Bets of all shapes and sizes can be found within the pages of any newspaper. However, knowing how to read betting odds properly can help you make the most of those bets and maximize your winnings.
What are betting odds?
Simply put, betting odds are the odds of winning or losing a bet. For example, if you bet on the favorite to win a particular race and he ends up coming in 1st, you’ll win your bet. However, if the favorite ends up coming in last place, you’ll lose your bet.
There are four elements that make up betting odds:
- The first is the odds makers
- The second is the selection
- The third is the action
- And last but not least, the destination
The first thing you need to keep in mind is that you cannot read betting odds accurately simply by looking at them. This is especially important if you’re reading an online odds calculator, where a lot of distractions can creep in and muddy your judgement.
Take the example above. The first two elements, the odds makers and the selection, are the same. However, the action, which is the stake you’re risking, and the destination, which is where your money will go if you win, are opposite each other. With online betting odds calculators it is usually easiest to just enter the first two elements (the odds makers and the selection) and let the software figure out the rest for you.
Who Sets The Odds?
One important thing to note about betting odds is that they are set by the bookmakers. Bookmakers set the odds for a variety of reasons. For example, they might want to encourage more people to come in and place bets or they might just want to give their favorite horse or dog a better chance of coming in first place. Whatever the reason, the bookmakers set the odds and punters (individuals placing bets) have no say in it.
The setting of the odds can be a little tricky. For instance, if you look at horse racing odds they are usually set fairly high. This means that even though you might have a relatively good chance of winning, you’ll have to risk a lot to do so. That’s because the bookmaker takes a big chunk of the winnings if you do happen to win.
On the other hand, look at baseball odds and you’ll notice that they are set relatively low. This means that although you might have a good chance of winning, you won’t have to risk nearly as much as you would in horse racing. Take a look at the difference:
- Horse Racing Odds: 4.7
- Baseball Odds: 2.7
You’ll notice that there are more zeros at the end of the baseball odds than at the end of the horse racing odds. This simply means that bookmakers prefer to offer lower odds for sports like baseball because they know there’s less of a chance of losing money. It’s a numbers game and if you play your cards right you can exponentially increase your winnings.
What Is The Selection?
The selection is, as the name would suggest, the choice of the horse or the dog you’ll bet on. To get an idea of how this element of the odds works, look back at the example above. If you choose, for instance, the Cleveland Indians in the World Series you’ll be placing a bet on the selection, which is simply a person or a group of people, to win the World Series. This means the bookmaker has picked the Indians as the team you’ll be using to win your wager. Although the selection is usually the first element of betting odds, it’s actually the last one that determines your outcome. The first three elements, the odds makers, the action, and the destination are irrelevant if you lose because they didn’t matter in the first place.
What distinguishes the selection from other three elements of betting odds is that it can be changed at any time by the bookmaker. This means that if you think the odds are against you and there’s a chance of recovering your losses, you can switch horses or dogs to maximize your chances of winning.
What Is The Action?
The action, as the name suggests, is simply the part you’re risking, which in this case is your money. If you place a wager on Cleveland to win the World Series, your action is the money you’ll be losing if the Indians don’t make it to the championship.
This element of the odds is also the most crucial one because it directly correlates to your outcome. Look back at the example above and notice that your action is different depending on whether the favorite wins or loses. If the favorite wins, your action is $10. If the favorite loses, then your action is $20. This is a pretty important difference and something to keep in mind if you’re a little confused by all the zeros at the end of the betting odds calculator.
What Is The Destination?
The destination, as the name would suggest, is where your money goes if you win. In most cases, this is either a person or a group of people or an institution (such as a bookmaker or a bank).
This element of the odds is also extremely important because it directly determines your winnings. Even though the action is the most crucial part of the odds, it’s actually the destination that brings it all into reality. Take a look at what will happen in the case of the Cleveland Indians winning the World Series:
- The $10 you bet will be paid out to you
- The $20 you bet will be taken and multiplied by 2
As you can see, in the case of the Cleveland Indians winning the World Series, you’ll end up with $20 no matter what. This is because the bookmaker will always payouts the action, even if they lose. As for the reason behind this, it’s probably because the bookmaker is taking a big chunk of the action and the rest is divided among the winning bettors. In some cases, the bookmakers can be quite generous and give you the full amount of your action if they lose. However, this is very rare and most often you’ll just end up with part of it.
As mentioned above, the destination can be either a person or a group of people or an institution. This is also reflected in the example above. If you bet the $10 on the Cleveland Indians you’ll either get $10 back or you’ll lose $10. However, if you bet the $20 on Cleveland you’ll either get $20 back or you’ll lose $40. This is because the bookmaker will always repay the 20, even if they win.
Example Of A Winning Bet
Now that you know the four elements that make up betting odds you can see how they work together to create the final outcome. Let’s take a look at how all of this comes together in practice.
As mentioned above, the selection in most cases is the first element of betting odds and is usually made up of a single team or an individual. Here’s an example of a winning bet where you bet on an individual to win the World Series:
- Horse Racing: Isak Fryxell in the World Series
- Baseball: Aaron Judge
The action, the part you’re risking, in this case is $10 and the destination, where your money will go if you win, is $10 as well. This means that you’ll either win $10 or lose $10 on this particular bet. However, this is the exception and not the norm. Normally, this type of bet will be settled based on the odds makers, which in this case are 5/1 (5 for the Yankees and 1 for the Red Sox), as opposed to 2.7/1 in the baseball example above.
Why Are The Odds Usually Stacked In Favor Of The Favorite?
It is generally accepted that odds are set in favor of the favorite. This simply means that if you’re betting on someone or something you already know will win, the odds will be in their favor. In the example above, since you already know that the Yankees will win the World Series, the odds will be stacked in their favor.