# How Betting Odds Work - Gambling for Beginners

If you're new to placing bets, especially as beginner sports bettors, it’s important to learn exactly how betting odds work. Thankfully, it’s quite easy to understand and it is important for two key reasons.

**It helps you calculate the probability of an outcome happening.****It helps you calculate how much money you will make if your bet wins.**

Calculating Probability From Betting Odds

Calculating Probability From Betting Odds

Whenever you see odds offered in fractions (aka fractional betting), i.e. 4 / 1, it’s quite simple to calculate the probability (i.e. the percentage chance of the outcome happening). To simplify the explanation, we’ll replace the numbers with letters to help you understand the simple formula: 4 / 1 turns into A / B.

Probability % of outcome happening = B / (A+B)

Let’s show you some examples:

- Probability of an outcome happening with odds of 4 / 1 is 20%
*as 1 / (4 + 1) = 0.20 = 20%* - Probability of an outcome happening with odds of 9 / 1 is 10%
*as 1 / (9 + 1) = 0.10 = 10%* - Probability of an outcome happening with odds of 1 / 4 is 80%
*as 4 / (1 + 4) = 0.80 = 80%*

That’s the hard part out the way, now let’s show you how to calculate your profit from betting odds when you make a wager!

**Using Betting Odds to Calculate Winnings**

Betting odds also indicate how much money you can win if the outcome does actually happen. Using the same example as before where 4 / 1 becomes A / B. For every amount of B you bet (aka wager), you will win A amount.

Let’s run some examples:

- 9 / 1 - for every £1 you bet, you will win £9
- 4 / 1 - for every £1 you bet, you will win £4
- 1 / 4 - for every £4 you bet, you will win £1

**Fractional Vs Decimal Odds**

There are different odds formats. Bookmakers promote odds in 2 forms, fractional and decimals. Most people actually find calculating winnings in decimal style odds easier. You’re usually going to see decimal style odds shown in betting exchanges, such as Betfair.

Here’s how we calculate winnings with decimal style odds, it's really easy:

Winnings = (decimal odds x stake value) – stake value.

Let’s run some examples:

- Odds of 5.0 with £10 stake: (5.0 x £10) - £10 = £40 profit
- Odds of 9.0 with £20 stake: (9.0 x £20) - £20 = £160 profit
- Odds of 1.25 with £50 stake: (1.25 x £50) - £50 = £12.50 profit

**Converting Fractional Odds into Decimal Odds**

As most people find it easier working with decimals, it can be useful to convert fractional odds into decimal odds. Here's how you do it:

Imagine your Fractional Odds as A / B.

Decimal Odds = (A / B) + 1

Let’s run some examples:

- 5 / 4 odds = 2.25 odds
*as (5 / 4) + 1 = 2.25* - 3 / 1 odds = 4.0 odds
*as (3 / 1) + 1 = 4* - 1 / 12 odds = 1.08 odds
*as (1 / 12) + 1 = 1.08*

Note that you can change the odds format in the betting odds section of each bookie site to your preferred style.

**Next Steps**

That’s all there is to understanding how betting odds work! Now you’re ready to place your first bet.

Found this free guide useful? Find even more useful betting tips and tricks in our free guides section and on our **YouTube channel**!

**Understand Matched Betting****What Does Liability Mean In Betting Exchanges**

**Seen enough? Check out our homepage and we'll show you how to make guaranteed profits from Matched Betting.**

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