How Are Odds Calculated In Sports
A parlay bet is a single wager that requires two or more outcomes to all win. The parlay calculator allows you to input your stake & odds in American formats to quickly calculate the payout for. Few bettors use fractional odds for betting sports (other than horse racing), because the conversions to understand return are difficult. To calculate winnings on fractional odds, multiply your bet by the top number (numerator), then divide the result by the bottom (denominator). So a $10 bet at 5/2 odds is (10. 5) / 2, which equals $25. Answered 1 year ago. The two basic methods for American sports betting odds are the point spread and or moneyline. Football and basketball odds use a point spread method because there are enough points scored in these two sports. Baseball, hockey and soccer use a moneyline because there are very few points scored and there needs to be an effective method of determining the odds when a point spread. The latest news, videos, scores and more on the biggest sports, including NFL, NBA, MLB, NCAA, NASCAR and more with Sporting News.
The Expected Value of a bet shows us how much we can expect to win (on average) per bet, and as such is the most valuable calculation a bettor can make when comparing bookmakers odds. How can you calculate Expected Value in sports betting in order to predict your winnings? Read on to find out.
Expected Value
The amount a player can expect to win or lose if they were to place a bet on the same odds many times over, calculated through a simple equation multiplying your probability of winning with the amount you could win per bet, and subtracting the probability of losing multiplied by the amount lost per bet.
A simple example of Expected Value (EV) put into practice - if you were to bet $10 on heads in a coin toss, and you were to receive $11 every time you got it right, the EV would be 0.5.
This means that if you were to make the same bet on heads over and over again, you can expect to win an average of $0.50 for each bet of $10.
How to Calculate Expected Value
The formula for calculating Expected Value is relatively easy – simply multiply your probability of winning with the amount you could win per bet, and subtract the probability of losing multiplied by the amount lost per bet:
(Probability of Winning) x (Amount Won per Bet) – (Probability of Losing) x (Amount Lost per Bet)
To calculate the expected value for sports betting, you can fill in the above formula with decimals odds with a few calculations:
- Find the decimal odds for each outcome (win, lose, draw)
- Calculate the potential winnings for each outcome by multiplying your stake by the decimal, and then subtract the stake.
- Divide 1 by the odds of an outcome to calculate the probability of that outcome
- Substitute this information into the above formula.
For example, when Manchester United (1.263) play Wigan (13.500), with a draw at 6.500, a bet of $10 on Wigan to win would provide potential winnings of $125, with the probability of that happening at 0.074 or 7.4%.
How Are Odds Calculated In Sports Management
The probability of this outcome not occurring is the sum of Man Utd and a draw, or 0.792 + 0.154 = 0.946. The amount lost per bet is the initial wager – $10. Therefore the complete formula looks like:
The EV is negative for this bet, suggesting that you will lose an average of $0.20 for every $10 staked.
How Does Expected Value for Sports Betting Help?
Remember, a negative EV doesn’t mean you’re going to lose money. Unlike a coin toss, sports betting odds are subjective, and therefore if you outsmart the bookmaker, you’re likely to make money.
If you calculate your own probability for a match that differs from the implied probability of the odds, you could see where to find a positive EV, and therefore the best chance to win.
For example, the odds imply that Wigan only have a 7.4% chance of winning. If you calculate (maybe using a system like Poisson distribution) that Wigan has a 10% chance of winning, the EV for betting on a Wigan win jumps to $3.262.
It’s also a perfect measure for comparing odds in arbitrage betting, which is discussed in our article What is arbitrage betting.
Calculating the EV of bets gives bettors more information about the value of their bookmaker. While low-margin bookmakers like Pinnacle have EVs of around -$0.20, it’s not uncommon for typical bookmakers to have an EV of -$1.00 – for every $10 stake you would be likely to lose a $1 .
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How Are Odds Calculated In Sports Betting
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