Understanding Betting Odds
Traditionally, the bookmakers have always used fractional odds. These are not especially intuitive and can be quite off-putting if you are not familiar with them. Since the advent of betting exchanges there has been a shift to the use of decimal odds, which are much more intuitive, particularly for beginners. To help you understand it all fully, we are going to look at both types.
What is the difference between fractional and decimal odds?
There is one vital difference between fractional and decimal odds. Decimal odds include your stake, fractional odds do not.
Later on we will look at some of the key benefits of decimals odds, both when calculating multiple bet returns, and when used on the betting exchanges. For now, lets continue to look at the two types in a bit more detail.
Fractions. Everyone hated them at school! So lets keep the lesson simple, starting with an example.
We are going to place a £10 bet on the football. The odds are as follows:
Lets work out how much we would win if we put our £10 bet on each possible outcome. The easiest way to do this is as follows:
England £10 x 11 / 10
Draw £10 x 12 / 5
Wales £10 x 3 / 1
You are multiplying your stake of £10 by the top number, then dividing the answer by the bottom number. Try it with a calculator to make sure you get the same answers! You should get:
Remember that your stake is not included with fractional odds, so these numbers are the profit from the bet. When the bookie pays out, he will add the stake back as well, so the total possible return from each of the bets is as follows:
Now lets look at the same football match with decimal odds.
This time the calculation only requires one step. Again, lets work out how much we would win if we put our £10 bet on each possible outcome:
England £10 x 2.1
Draw £10 x 3.4
Wales £10 x 4
Its a simple multiplication of the stake and the odds. You should get:
Note that we have immediately got the same answer as at the end of the calculation for fractional odds. This is because decimal odds include the stake, so it does not need to be added back on afterwards.
The choice between fractional and decimal odds is one of personal preference, and today the bookmakers will generally give you the option to easily switch between them.
The recommendation for beginners is to work with decimal odds, as these are more intuitive and have further applications, particularly with the betting exchanges.
Converting from fractional to decimal odds
It can sometimes be useful to know how to switch between fractional and decimal odds. Perhaps you have walked past the bookmaker shop and seen a price in the window, even today it will most likely be written in fractional odds!
The calculation is simple. Take the fraction and divide the top number by the bottom number, then add 1. It is important to add 1 on at the end, do not do this first or it will not work. Example:
Fractional odds 12/5.
12/5 = 2.4
2.4 + 1 = 3.4
So the decimal equivalent odds of 12/5 are 3.4.
Lets do a second example:
Fractional odds 9/2
9/2 = 4.5
4.5 + 1 = 5.5
The decimal equivalent of 9/2 is 5.5.
Try a few for yourself, to ensure you have got them right you can go to the odds conversion chart which lists common fractional to decimal odds conversions.