Understanding Odds

Understanding betting odds is a vital component when wagering on horse racing. Knowing what the odds represent unlocks important information that every punter needs to know before betting in earnest: what is the chance of my selection winning? How much can I potentially win?

When I had betting odds and Probability explained to me in a simple manner it moved my understanding of the racing game on in leaps and bounds.

How do betting odds work?

Betting odds are usually expressed as fractions, 2/1, 7/2 and 6/4 as examples. With the aid of a simple calculator or spreadsheet we can calculate how much we can win from a bet and also the percentage chance of our chosen selection. Let's start with the first odds mentioned, the 2 to 1 chance, written as 2/1. We can find the percentage chance of the 2/1 shot winning by adding the right hand side (1) to the left hand side (2) giving us 3, the right hand side (1) is then divided by 3 giving the answer 0.333 or 33.3%. Now we can calculate any odds that are expressed as fractions. Let's try the 7/2 chance, add the 2 to the 7 giving 9 and divide 2 by 9 which gives us 0.222 or 22.2%. The 6/4 shot has a 0.40 (40%) chance of winning, 4 added to the 6 (10) 4 divided by 10 = 0.4, it's that simple. Awkward odds like 13/8 can easily be calculated, 13 + 8 = 21, 8 divided by 21 = 0.38 (38%).

For your convenience we have provided a Betting Odds Percentage Table

Now that we have mastered understanding betting odds, calculating returns is just as simple. Our 2/1 shot is simple, 2+1 = 3, if we have £10 on at 2/1 we have a return of £30, £20 winnings and our stake of £10 = £30. 7/2 is 7+2 = 9, 9 divided by 2 = 4.5, so £10 at 7/2 returns us £45, £35 in winnings plus our £10 stake. 6/4 is 6+4 = 10, 10 divided by 4 =2.5, £10 at 6/4 returns £25, £15 in winnings plus our £10 stake. And what of the awkward 13/8? It's not awkward any more, 13+8 = 21, 21 divided by 8 = 2.625, £10 at 13/8 returns £26.25. We are now in position to use Horse Racing Odds to make a backers book.

From the early morning prices or the Live on course market we can estimate whether there is value in the market.