Implied Probability | The Chance Of An Event Occurring

• Implied odds are the estimated probability of an event happening, based on the odds given by the bookmaker.

Implied odds are the estimated probability of an event happening, based on the odds given by the bookmaker

What Are Implied Odds?

In sports betting, implied odds or “implied probability” refers to the likelihood of a particular outcome occurring, as implied by the odds offered by a betting site. The implied odds are expressed as a percentage.

It’s important to note that betting sites do not usually present odds as percentages. Nonetheless, it’s important for bettors to understand the relationship between odds and percentages (implied odds).

The implied odds can be calculated by the simple formula:

Implied odds = 1 / decimal odds

The Significance of Implied Odds

Bookmakers use probability to determine the odds they offer on a particular outcome.

For example, if a bookmaker calculates that a particular football team has a 50% chance of winning a game, they will base the odds around that probability. In this case, the fair decimal odds would be 2.0 (or even money), as the implied odds represent this chance: 1 / 2.0 = 50%. However, the bookmaker will factor in their margin, typically setting those odds at a lower value, such as 1.8, thereby gaining an advantage over the player.

Learn how bookmakers set their odds

If a bettor determines that the probability of an outcome is higher than the implied probability suggested by the odds offered, this would be a wise bet to place.

For example, if a team has a 60% chance of winning a game, and the bookmaker is offering odds of 1.8 on that team winning, the bettor may see value in placing a bet because the implied probability (55.6%) is lower than the bettor’s estimated probability (60%). This is essentially value betting.

Pros & Cons of Implied Odds

Here are pros and cons of using implied odds in betting:

Pros

• Informs Betting Decisions

  Implied odds can help bettors make more informed decisions by accounting for the real-life likelihood of an outcome occurring.

• Helps Bettors to Find Value

  Understanding implied odds enables bettors identify when the odds do not accurately reflect the actual probability of an outcome, which can lead to finding value bets.

Cons

• Value Betting Requires Skill

  Implied odds are only useful if the bettor is able to accurately form the probability of upcoming events. This requires a certain level of analytical/mathematical skill, which not all bettors may possess.

More Odds Formats

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