The odds ratio (OR) is a popular choice amongst bettors for generating probabilities in sports betting. Simply put, the odds ratio of a sports event is the ratio of the favored team’s odds to the underdog team’s odds. For example, if a hockey puck is traveling towards you and the goalie is standing in between the net and you, the odds of scoring a goal are 1 in 3 (33%), but if the puck is traveling towards you and the goalie is standing directly in front of you, the odds of scoring a goal are 1 in 10 (10%). The odds of winning are then 20% (1 in 5) and the odds of losing are 8% (1 in 12). The odds ratio in this case is 10 to 1, or 1.0. The same principle applies in other sports like basketball or football.
Although the theory of probability might be intimidating to some, understanding the odds ratio system isn’t as hard as you’d think. In this article, we’ll run down the basics of the odds ratio system and how to use it effectively when betting on sports.
Key Facts About The Odds Ratio System
One of the first things you need to know about the odds ratio system is that the results are based on the original score of the game. Let’s say you’re watching a hockey game between the Sharks and the Ducks and the score is 2-1 at the end of the third period. Your odds of winning if you bet on the Sharks at 3:00 p.m. are 1 in 3 (33%), but if you bet on the Ducks at the same time, the odds of winning are 1 in 4 (25%). The reason behind this is that the Sharks have to win by two or more goals to justify betting on them while the Ducks only have to win by one goal to make your money back (assuming you win).
Another important fact about the odds ratio system is that it’s ratio-based. Remember, in probability, everything is based on the denominator. In this case, the denominator is the number of goals scored in the game. The more goals, the higher the denominator and the more accurate your odds will be. This is why it’s preferable to use the ratio of the scores as the numerator. The reason behind this is that sometimes the final scores of a game can be misleading, especially when one team is very dominating. For example, if the Sharks dominate the Ducks in a blowout game 7-2, it would be very difficult for you to justify betting on the Ducks at 3:00 p.m. even if they were the better team.
The Use Of The Odds Ratio In Sports Betting
When used correctly, the odds ratio can be very effective at generating probabilities in sports betting. Let’s say you’re watching the NBA and the score is tied at the end of the third period. Both teams have the same record (7-6) and you have the choice between betting on the Knicks or the Wizards. Your best chance of winning is then with the Knicks at 2:00 p.m., as their odds are then 5/7 (71.43%), but the odds of winning with the Wizards are only 4/7 (57.14%). However, with the Knicks, you’re safe in the knowledge that they will win the game – regardless of whether they score one point or blowout the Wizards. With the Wizards, you’re taking a bigger risk if they win (although it’s still possible), especially at the later timeslots. The reason behind this is that if the game ends in a tie, the number of goals scored is irrelevant and your chances of winning are based on the original score.
To give you a better understanding of how to use the odds ratio system, here are a few examples of how to calculate the probabilities in different situations.
Example #1: Favorite To Underdog (Half-Time & Full-Time)
This is the most basic of all the examples and it usually applies when you’re watching a team that you deem to be an underdog. You’re essentially trying to figure out what the odds are of the team you support winning at that time. You do this by looking at both the favorites’ and the underdogs’ odds and figuring out which is the better chance of winning. In a half-time (or preliminary) score, say at the end of the first period, the favorites are the Knicks at 2:00 p.m. with odds of 1 in 4 (25%), the Wizards at 4:00 p.m. with odds of 1 in 5 (20%), and the Thunder at 8:00 p.m. with odds of 1 in 10 (10%). Your best bet is then the Knicks at 2:00 p.m. if you want to win the game outright. However, if you want to minimize your losses, it would be better to back the Wizards at 4:00 p.m. and the Thunder at 8:00 p.m.
Example #2: Two Teams Are Tied (Preliminary, Half-Time, & Full-Time)
This example is very similar to the first one, except that now the teams are tied at the end of the third period and you have to decide whether to continue betting on the game or not. Let’s say in our previous example, the first two periods were tied 3-3 and the last two were tied 5-5. Your best bet then is to back the Thunder at 8:00 p.m. despite them being the underdog because they have the better of the two chances of winning. If you choose to continue betting on the game, the next best option would be the Wizards at 4:00 p.m. followed by the Knicks at 2:00 p.m. In a half-time score, it’s the same as above – the Knicks at 2:00 p.m. have the best chance of winning, but in a full-time (or final) score, the Thunder are the clear favorites.
Example #3: Favorite To Underdog In Overtime
This example is very similar to the first one, except that now the teams have played several periods and you have to decide whether to continue betting on the game or not. Let’s say the score is 4-4 at the end of regulation time and the game goes into overtime. At the beginning of overtime, the favorite is the Knicks at 2:00 p.m. with odds of 1 in 4 (25%), the Bulls at 4:00 p.m. with odds of 1 in 5 (20%), and the Cavaliers at 8:00 p.m. with odds of 1 in 10 (10%). You can then continue betting on the game, but because the score is tied, your chances of winning are then based on how long the game goes on for. Longer periods mean higher chances of a goal and a win for either team. So, in this case, it would be better to back the Bulls at 4:00 p.m. and the Cavaliers at 8:00 p.m.
Example #4: Two Teams Are Tied In Regulation, One More Period To Play
This example is a combination of the two previous ones. Now the teams are tied in regulation and the game goes into overtime. Let’s say at the beginning of overtime, the score is 4-4 and the game continues for another 20 minutes. At the end of regulation time, the score is 4-4 and it goes into overtime. The NBA used to do this a lot when you’d have tied games late in the season where they’d play a sudden-death overtime period to determine the winner. In this case, because there’s still one more period to play, it would be preferable to back the Bulls at 4:00 p.m. and the Cavaliers at 8:00 p.m. Although the odds of winning might not seem as favorable in this case, you’re still taking a lesser chance of losing.
Hopefully, these examples were easy enough to understand. Now that you know how to calculate the probabilities in various situations, it’s time to put them into practice. Remember, however, that this is a dangerous game to play. The theory is not all that complicated, but putting that theory into practice is a different matter. You have to be careful and know when to quit. Sometimes betting the exact odds can be harmful. This is why it’s usually better to lay off a bit (or a lot) when placing bets. For example, if the game is late in the season and you’re trailing by a large amount of points, it might be a good idea to take a break. This way, you don’t risk getting seriously hurt by running up huge losses when the team you support is losing by a lot.
Of course, there are many different situations in which you might find yourself when betting on sports. These four examples should give you a good idea of how to use the odds ratio system in different situations and the different ways it can affect your decisions.