# How Do Betting Odds Always Win?

Odds always win. That’s the fundamental premise behind most sportsbooks and online betting websites. It’s one of the first things new customers are told when they log on to these types of websites. While it seems like a no-brainer, it’s actually more complicated than you’d think. To demonstrate how and why odds always win, let’s take a quick trip down memory lane.

## Remember the Good Old Days

When sports betting was in its infancy, people generally didn’t have access to fancy odds calculators or sophisticated statistics. They didn’t have computers, either. So, when they wanted to get their fix of football betting, they’d simply place their bets at a street corner bookie’s. For instance, if they wagered \$100 on a game and the total was 45, they’d win \$45. This is because the bookie took the implied odds—that is, the odds that the bookie believes the laymen will use—of 45 points vs. 40 points. The bookie then adds the \$100 to the pot and collects his winnings.

This was the world of chance when betting odds didn’t exist. You either won or lost, based on luck. This formula often worked in favor of the underdog, someone betting on a game they didn’t think their team could win. For instance, if a fan of the Chicago Cubs bets on the team to lose the World Series, he’d most likely win his bet, since the bookie assumed the Cubbies wouldn’t cover the spread.

## Pro-Tip: How to Calculate Odds

While this scenario might seem like a total loss now (especially for the bettor), at the time it was a sweet deal. The bookie took the risk, the customer got his money back, and everyone was happy. This is generally how betting odds worked before they were implemented. If you want to calculate the odds for a specific event, you simply take the quotient of the total number of points scored in the event divided by the total number of points that could have been scored. For example, if the Patriots win the Super Bowl by scoring 45 points, their odds to win are 22.7 to 1.

Odds were generally given on a decimal basis. For instance, if the Patriots win the Super Bowl by scoring 45.5 points, their odds would be 22.747 to 1.

## The Birth Of Modern-Day Odds

Implementing odds changed the game. Before they were implemented, everyone got their fix of football betting simply by going to the corner store and spending a few bucks. With odds, you no longer need the old-school approach of going to a bookie and placing bets on games. You can also research games and odds, analyze them, and place bets on your mobile phone while you’re out shopping or dining with friends.

This was a huge paradigm shift for sports betting. Soon after they were implemented, people started seeing games and events in a whole different light. Not only did they have numbers to go by, but they also had the ability to keep track of games and odds over the course of a year. This gave rise to the modern-day sportsbook and online betting website. Nowadays, everything is done electronically, which makes data retrieval and analysis much easier. This, in turn, has made odds even better.

## The Incredible Power Of Compounding

If you add up the individual wins and losses of numerous small wagers over time, you will end up with a substantial amount of money. This is due to a mathematical phenomenon called compound interest. If you’re interested, you can read up on it here. Essentially, compound interest is when you make multiple wagers on the same event and the interest you earn on the first wager is added to the pot for the next wager. For example, if you wagered \$10 on a game and it ended up winning, the bookie would owe you \$12.50 for the next time you placed a bet on the same game. You would then add this \$12.50 to the \$10 you originally wagered, for a total of \$22.50—and so on.

This principle is at the core of why betting odds are so valuable. Even though you lose some of your money on each bet, over the long term you’ll end up making a profit. The key is knowing how to use the odds and how to make the most of them.

## Pro-Tip: The Mathematics Of Compound Interest

While the examples detailed above concern sports betting, the same concepts apply to other types of betting. For instance, if you bet on a horse race and selected Smart Bro in the second race, believing he was going to win, you’d win \$100. However, if Smart Bro went on to win the third and fourth races as well, your total winnings would be \$300. In this case, your original \$100 would be compounded by the interest derived from your second wager. The same would be true if you wagered \$100 on a basketball game and the score was 135 to 130 in favor of the visiting team.

As you can see, compound interest is a powerful tool when it comes to betting. It just takes a little bit of knowledge and leverage to make the most of it. For example, if you’re looking to take advantage of the NBA Finals and want to make some quick money, you could do worse than taking a look at the odds for each game. If you’re unfamiliar, the NBA Finals are two games between the Miami Heat and Dallas Mavericks, with the winners determined by the sum of the totals from the six previous games. You could make a quick buck by placing a \$100 wager on the underdogs in the finals (Mavericks); if they win, your \$100 will be worth \$300.

As mentioned above, the same concepts apply to gambling in general. If you want to be in the know, simply download a free odds app to your phone. Then, whenever you want to place a bet, simply log on to the website of your choice and enter the wager. For instance, if you want to bet \$100 that the Denver Broncos will cover the spread in their upcoming game against the Atlanta Falcons, simply enter this wager and the app will do the rest for you.