Bets Explained: Understanding the Odds
Expressions such as “playing the odds” and “against the odds” are quite common in the English language but what exactly are the “odds” and how do they work?
Any game of chance or bet involves a certain amount of risk and the more unlikely or difficult the outcome the greater the risk involved. If you place a bet on a horse to win a race but that horse happens to be at the back end of his career, has never won in his life and is the 250/1 outsider to win this particular race then it can be truly said that the chances of your selection winning are very slim indeed. Another way to express your chances of winning is to say that the odds are against you. In this case, your chances are rated as 1 in 250 or 250/1, the / in any odds quoted standing for the word “to”. Odds basically come in two forms: odds against and odds on (usually written as “odds-on”) which are the alternatives to an even money bet.
Even money. Before moving on to explain odds-on and odds against, it probably makes sense to understand what an even money bet is. This is the bet you would have with a friend on the outcome of, for example, a football match. You bet £10 that the Red team will win and your friend matches that bet with his own £10 on the Blue side. In this case, you are both betting £10 on your team with both players either making a £10 profit or loss depending on the outcome of the game. This is called an even money bet and is written in bookmakers’ odds lists as 1/1 or Evens.
Exactly the same principle applies when betting with a bookie as you will either win £10 of the bookie’s money if your selection wins or lose your £10 if your team fails to win. You will notice, however, the phrase “fails to win”. This means that the bookie actually has two chances of taking your money as a draw will also count in his favour unlike betting with friends where a draw just means the bet is cancelled. There is, of course, the option of betting on a team to win and backing them with a “draw no bet” stipulation. This will reduce your chance of losing but also reduces the odds compared to a straight win bet.
Odds Against. Bookmakers compile odds on any event with the aim of attracting people to bet but also, and probably more importantly, to ensure the bookie will make a profit or, at worst, limit losses. For this reason, odds quoted on any outcome are really a guide to the chances of victory rather than a true reflection of the team’s, player’s or horse’s chances. Odds against are written in the format 2/1 or 5/2 or 21/10 where the first number is the multiple by which your original stake is multiplied.
Let’s take the example of betting £10 on a horse to win and the trusty steed duly obliges at odds of 5/2. You have won the bet and it’s time to collect your winnings but how much can you expect to receive? It’s a quite simple mathematical procedure. The bookie will pay you 5 to 2 (5/2) or £5 for every £2 you staked. In this case, you wagered FIVE times the £2 and for every £2 you receive £5. Therefore each of your £2 pays back £5 and because you had wagered FIVE times £2 you receive FIVE times £5 back making a total of £25 the bookie must pay you plus a refund of your original £10 stake making a total of £35.
The formula is relatively simple. Divide the number before the slash / (in this case 5) by the number after (2) to give you the multiplying factor which is 5 divided by 2. So your original stake is multiplied by 5 divided by 2 which is 2.5. The original stake (your £10) is multiplied by 2.5 to give £25 plus the original stake money of £10 for a total of £35.
Odds-on. Exactly the same principle and formula applies to odds-on bets but the payout will obviously be much lower. Again, let’s take our £10 winning bet but this time the winner was returned the odds-on 1/2 favourite. Following the formula of dividing the first number (the 1) by the second (2) will give a multiplying factor of a half or 0.5. Multiply the original £10 stake by 0.5 means you have won £5 and will receive a payout of £5.00 (your winnings) plus £10 (the original money staked) for a total of £15.
Clearly an odds-on winner is not as desirable or lucrative as a winning bet at 25/1 but those odds are so short because the result should be the proverbial “dead cert” but, as we all know, there is n