Welcome to the series of articles on betting theory, where Alacrity.gg and Upcomer have teamed up to bring you all of the knowledge needed to bet on esports like a pro.
In this series, we’ll cover topics such as where you can place bets, what odds even mean, how oddsmakers set their odds, when you should or shouldn’t bet and how to approach esports betting quantitatively. Keep in mind, though, that betting has its own set of complicated jargon and concepts, so use our glossary as a handy reference.
Types of odds
When we talk about odds, we’re referring to one of two things. We sometimes use it as a shorthand for the probability of an event (i.e. “this team has good odds of winning”). But, more often, we’re referring to the odds that a bookmaker offers on a betting site. This is also known as the bookmaker’s line and is related to the payout and profit that a bet provides.
When you see statements such as “bet on Evil Geniuses at -146” or “take DWG KIA at 2.81,” these are odds. They come in three standard variations: American (e.g. +238, -146), European (also known as Decimal, e.g. 1.47, 2.81) and Fractional (e.g. 4-to-1, 1/2.5).
What exactly do all of these numbers mean? Read on to find out how odds are defined, how to convert between them and how they relate to the payouts you can receive.
Payouts and profits
First, it’s helpful to define the difference between a payout and a profit. When you win a bet, you will receive, in return, both your initial bet and your winnings.
Your payout is the total amount of money paid out to you. If you place a $100 bet and win, a betting site will credit you with, for example, $300. This is your payout but it includes returning your initial stake.
Your profit is how much money you are up, in net. In the above example, you started with $100 and now have $300, so your profit is $200. We can treat the $300 payout as a combination of returning your initial stake ($100) and your profit ($200).
American odds are listed in the form of a + or – sign followed by a number with a value of at least 100.
A positive (+) number indicates the amount of profit you would receive from winning a $100 bet. For example, if you place $100 at +241, you would receive $241 in profit, as well as your initial $100 back for a total payout of $341.
A negative (-) number indicates the amount of money you would have to wager in order to receive $100 in profit on a winning bet. For example, odds of -140 would mean that if you bet $140 and win, you will receive $100 in profit (and $240 in total payout). Alternatively, if you bet $100, you would receive $71.43 in profit (100/140 = $71.43).
An even money bet is at +100 odds. Winning that bet exactly doubles your money, which in turn implies that the probability of that outcome occurring is exactly 50% (we’ll explore how to convert odds into probabilities in a future article).
+100 is equivalent to -100, but standard convention is to only use negative numbers if the profit is less than your initial stake.
Some simple formulas to keep in mind, dealing with American odds:
payout = bet*((odds/100)+1)
profit = bet*(odds/100)
payout = bet*((100/abs(odds))+1)
profit = bet*(100/abs(odds))
Where abs() takes the absolute value of the odds.
European/ decimal odds
European odds are listed in the form of a single number, with value at least 1, usually written out to two decimal places.
This number represents your total payout as a multiplier on your bet, including your initial stake. For example, winning a $100 bet at 3.41 would give you a payout of $341, for a profit of $241.
An even money bet is at 2.00 odds.
Formulas for European odds:
payout = bet*odds
profit = bet*(odds-1)
Fractional odds are listed as a fraction or ratio, either written out (5-to-1) or numerically (5/1).
The numerator is the profit that you would win for a bet equal to the denominator. For example, a 5-to-1 bet would give $500 in profit for a $100 bet (for a $600 payout), while a 1-to-4 bet would pay out $100 in profit for a $400 bet (for a $500 payout).
It is standard convention to have either the numerator or denominator equal to 1, to simplify math. Any other fraction can be reduced down to this. For example, 7-to-4 is equivalent to 1.75-to-1.
An even money bet is at 1-to-1 odds.
Formulas for fractional odds:
payout = bet*([numerator/denominator]+1)
profit = bet*(numerator/denominator)
Since all of these types of odds are just different forms of listing the same information (payout and profit), you can easily convert from one to another.
For fractional odds, we offer the conversion to a single number which defines the ratio:
4 is equivalent to 4-to-1 or 4/1
0.25 is equivalent to 1-to-4 or 1/4
American -> European
if positive: European Odds = (American Odds +100)/100
if negative: European Odds = 1+(100/abs(American Odds))
European -> American
if >=2: American Odds =(+)((European Odds-1)*100)
if <2: American Odds = (-)(100/(European Odds-1))
American -> Fractional
if positive: Fractional Odds = American Odds/100
if negative: Fractional Odds = 100/abs(American Odds)
Fractional -> American
if >=1: American Odds = (+)(Fractional Odds*100)
if <1: American Odds = (-)(100/Fractional Odds)
European -> Fractional
Fractional Odds = European Odds-1
Fractional -> European
European Odds = Fractional Odds+1