Bookmakers odds: the types and ways to calculate
What are “odds”? In simple terms, they are the chances of something happening. When bookmakers use them they are the ratio to your stake amount that they will pay you if something happens. Different countries use different forms of displaying odds, and it does not hurt to know the differences. So what types of ways to display odds exist, what do they mean and how do you calculate and convert them yourself? Let’s discuss.
It is well known, that modern bookmakers have successfully conducted their activities across multiple countries on almost all continents. It is therefore not surprising that there are several different ways to present odds. There are three main types today: English, European and American. Their similarities and differences, as well as their pros and cons, will be discussed in this article.
Traditional English Odds
It is believed that bookmaking as we know it today, independent companies specializing in the acceptance of bets in “industrial volume” originated in England. Therefore, it is quite logical that this country has given the bookmaking world its own type of odds. English odds remain extremely popular in our time as British companies faithfully honour the traditions of their ancestors.
Almost all modern British bookmakers by default offer English Odds as default. English odds have a fractional recording format, such as 5/1. This quote shows the ratio of net winnings compared to the size of the bet. That is for every £1 you bet you have a net gain (minus the bet amount) of £5.
European odds came to light when the betting business began to gradually move away from the UK to neighbouring France, and then to spread across Western Europe. At first, only British bookmakers functioned but after a certain amount of time, the British began to face worthy competition from French and German gambling establishments.
Most of the new offices found the calculation using the English system to be too difficult. Thus, the European or, as it is now called, the decimal factor was born. At the moment the European system is presented by all bookmakers in the world without exception (though not always by default).
How do you use the odds? If you take the size of your bet and multiply it by the coefficient, you will get the amount that the bookmaker will have to pay in the case of winning the bet. You must remember to subtract 1 to know your profit because 1 is always equal to your stake amount.
Perhaps the most difficult to understand are the American betting odds, although you will of course, only really be seeing these whilst betting in American bookmakers. These use of this odds system is first recorded a few years after the country declared independence. It then quickly took root in local gambling establishments. The main distinguishing feature of the American coefficients is the presence of the “z” or “-“sign in front of the digital indicator. This sign helps you to determine which team is the favourite or not. The status of favourite is signified by the “-“sign. The English way to describe it is “odds on”.
Let’s try and deal with American quotes and calculate the odds with an example. Take the odds of -105 (favourite team). This quote shows that to get a net win of $100, you must bet $105. The equivalent to this factor in the European system is 1.95.
Now let’s look at the example with a positive factor (unfavoured team). Let’s say we want to bet on the coefficient of +110 which means that to make a profit of $110 you need to bet $100. The equivalent to this factor in the European system is 2.1.
Today, only certain bookmakers’ resort to this representation of odds, and they will also always offer English and European coefficients as an alternative.