Using Betting Odds to Estimate Favourites
2024-03-16Betting odds are interesting to know while watching a sporting event. Often, the bookkeeper (the betting site) has good data to size up the matchups to set a good betting line. This betting line is useful as a spectator to help assess who is the favourite/underdog, and by how much.
How to interpret betting odds
Example from the 2024 BKT Tires World Women’s Curling Championship Draw 1 Matchup (Canada vs Sweden):
- Sweden Women: 2.75
- Canada Women: 1.40
Explained by ChatGPT:
Sweden Women (2.75): This means that if you bet 1 unit of currency (e.g., 1 dollar, 1 euro, etc.) on Sweden Women to win, and they do win, you would receive a payout of 2.75 units. So, if you bet $1 on Sweden Women and they win, you would receive $2.75 in total (your original $1 stake plus $1.75 in profit).
Canada Women (1.40): This indicates that if you bet 1 unit of currency on Canada Women to win, and they do win, you would receive a payout of 1.40 units. So, if you bet $1 on Canada Women and they win, you would receive $1.40 in total (your original $1 stake plus $0.40 in profit).
You can also take these payout odds, and convert them to “implied probabilities” of winning:
Sweden Women (2.75): Implied probability = 1 / 2.75 ≈ 0.3636 or 36.36%
Canada Women (1.40): Implied probability = 1 / 1.40 ≈ 0.7143 or 71.43%
But that doesn’t add up to 100%...
That’s because betting sites make money on bets placed, called the “house edge”.
Subtract the total implied probability from 1 to find the house edge: 1−1.0779 ≈ -0.0779
The house edge in this case is approximately -0.0779 or -7.79%. This means that, theoretically, the bookmaker expects to keep around 7.79% of all bets placed over time as profit.
By using this information, you can easily calculate the “implied probability” based on the betting odds, adding some interesting data to your experience in watching the game.