People who enjoy playing games may be familiar with the concept of odds and probabilities. If you’re reading this, I assume that you either are or at least know someone who is. If not, then this article is probably not for you; but if so, then you’ll enjoy reading about converting odds and probabilities into usable information for betting.
Converting odds and probabilities into more understandable information is what motivated me to write this article. I’ve seen a lot of people struggling with understanding these concepts, so I decided to break it down into simpler steps. Consider this article as a road map for converting odds and probabilities into useful information for betting.
Step one: The Basics
I assume that if you’re reading this, you either already know or can find out the basics of probability and odds. For those of you who need a reminder, here are the basics.
Probability: The chance of something happening.
Odds: The ratio of the amount of one thing to the amount of another.
The mathematics of both are the same, but the interpretation is somewhat different. Imagine that you have 10 red balls and 15 black balls in a bag. The probability that a given ball is red is 10 percent, and the probability that it’s black is also 10 percent. The odds of the red ball are then 10:1, which makes sense given that there are 10 red balls in a bag and only 1 black ball. The probability and the odds are therefore the same in this case; but the interpretation is different. With probability, you’re told what the chance is of something happening; and with odds, you’re given the chance to decide whether you want to wager on that something happening or not.
Step two: Calculating Winning Odds
Odds are often used to determine the winning chances of an event. To do this, you take the opposite of the odds and multiply it by 100 to get the percentage. So, if the odds of getting a red ball are 10:1, then the percentage of getting a black ball is 90 percent. This means that if you want to bet that the next ball will be black, then your odds of winning are 90 percent, which you can round up to 95 percent. The same goes for a red ball; in this case, your odds of winning are 10 percent, which rounds up to 11 percent.
The calculation is very straight forward, but it’s important to understand the reason behind it. If you don’t, then you might be tempted to use these numbers without considering the other possible outcomes.
Step three: Calculating Unit And House Edge
The mathematics of probability and odds are the same, so you can use either to find the amount of money that you have to wager to achieve a certain chance of winning. To find the unit and the house edge, you take the inverse of the probability of the event you’re trying to achieve and multiply it by 100. For example, if you want to achieve a probability of 95 percent of getting a black ball, then you have to wager 95 times the amount of money you have on your betting slip. The unit for black is then 5.0; and the house edge for black is 5 percent, which you can round up to 5.5 percent.
You can use this same method for red balls, replacing the probability with the odds. The house edge on red is then 10 percent, which you can round up to 11 percent.
Step four: Converting Probabilities Into Odds
You can use probability to determine the chances of winning or losing an event. To do this, simply take the chance of your chosen event and divide it by 100 to get the probability. If you’re playing roulette, then the probability of getting a black ball is 33.3 percent, and the probability of getting a red ball is 66.7 percent. These numbers determine your winning odds for black and red, respectively. The same goes for the other numbers on the wheel. The chances of winning are always expressed as fractions, with which you can then easily convert them into odds to determine your winning chances.
Step five: Checking Your Work
Before you start betting, it’s important to make sure that your calculations are correct. To do this, simply use the law of averages to determine the expected value of your wager. This is the total amount of money you need to wager, as calculated above, multiplied by the probability of the event you’re trying to achieve.
If the expected value of your wager is positive, then you’re probably good to go. However, if the expected value is negative, then you’ll need to adjust your wager or choose a different event to achieve. The expected value of your wager is only as good as the mathematics behind it are correct. If you want to be sure that you’ve done your calculations correctly, then there are two options. Either use a quick and easy method, like the one described above, or use a program like MyWAG to ensure that your calculations are correct. You can find the law of averages in three very easy steps.
Although the mathematics behind probability and odds are very similar, the interpretation is somewhat different. Probability is used to determine the chance of an event, while the odds are used to determine whether you’ll win or lose an event. This is largely because people are more familiar with probabilities; but understanding these two concepts is very important for all gamers, including those who enjoy betting games. For those of you who are interested in becoming more serious about betting, then I highly recommend finding a book that covers this topic in-depth. There are several such books available on Amazon, and I’m certain that many of your favorite authors published books on this topic as well. Good luck!