When most people think of “sports betting,” they think about the sports. However, if you want to make money betting on sports, then you need to know the math. You could literally know nothing about sports and become a profitable sports bettor. It’s all about math, beating the vig and finding an “edge.”
Implied Probability and Sports Betting Odds
The first concept that is critical to understand in sports betting is implied probability. Basically, every “odd” has a breakeven win probability (or implied probability). This win probability tells you often you need to win your bet to “breakeven” long-term.
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This may be a little confusing, so let’s go through a few examples. If you’re betting at +100 odds, then you need to win 50% of your wagers to “breakeven.” You’re staking $100 to win $100 in profit. Assuming your bet size is $100, when you win, you win $100. When you lose, you lose $100. Thus, you need to win half of your wagers long-term to breakeven. If you’re winning over 50% of your wagers at +100 odds long-term, then you’re a profitable (e.g. Positive EV) sports bettor. If you’re winning less than 50% of your wagers at +100 odds, then you’re unprofitable.
Now, however, let’s imagine you’re betting at +200 odds. You’re staking $100 to win $200 in profit. In this case, the “implied probability” is only 33.33%, as seen in an odds converter calculator. Since you’re betting $100 to win $200 in profit, you only need to win 1/3 wagers long-term to breakeven. If you’re winning, say, 40% of your wagers at +200 odds, then you’d be highly profitable in the long run, as you are winning at a rate above the implied probability of 33.33%.
Odds to Probability Table
This is a common pitfall for many beginning sports bettor. They’re tempted to bet on teams that are heavy favorites (e.g. -400 moneyline odds) because they are more likely to win. And, yes, that’s true. Teams that are -400 are more likely to win than teams that are +400.
However, when you’re betting on teams that are -400, you need to win 80% of your wagers to just breakeven. Even if you win 77.5% of your bets at -400 odds, you’d be highly unprofitable in the long run, even though you’re “winning” more often than you’re losing.
There are people who bet on golf full-time for a living. They select golfers at +4900 odds that their models have as 5% to win. Even though they’re only winning their wagers 5% of the time, they’re highly profitable over the course of the year, as the implied probability is only 2%.
The next concept that requires sports betting math is “parlay odds.” People often think that parlay odds come out of nowhere, but that’s far from the truth.
Any two leg parlay where both picks are at +100 odds will come out to be +300 odds, as seen in the screenshot of the parlay calculator above.
An example of a two leg parlay where both picks are +100 odds is below. This parlay is on FanDuel. The first leg in the parlay is the New Orleans Saints moneyline at +100 odds. The second leg in the parlay is over six runs in the Rays vs. Guardians game.
So, how do sportsbooks calculate these parlay odds?
It’s relatively simple. The sportsbook first converts the odds to implied probabilities. As we went through previously, +100 odds has an implied probability of 50% (seen in the table above).
Next, the sportsbook multiplies the probabilities together (50% x 50% = 25%). Finally, the sportsbook converts the implied probability of the parlay back into an odd, and this is what is shown to the sports bettor. As seen in the table above, 25% implied probability = +300 American odds.
As a note, if you have questions about any of these concepts, then you can email us at [email protected]. You can also schedule a free tutorial with a sports betting expert.
Remember that the OddsJam Sports Betting Software has a variety of mathematically profitable tools to help you make money off the sportsbooks. The most popular tool we have is the Positive EV Betting Tool. This tool finds bets with a mathematical profit margin over the sportsbook, which is known as “edge” in sports betting.