How do betting odds work?
Betting Odds Explained: How to read odds, calculate your winnings, and spot good betting odds. Everything for beginners, explained clearly and with examples.
approx. 4 min.
How do betting odds work?
Do you want to bet on sports but keep coming across numbers like 1.85 or 3.40? Those are the betting odds. They’re the most important number in any sports bet. They show how much you’ll win if your bet pays off. And they indicate how likely the bookmaker thinks a particular outcome is. If you can interpret these numbers, you’ll understand your bet and be better able to assess the risk.
A number with two purposes: What are betting odds?
Odds are a factor. Your stake is multiplied by this factor if you win. The result is your payout.
The odds serve two purposes. First, they determine your payout: the higher the odds, the more you’ll receive if your bet wins. Second, they reflect the provider’s assessment. Low odds indicate a likely outcome, while high odds indicate an unlikely one.
The odds are set as soon as you place your bet. They do not change after that for that bet. This applies to fixed odds, as used by traditional bookmakers.
Betting Odds Explained: How to Calculate Your Winnings
Decimal odds are common in Germany. The calculation is simple:
- Payout = Bet × Odds
- Net profit = Payout − Bet
- Payout: 10 € × 2.50 = 25 €
- Net profit: 25 € − 10 € = 15 €
With this calculation, you'll know exactly in advance what you'll receive if you win, and you can plan your first sports bet strategically.
Payout or Net Profit? The Difference
The payout is the total amount you receive if you win. Your bet is already included in that amount. The net winnings are simply the amount on top of that. They show how much you actually won.
In the example above, the payout is 25 €. Of that amount, 10 € is your own stake. Your net profit is therefore 15 €.
| Use | Quote | Payment | Net Income |
| 5 € | 2.00 | 10 € | 5 € |
| 10 € | 2.50 | 25 € | 15 € |
| 20 € | 1.80 | 36 € | 16 € |
This distinction is important so that you can accurately estimate your winnings. With a €20 bet and odds of 1.80, €36 might sound like a lot. However, your actual winnings are only €16.
There's a simple formula for this: Net profit = Stake × (Odds − 1). With odds of 2.00, the net profit is equal to your stake.
Three Notations, One Principle: Decimal, Fractional, and U.S. Quotients
Odds come in various formats. You'll see them mainly on international websites. The numbers look different, but they mean the same thing.
| Format | Where is this customary? | Here's how to read it | Example |
| Decimal odds | Germany, Europe | Bet × Odds = Payout | 2.50 |
| Failure rate | United Kingdom | The ratio shows net profit relative to the stake | 3/2 |
| U.S. Odds (Moneyline) | United States | Plus: Profit on a $100 bet. Minus: Bet required to win $100 | +150 |
All three examples in the table are worth the same amount. 2.50 is the same as 3/2 and the same as +150.
Here's how to convert to decimal fractions:
- Fraction: Calculate the fraction and add 1. 3/2 = 1.5. Then 1.5 + 1 = 2.50.
- US odds with a plus sign: Divide the number by 100 and add 1. +150 equals 1.5 + 1 = 2.50.
- Negative U.S. odds: Divide 100 by the number and add 1. −200 equals 0.5 + 1 = 1.50.
Understanding Betting Odds: What the Number Reveals About the Probability
Any odds can be converted into a probability. The formula is:
Probability in percent = 100 ÷ odds
This is called the implied probability. It shows how likely an outcome is, based on the odds.
| Quote | Invoice | Probability Based on Odds |
| 1.25 | 100 ÷ 1.25 | 80% |
| 1.50 | 100 ÷ 1.50 | about 67% |
| 2.00 | 100 ÷ 2.00 | 50% |
| 3.00 | 100 ÷ 3.00 | about 33% |
| 5.00 | 100 ÷ 5.00 | 20% |
| 10.00 | 100 ÷ 10.00 | 10% |
This leads to two terms you'll often hear:
- Favorite: The outcome is considered likely. The odds are low—for example, 1.30.
- Underdog: The outcome is considered unlikely. The odds are high—for example, 6.00.
So a high odds ratio doesn't mean "easy money." It means that this outcome occurs less frequently. In return, the payout is larger.
Each odds figure also includes a small cut for the provider. The payout percentage indicates what portion of the total wagers is returned to the bettors.
Best Betting Odds: How to Spot Them
The best betting odds aren't necessarily the highest ones. High odds indicate an unlikely outcome. What matters is whether the odds align with your assessment. If you think an outcome is more likely than the odds suggest, the bet could be worth it for you. To do this, convert the odds to a percentage and compare them with your own assessment. However, there's never a guarantee.
Why Odds Are Constantly Changing
Odds often change before a game. There are several reasons for this:
- New information: A player is out or a coach is leaving.
- Many bets on a single outcome: If many bettors bet on one side, the odds for that side go down.
- Changing conditions: Weather, the course, or form can affect your assessment.
With live betting, things move even faster. If a goal is scored or a red card is issued, bookmakers adjust the odds immediately. Sometimes, betting is paused briefly.
Important: This does not affect any bets you have already placed. The odds at the time you placed your bet are what count.
Multiple Picks, One Odds: How Parlay Bets Work
In a combination bet, you combine multiple picks. The individual odds are multiplied.
Here's an example:
- Tip 1: Odds of 1.50
- Tip 2: Odds of 2.00
- Tip 3: Odds of 2.00
The total odds are 1.50 × 2.00 × 2.00 = 6.00.
If you bet €10, you'll receive €60. The catch: You only win if all three picks are correct. If even one pick is wrong, you lose the entire bet.
The overall odds are rising rapidly. At the same time, the chance of winning decreases with each additional bet.
Ready to check the betting odds at MERKUR BETS yourself?
Now you know how betting odds work. You can calculate your winnings and convert odds into probabilities. You also know why odds change and how parlay bets work.
The next time you see odds, do a quick calculation. What are the chances behind that number? Does the potential payout match the risk? On MERKUR BETS, you'll find the latest odds for many sports and competitions.
FAQ on How Betting Odds Work
Odds are the factor by which your bet is multiplied if you win. With odds of 2.00 and a €10 bet, you’ll receive a payout of €20. At the same time, the odds indicate how likely the bookmaker believes a particular outcome is. The higher the odds, the larger the potential payout and the less likely the outcome is considered to be.
You multiply your bet by the odds. That is the payout. If you subtract the bet from that amount, you get the net profit. Example: 5 € × 3.00 = 15 € payout and 10 € net profit. You can also calculate the net profit directly using the formula: bet × (odds − 1).
Low odds indicate an outcome that is considered likely. The payout is small. High odds indicate an outcome that is considered unlikely. The payout is large, but so is the risk. For example, odds of 1.20 indicate a very likely outcome, but a €10 bet would yield only a €2 net profit.
Divide 100 by the odds. At 4.00, that's 25%. At 1.25, it's 80%. This shows you how likely an outcome is based on the odds. At odds of 2.00, the probability based on the odds is exactly 50%.
The payout rate indicates the average percentage of wagers that is returned to bettors. It is calculated based on the odds of a given market. At 95%, bettors would, in theory, receive €95 back for every €100 wagered. The provider keeps the remainder as profit. A payout rate of 100% would mean that the provider keeps nothing at all.
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