An introduction to betting odds
Betting odds might seem confusing to begin with. But once you’ve read this article, you’ll understand how they work and how to calculate your winnings before placing your bet. It’s much simpler than you might think. We think decimal odds are the easiest to understand to begin with, they’re also the most popular on CloudBet so we’ll use these for our example.
Okay, to start off here is a quick primer on odds. Say Alexander Zverev is playing Roger Federer at Wimbledon and their head-to-head stats looked like this:
Alexander Zverev - 4
Roger Federer - 6
So they’ve played 10 times (6+4); from this we can make the following statements:
Roger Federer won 6/10 – from this we can say on average his chance of beating Alexander Zverev is 0.6.
Zverev has 4/10 - from this we can say on average his chance of beating Federer is 0.4.
0.4 + 0.6 = 1.0 – in terms of chance/probability 1 = certainty.
One of the two players will definitely win, which seems a bit obvious but is actually important to understand.
Betting odds are simply answering the question – how often will that event happen.
Moving to common odds formats
Now this should be all be very intuitive, but things get a little trickier when you move to betting odds, the dominant form being Decimals.
Simply do the sum 1/p where p is the chance (as calculated above).
So for Federer this is 1/0.6 = Decimal odds of 1.66
For Zverev 1/0.4 = Decimal odds 2.5
These are called Decimal odds and you will see them across CloudBet.
Working out your profit
Once you get your head around what odds mean and how to calculate them you’ll want to understand how to calculate what you get back for a bet.
Simply multiply your stake by the Decimals odds but remember this includes your original stake.
0.1 bitcoin on Zverev at 2.50 returns 0.25 bitcoin (2.50 X 0.1) which is made up of 0.1 stake and 0.15 profit.
Working out the margin for the market
In a truly fair market, each possibility would add to certainty. However, a bookmaker needs to make money in order to function. They’re providing a service. So all odds are priced to contain a margin, a way that ensures over the course of the market a certain amount of money is made. At CloudBet we price our markets with one of the lowest margins of any bitcoin sportsbook. Don’t believe us? Here’s how to work out the margin of any bookmaker’s odds. We’ll use our tennis match as an example.
If we see these decimal odds -
Alexander Zverev - 2.3
Roger Federer - 1.4
We use this formula to calculate the margin -
(1/Decimal Odds Option A)*100 + (1/Decimal Odds Option B)*100
So with our example:
(1/2.3)*100 + (1/1.4)*100 = 43% + 71% = 114%
So with these odds we can see a bookmaker’s margin is 14%, i.e. 14% over 100%. If the market has more than a two way result, simply add the other options in the same way.
Now you can work out the odds and returns from your bet, see the latest markets available on Cloudbet.