Implied probability and bookmaker margins

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Odds describe two things at once: how much a winning bet pays and how likely the bookmaker thinks the outcome is. Learning to read them in any format is the first step to judging whether a price is fair.

Decimal, fractional and American odds

• Decimal (2.50): multiply your stake by the odds to get the total return. €10 at 2.50 returns €25, including your stake.
• Fractional (6/4): profit relative to stake. 6/4 pays €6 profit for every €4 staked.
• American (+150 / −200): a plus number is the profit on a 100 stake; a minus number is the stake needed to win 100.

Implied probability

For decimal odds, implied probability is 1 divided by the odds. Odds of 2.50 imply a 40% chance. Add up the implied probabilities for every outcome in a market and you will get more than 100%; the difference is the bookmaker’s margin.

Why it matters

The lower the margin, the more of each stake comes back to bettors over time. Comparing margins across bookmakers is a simple, honest way to judge value. It does not make any bet a sure thing: the outcome is still uncertain.