Betting odds do two jobs at once. They tell you how much a bet pays if it wins, and they tell you how likely the bookmaker thinks that outcome is. Once you can read both, you can compare prices properly, spot how much margin is built into a market, and make more informed decisions. In Australia, odds are almost always shown as decimals, so that’s where we’ll start.
Decimal odds: the Australian standard
Decimal odds show the total return for every $1 staked, including your stake.
- Odds of 2.00: a $10 bet returns $20 (your $10 back plus $10 profit).
- Odds of 3.50: a $10 bet returns $35 ($25 profit).
- Odds of 1.40: a $10 bet returns $14 ($4 profit).
The formula is simple: return = stake × odds, and profit = stake × (odds − 1). The lower the number, the shorter the price, and the more likely the bookmaker thinks the outcome is.
Implied probability
Every price can be converted into an implied probability: the chance of the outcome that the odds suggest.
Implied probability = 1 ÷ decimal odds
| Decimal odds | Implied probability | Return on a $10 bet |
|---|---|---|
| 1.25 | 80% | $12.50 |
| 1.50 | 66.7% | $15.00 |
| 2.00 | 50% | $20.00 |
| 2.50 | 40% | $25.00 |
| 4.00 | 25% | $40.00 |
| 10.00 | 10% | $100.00 |
Implied probability is useful for asking a better question than “will this win?” The question becomes: “Do I think this is more likely than the price suggests?” If you think a team wins 50% of the time and they’re priced at 2.50 (40%), the price looks generous to you. If they’re priced at 1.70 (about 59%), it doesn’t.
The bookmaker’s margin (overround)
Add up the implied probabilities of every outcome in a market and you’ll find they total more than 100%. The extra is the bookmaker’s margin, also called the overround.
Take a head-to-head market with two teams both priced at 1.90:
- 1 ÷ 1.90 = 52.6% for each team
- 52.6% + 52.6% = 105.2%
- The margin is about 5.2%
In a perfectly “fair” market, both teams would be priced at 2.00. The margin is how the bookmaker builds in its edge, and it varies between sports, markets and providers. Markets with many outcomes, such as first goal scorer, usually carry a larger margin than head-to-head markets.
Converting fractional and American odds
You’ll see other formats in international coverage. Here’s how they compare:
| Decimal | Fractional (UK) | American (US) |
|---|---|---|
| 1.50 | 1/2 | −200 |
| 2.00 | 1/1 (evens) | +100 |
| 2.50 | 3/2 | +150 |
| 3.00 | 2/1 | +200 |
| 5.00 | 4/1 | +400 |
- Fractional to decimal: divide the fraction and add 1. 3/2 = 1.5, plus 1 = 2.50.
- American positive (+150): divide by 100 and add 1 = 2.50.
- American negative (−200): divide 100 by 200 and add 1 = 1.50.
Multis and how odds combine
In a multi (also called a parlay or accumulator), the odds of each leg are multiplied together. Three legs at 1.80, 2.00 and 1.50 combine to 1.80 × 2.00 × 1.50 = 5.40. Every leg must win for the bet to pay. Because the margins multiply too, multis carry a bigger built-in edge than single bets, even though the potential return looks attractive.
Why odds move
- Team news: injuries, suspensions and late changes.
- Weight of money: heavy betting on one side shortens its price.
- Conditions: weather, ground and travel.
- In-play events: scores and momentum change prices live. See our guide to in-play betting.
The bottom line
Decimal odds tell you the total return per dollar staked, and dividing 1 by the odds tells you the probability the price implies. Add those probabilities across a market and the amount over 100% is the bookmaker’s margin. Understanding those three ideas makes every market easier to read, though no amount of maths makes a bet certain, so only stake what you’re comfortable losing.
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