If you’re new to sports betting, understanding implied probability is crucial to making smart wagers. Implied probability refers to the likelihood of an outcome as suggested by the odds offered by a sportsbook. It allows bettors to determine whether a bet offers value by comparing their own estimation of an event’s probability with the odds provided.
What Is Implied Probability?
Implied probability converts betting odds into a percentage that reflects the expected chance of an outcome happening. Bookmakers use it to set their odds, and savvy bettors use it to evaluate whether a bet is worth placing.
For example, if a team has decimal odds of 2.00, the implied probability is 50%. This means the sportsbook believes there is a 50% chance that the outcome will occur.
Why Implied Probability Matters
Knowing the implied probability helps you assess if a bet offers value. If you think an event has a 60% chance of happening but the implied probability from the odds is only 50%, then the bet may be worth taking.
This concept is especially useful for value betting-betting when the odds underestimate the actual probability.
How to Calculate Implied Probability
The method of calculation varies depending on the type of odds:
Decimal Odds
Implied Probability = 1 / Decimal Odds
Example:
Odds = 2.50
Implied Probability = 1 / 2.50 = 0.40 or 40%
American Odds
For positive odds (+):
Implied Probability = 100 / (Odds + 100)
Example:
+150 → 100 / (150 + 100) = 100 / 250 = 0.40 or 40%
For negative odds (–):
Implied Probability = Odds / (Odds + 100)
Example:
–150 → 150 / (150 + 100) = 150 / 250 = 0.60 or 60%
Fractional Odds
Implied Probability = Denominator / (Numerator + Denominator)
Example:
5/1 → 1 / (5 + 1) = 1 / 6 = 0.166 or 16.6%
Using Implied Probability for Value Betting
To find a value bet, follow these steps:
- Estimate the actual probability of an outcome yourself based on research and stats.
- Convert the sportsbook’s odds into implied probability.
- Compare your estimate to the implied probability.
- If your probability is higher than the bookmaker’s, the bet may offer value.
Example of Value Betting with Implied Probability
Let’s say you believe Team A has a 60% chance of winning. The bookmaker is offering odds of 2.20.
- Implied Probability = 1 / 2.20 = 0.454 or 45.4%
- Your estimated probability = 60%
Since your estimate is higher than the implied probability, this is a potential value bet.
Final Thoughts
Understanding implied probability in betting is a key tool for bettors who want to go beyond guesswork and apply logic and math to their wagers. It helps you spot value, manage risk, and make informed decisions. By mastering this concept, you increase your chances of long-term success in sports betting.