the simplest terms, are reflections of the probability of a certain event occurring. As a result, they also determine how much a bettor will earn from a winning bet on those odds- lower implied probability, higher potential payout.

Every sportsbook has its own methodology for creating the odds it offers to customers. That being said, matching odds to probability is just the beginning of how the lines are set. Opening lines for an event are usually based almost entirely on probability, but once they’re out on the market, the balance of placed bets can make the odds change as well.

For example, if a team was initially listed as a major underdog, and 70% of the money pours in on their side of the moneyline and/or spread, the sportsbook will change the odds to make things more even, so as to not open themselves up to as much risk on that side of the action.

Lastly, there’s the “vig” or “house edge,” which helps the sportsbook stay ahead of the public. This is a term for the difference between the total implied probability of all possible outcomes and 100%. Since the vig will always be positive, meaning that each outcome is listed as slightly likelier than it really should be, this forces bettors to play slightly shorter lines than they otherwise would. This isn’t always a huge deal to the individual player, but to a sportsbook taking millions of bets, it really adds up.

Odds are the heart of sports betting; they’re how sportsbooks are able to make money, and how bettors play and find value. Understanding how they work will help you know which wagers are worthwhile, and perhaps just as importantly, when and where to put your money down.

Betting Lines Explained

The line is the expression of odds. For instance, given odds of 50%, you’ll see a line of +100, for 60%, -150, and for 66.67%, -200. Lines for positive odds, such as +100 or +200, imply probability of 50% or less. They’re easier to understand given how easy they are to convert to fractional odds; +200 is the same as 2/1, meaning a projected two failures to each success, for probability of 33.3%.

When faced with these types of lines, your potential profit will be the same as your stake or more. For a +100 line, your profit would be the same as your stake if you win. For +200, your profit will be twice your stake.

Lines reflecting negative odds are more common, as you’ll usually see -110 on evenly-priced outcomes due to the vig. The fractional odds for these lines are a bit harder to reach mentally, but using the Action Network Betting Odds Calculator, you can reach them fairly easily.

Negative lines require you to bet more than you’d like to profit. For that common line of -110, you’d need to wager $110 to profit $100. For a heavily-favored line of -200, you’d need to bet $200 to win a profit of $100.

A points spread, a projection of how many points the favored team will win by, can also be described as a line. Most often, a spread will have -110 odds on both sides, or something very similar. Spreads are often an indirect reflection of the probability for each side to win, but if the bets come in differently on the spread as compared to the moneyline, the two lines will move differently.

Sometimes, promo codes can be used that boost your payouts if you win or help push the odds in your favor.

How are Betting Lines & Odds Created?

Sportsbooks or bookmakers generally have a major internal team devoted entirely to creating odds and lines. In today’s day and age, there are seemingly infinite algorithms and statistical predictive models that can help them keep an edge over the public, and produce odds that can prove to be shockingly accurate in many cases.

These algorithms also help sportsbooks stay appropriately priced after lines open. As the public begins to bet on a line, the numbers often need to shift as the money doesn’t come in evenly. Automated systems can help sportsbooks monitor the amounts of money placed on each line and keep moving them to stay efficient.

The big players in the market, like DraftKings, FanDuel, bet365, BetMGM and Caesars to name a few, all have their own specific methodology for setting odds, but you can be sure that each one has a large team running numbers to ensure highly efficient lines, in terms of opening numbers and beyond.

Role of Bookmakers

Bookmakers are a bigger part of the industry than ever now that online betting is so widely legal in the United States. This term, describing a person or entity that creates odds and accepts wagers on sporting events, is more or less synonymous with sportsbooks nowadays, with widespread legal betting.

Alternately, rather than the entity itself, a bookmaker could be an individual working within a sportsbook operator, with that term serving as their job description. This would be one of the people who is responsible for generating odds, so in today’s industry, it’s likely someone with a strong statistics or programming background.

Speaking of responsible, check out our guide on responsible gambling.

Las Vegas Odds

“Las Vegas odds” are something less of a monolith than they used to be before the advent of legal online sports betting, but they’re still relevant. Oftentimes, the odds offered by the big in-person casinos and shops will be a bit different than what you’ll find from online sportsbooks, due in part to the fact that the limits are so much higher in Vegas. For this reason, some of the biggst bettors still reside in or near Las Vegas and solely take advantage of these odds.

Best Ways to Read Odds

Since the underlying probability of betting lines will be the same no matter how odds are expressed, they can be presented in any one of a few different formats. Let’s talk about some of the different common terms and formats you’ll need to know in order to read moneyline odds, spreads, and anything else on the online sportsbook.

Plus & Minus

In general, plus-odds will be attributed to something with 50% or worse odds to happen, while minus-odds will be attached to a favored outcome, with better than 50% odds. In terms of the line, plus-odds mean that if you win, you’ll earn a greater profit than the amount of your stake, while minus-odds mean the opposite, that your profit will be smaller than your stake.

In terms of spreads, a positive number, like +7.5, means that a team is an underdog by that margin, while negative numbers like -7.5 mean that the team is favored by that margin.

American Odds

American odds are what you’ll usually see at US sportsbooks. With markets like moneylines and futures, the favorite will be in minus-odds while the underdog will be in plus-odds, such as -140 for the favorite and +120 for the underdog, but for spreads and totals, you’ll usually see -110 on both sides due to the vig.

Decimal Odds

Unlike American or fractional odds, decimal odds are always a positive number, and they’re always greater than 1. Decimal odds represent the potential winnings for a $1 bet, including the stake. So, for decimal odds of 1.5, you’d receive $1.5 from a $1 bet, the return of your $1 stake plus a 50 cent profit.

This simple way of presenting odds isn’t common on American sportsbooks, and it doesn’t intuitively and quickly translate to implied win probability, but it does make calculating winnings quite simple.

Fractional Odds

Fractional odds are fairly similar to American odds, as 2/1 fractional odds are the same as +200 American odds. Conversely, -110 odds are 10/11 fractional odds, so the conversion is a bit different.

Essentially, the numerator in fractional odds for represents the number of probable failures while the denominator is successes. This ratio provides players with the implied probability of both outcomes. This means that with lines for which the numerator is greater than the denominator are less likely than 50% to happen, while the opposite is true for lines for which the denominator is greater than the numerator.

Tips for Calculating Odds Payouts

Now that we know how American odds work, the kind you’ll see offerd by most sportsbooks, you should be able to calculate odds payouts.

When you see a minus sign under this system, you’ll need to risk more than you want to win. For instance, -150 odds require a wager of $150 to profit $100. When there’s a plus sign, you can wager less than you hope to win. With a line of +200, that same $100 stake would net a profit of $200, although a bet with these odds is going to be harder to win.

Do Odds Differ Based on Sports?

With most US sportsbooks, the odds system used to express your payouts will usually be the same regardless of market, but the odds themselves can differ slightly. Let’s talk about what you can expect based on the sports you’d like to bet on, namely in terms of the most major American sports.

Football Odds

Football is possibly the biggest sports betting market in the United States, so there are plenty of different ways to play. Since football games often have significant favorites, due to the low variance caused by the importance of each game in such a short season, spreads betting is a big part of the sport.

The most unique part of the odds is how long they exist before a game; due to the week-by-week nature of football, rather than something more daily like baseball or basketball, the odds release several days before the corresponding game, so they have plenty of time to move.

For instance, a team could be favored by 7.5 when the odds open, but if 80% of spread bets on their game are on their side of the spread, that number could move down to a flat 7 or even 6.5 or lower by the time the game kicks off. Odds can also change based on big news, like good or bad injury news regarding a starting quarterback.

Basketball Odds

Basketball odds often are not available until very close to game time, due to the prevalence of players sitting out in NBA games, and the fact that this information is not usually available very long in advance. That being said, if odds do come out before big news releases, you can find some value.

Let’s take a look at an example; if the Philadelphia 76ers are favored by 11.5 points before news releases that MVP Joel Embiid is going to sit out, a savvy bettor could potentially bet on the other side of that line before the sportsbook has a chance to move it.

Baseball Odds

Given the high variance for each MLB regular season game, since there are 162 of them, you will usually find fairly conservative odds. Moneylines are rarely shorter than -250 or so, and runlines, baseball’s version of a spread, is usually set at 1.5 or 2.5.

One popular way to approach baseball is with first five inning lines, so that you can bet on the outcome just while the starting pitchers are expected to be throwing. This is often viewed as the most predictable portion of the game, as bullpen performances can have some pretty high variance.

For instance, you might want to back the Yankees’ first five inning line if Gerrit Cole is throwing, since it’s much easier to trust him than the team’s bullpen. These odds are often more conservative for favorites than the full-game line, even though many bettors consider them to be more reliable wagers.

Hockey Odds

Hockey’s version of a point spread is called the “puckline,” and can be a great way to bet on underdogs in a sport that is so often characterized by close games. A puckline parlay can be a great way to cash in on the success of a string of underdogs, and is a fun way to play with plenty of games going on most days during the regular season.

Why Sports Betting Odds Change

There are two main things that can impact sports betting odds; news and money. The first of these categories is very broad, as news can be anything from trades and injuries to unexpected weather and in the case of live betting or futures, actual game events. Any one of these things can impact the probability of different outcomes, and will thus change the odds and lines available to the betting public.

The other thing that will often swing odds is simply money movement. If a sportsbook sets a line and 80% of the money is pouring in on one side, they will likely adjust to make the other side more enticing to even things out and decrease their risk level.

Sports Betting Odds FAQs

We hope you’ve already learned plenty about sports betting odds from the above sections, but if you still have a few more questions, read on for our answers to some of the most frequently asked questions on the topic.

How old do I have to be to place sports bets?

In just about every US State with online sports betting, you must be at least 21 years old to place bets, but always check the specific regulations of both your state and the sportsbook you’re attempting to play with.

What are the best sportsbooks in the United States?

There are plenty of great online sportsbooks available in the United States, each of which offers its own pros and cons and will fit each bettor’s needs differently, but our favorites include Fanatics, BetMGM, Caesars, ESPN BET and FanDuel.

What’s better, sports betting online or in-person?

Sports betting in-person and online both have pros and cons; in-person betting provides players with a unique, immersive experience, while online bettors have the edge in terms of breadth of options and convenience.

Who is responsible for creating sports betting odds?

Every sportsbook has its own methodology for creating odds, which will then constantly move based on probability and movement of money within the market.

Is sports betting rigged?

Sportsbooks and leagues work to achieve the highest level of integrity and ensure that wagers and competitions are absolutely not rigged.