What are odds?
Odds in a strict betting sense denote the ratio of a payout to a stake. The payout is the total amount paid by a bookmaker to a punter who makes a correct betting call. A stake is an amount wagered by a punter on the probability of his chosen outcome occurring. In looser contexts, odds are taken to represent the probabilities of the events they are attached to occurring. This is not a very precise definition due to the fact that the bookmaker has built-in “overrounds” into the figures to accommodate his own profits no matter what outcome turns up. Whereas, statistical probabilities on the possible outcomes of an event sum up to 1 or 100%, betting odds build up to more than 100% to accommodate the bookmaker’s profit.
Odds are mostly expressed in two forms, fractional odds (traditional) and decimal odds (continental). Fractional odds relate the amount a punter wins relative to his stake if his bet is successful. A fractional odd of 8/2 means the punter would get Ksh8 for every Ksh2 that he stakes on a bet. The fractional odds system is more commonly used in the United Kingdom. Decimal or continental odds give the ratio of payout to stake and is the preferred method for stating odds in most parts of the world. The big difference between both systems is that the fractional system doesn’t factor in the stake of the punter in expressing the payout, while the decimal system does.
How does odds work?
As defined earlier, odds give the mathematical ratio of a payout to the stake in betting. Most odds are expressed in decimal form, and they serve as multipliers of a stake when computing the total payout of a successful bet. An example of this works is painted in the scenario described below:
Suppose there is a league game between Manchester United and Arsenal at the latter’s home ground. The 1X2 bet type fixed a Manchester United home win at odds of 1.90, a draw at 4.30, and an Arsenal away win at 2.80. If a punter stakes Ksh10 on a Manchester United home win and it turns out Manchester United won, the punter would receive a payout calculated as:
Payout = 1.90 (odds) x 10 (stake)
The punter has made Ksh9 in addition to his Ksh10 stake, so the total payout is Ksh19. Online betting platforms already work out what the payout on a stake would be and put the figures on the bet slip.
Significance of what are odds
Odds paint a picture of the probability of an expected outcome occurring in betting. Outcomes that have a high degree of occurring usually have very low odds attached to them. The more likely a probable outcome will occur, the lower the numerical odds attached to it. Improbable outcomes of an event will have relatively high odds attached to them. The odds fixing mechanism takes cognizance of the risks a punter is taking on when he bets on an outcome and issues rewards for the risks in the form of odds. In sports betting, they are fixed taking certain factors surrounding a game into consideration. Some of the factors include the relative strength of the competitors, recent form, venue (home advantage) and history. Seasoned punters have an idea of how this works and are able to make informed decisions before staking their bet.