American Odds in Sports Betting

The purpose of the section is to go in depth about how American odds work. It is not necessary for the casual sports bettor but should be essential if you plan to take sports betting seriously.

American odds, also known as moneyline odds, are one of the three main types of odds used in sports betting. They are commonly used in the United States and are often seen in American football, basketball, baseball, and hockey betting markets. American odds represent the amount of money a bettor must risk in order to win $100, or the amount of money that can be won on a $100 bet. Positive American odds indicate the amount that can be won on a $100 bet, while negative American odds represent the amount that must be risked to win $100.

American odds are used primarily in the United States because they are easy to understand and can quickly indicate which team or player is the favorite and which is the underdog. For example, if the New England Patriots have American odds of -150 to win a game, it means that a bettor would need to risk $150 to win $100 if they bet on the Patriots. Conversely, if the underdog Miami Dolphins have American odds of +200, it means that a bettor would win $200 if they bet $100 on the Dolphins and they win the game.

But why do the numbers work like this? Let's work converting the American odds back to decimal form, the more common format seen in other parts of the world. There are two steps to this process.

We will start at American odds of -110, a popular moneyline in the spread and over/under.

To convert -110 to decimal odds, we have to follow these rules:

  • If the number is negative, (|odds|) / (|odds| + 100)
  • The || means absolute value or, non-negative value
  • If the number is positive, (100) / (odds + 100)

Step one: Our odds are -110 so we follow the first rule:

(110) / (110 + 100) = 110/210 = 0.524

This number of 0.524 is known as the implied probability or break-even rate. What that means is if we made a bet at -110 American odds, and we did that 100 times, we would need to win at least 52.4% of our bets to break-even. If we win more than 52.4% of our bets, then we will have made a profit.

Step two:

Take 1 and divide that by 0.524.

1 / 0.524 = 1.91

We have now converted -110 American odds to 1.91 decimal odds. To use decimal odds, take your wager and multiply by the decimal odds to calculate your wager plus your winnings.

$100 * 1.91 = $191

While American odds are easy to understand and widely used in the United States, they are not as common in other parts of the world, such as Europe and Asia. In these regions, decimal and fractional odds are more commonly used. Decimal odds indicate the total payout a bettor will receive, including their initial stake, while fractional odds show the potential profit in relation to the stake. However, for those who are familiar with American odds, they can be a valuable tool in making informed betting decisions and understanding the potential payouts for different bets.

Move on to the next topic: How To Hedge Your Bets