What is sports betting? How are odds and payouts calculated? How do bookmakers work? Read on to discover everything a beginner needs to know about betting on sports.
What is sports betting?
Sports betting involves staking on the outcome of sporting events. Bettors attempt to predict the result of an event in order to win their bet - and potentially profit.
What are sports betting odds?
Put simply betting odds are representations of probability. For example odds of 2.00 (or 1/1 in fractional odds) imply that an event has a 50% chance of occurring.
A representation of the perceived frequency of an event derived from the underlying probability which enables betting.
Sports betting odds example
Take a look at this example of a fictional matchup between Team A and Team B:
A one unit bet on Team A pays 2.3 units if Team A win the match.
A one unit bet on Team B pays 1.5 units if Team B wins the match.
You may have noticed that the implied probabilities add up to more than 100%. This is due to the bookmaker’s margin, which is explained in more detail below.
Learn to convert odds into probability.
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How to calculate betting payouts: Odds formats
There are three major odds formats that you may frequently see mentioned.
Decimal odds are perhaps the easiest format to use since they demonstrate the return for each unit bet. For example with decimal odds of 3.24 a bettor knows that for every one unit staked they will receive 3.24 units back should the bet be successful.
Fractional odds are slightly more complicated. They show the same information as decimal odds but in a different way. The number on the left of the “/” is the profit returned by betting the number to the right of the “/” in the event the bet is successful. The stake is also returned to the bettor.
Decimal odds of 3.24 would be written in the fractional form as 9/4. In other words to make nine units of profit the bettor must initially wager four units.
- Use Pinnacle's bet calculator to calculate payouts
American odds are popular in some regions and again share the same information as decimal odds in a marginally different way.
When using American odds the payout is relative to a 100-unit base figure. A minus means you need to play that amount to win 100 units whilst a + means you win that amount for every 100 units bet.
The decimal 3.24 would be written as +224 in the American odds format.
Confused about different odds formats? Don’t be. Pinnacle offer a convenient odds converter calculator for bettors to convert odds into their favoured format. Pinnacle customers may also change their default odds preferences.
What are the different types of sports bets?
Spread bets: Otherwise known as straight bets or handicap bets, this is a bet on the outcome of a game after a point penalty or addition for a given team.
Total bets: a bet on the number of points or goals to be scored in the game. Bettors can bet “over” the number if they think more points will be scored or “under” if they think fewer points will be scored.
Money Line bets: a bet on a team to win the match.
Multiple bets: otherwise known as a parlay or accumulator, parlay bets involve combining two or more selections into one bet. All outcomes must be favourable for the bet to win but bettors secure higher odds in the process.
A combination of dependant bets offering proportionately higher returns.
Teaser bets: An alternative kind of multiple involving tweaking the point spreads in the bettors favour in return for lower odds.
Outright bets: a bet on the team or player to win a competition.
Head-to-head bets: A bet on the winner of two competitors in head-to-head competition. This is more common in events with larger fields such as major golf tournaments.
How to place a sports bet
Placing a bet is simple. Bettors can add a selection to their bet slip, choose the amount to bet and the potential winnings will be calculated in the betslip. To build a multiples bet the bettor can simply add more than one selection to the slip.
How do bookmakers make money?
Bookmaking can be complicated but in simple terms bookmakers make their money by acting as the middle man between the two parties interested in placing a bet. The bookmaker’s profit is made by building a margin into the odds.
Using a classic coin toss example the bookmaker sets the line on both heads and tails at 1.91 (implied probability of 52.4%). This provides him with a margin of 4.8%. If both sides of the market are bet equally then he will make this margin on the money wagered.
For a more in depth analysis read how bookmakers work.
What is a value bet?
This bookmaker’s margin is problematic for bettors since it makes it difficult to win, as the bookmaker is taking money from both sides of the market. Because of this bettors must understand the concept of a value bet in order to profit.
An example of a value bet can also be demonstrated with a coin toss. Say the bookmaker offers odds of 2.2 on a heads. This is an implied probability of 45.5% on an event that we know has a 50% chance of occurring. This is value.
For a more detailed article about value betting read what is a value bet?
What is hedging a bet?
Hedging a bet involves guaranteeing a profit from a bet by taking advantage of a change in circumstances causing odds movement in the bettors favour. This can help to reduce variance.
What is arbitrage betting?
Arbitrage (also shortened to “arb”) betting involves betting on both sides of the market at odds that guarantee the bettor a sure win.
Use Pinnacle’s arbitrage betting calculator to find arb opportunities.
Read arbitrage betting explained for deeper insight into arbing.
Why is it important to bet at the best odds?
Betting at inferior odds will reduce your returns. It is important to search for the best price offered on each bet since differences in odds compound over time.
For major soccer markets like the EPL Pinnacle’s margins can be as low as 2% compared to an industry average of 6%. This lower margin ensures that bettors get the most from any value they can find.
What is staking?
Even if a bettor can find value regularly they will quickly learn the importance of a staking strategy. Without proper bankroll management even successful bettors encounter the risk of ruin if stakes are not properly controlled.
Can sports betting be profitable?
There are certainly profitable bettors, including sports betting hedge funds, so it is possible to be a profitable bettor.
However, becoming an advantage bettor is not an easily achievable. That is perhaps part of the appeal. It is challenging to find value in the competitive betting market and doing so is certainly rewarding.
Read: Why is betting so hard?
What is the best sports betting strategy?
The answer to this question is that there isn’t a definitive best approach to betting. If there was a so-called “best sports betting strategy” then any edge it granted would quickly disappear as that information leaked to the market.
What works for some bettors may not work for others. Betting hedge funds have the resources and funds to capitalize on small advantages across a wide range of games. Individual bettors may have more joy specializing in niche sports or leagues where their own knowledge can be leveraged to their advantage.
What is important for any betting strategy is to be aware of the concept of value and to follow an appropriate staking method.
Are betting tips reliable?
It is advisable to be wary of tipsters in most cases, especially those who do not post third party profit/loss records.
After all, if a tipster can really beat the market consistently why would they be willing to share that information instead of using it for their own benefit?
What should bettors know about free bets?
Whilst free bet offers may look appealing, bookmakers do not offer them for charitable reasons. Be aware that free bet offers are usually used to acquire new customers who generally bet at inferior odds out of convenience. If you do this then you leave money on the table.
What should bettors know about free bets?
Common betting mistakes to avoid
Failing to understand value, biases, and poor bookmaker selection are just a few of the mistakes often made by even experienced bettors. Read more about how to avoid the most common betting mistakes.
Do bookmakers limit or ban customers?
It is common practice for bookmakers to limit or ban winning customers. This makes it impossible to be a long-term winner at such companies.
Pinnacle offer a unique winners welcome policy, ensuring that if you can find an edge you will be able to use it to your full advantage without having your account affected.
Which bookmaker offers the best odds?
Pinnacle are independently rated as number one for payouts with the most competitive margins and best value for customers. To ensure you get the most from your betting make sure to bet at the best odds available.