Betting Odds Explained: How to Read Odds, Spreads & Payouts (With Examples)

So you want to understand sports betting odds and how they reflect probability and payouts. This article will teach you just that and also how to read different odds formats (American, decimal, and fractional) and how those formats apply to spreads, moneylines, and totals. So let's get started.

Introduction: Why Odds Matter

In sports betting, odds are at the heart of every wager. They serve two crucial purposes:

• Reflect Probability: Odds are essentially the bookmaker’s estimation of how likely an event is to occur.

• Determine Payouts: Odds also tell you how much you can win relative to your stake when you place a bet.

Reading and understanding odds is the first step in becoming a savvy sports bettor. Throughout this article, we’ll break down the different odds formats (American, decimal, and fractional) and show how they translate to probability and potential profits. We’ll also cover examples of point spreads, moneylines, and totals (over/under) bets.

How Odds Reflect Probability

All betting odds (in any format) can be converted into an implied probability. Implied probability is the market’s best guess at the chance of something happening, taking into account both the true likelihood and the bookmaker’s margin (also called the “vig” or “juice”).

Implied Probability (%) = 1 / (Decimal Odds) * 100

When dealing with American or fractional odds, you can convert to decimal odds first—or use alternate formulas (detailed below).

Example:

• If you see decimal odds of 2.00, that implies a 50% probability.
• If the decimal odds are 1.67, the implied probability is roughly 1 / 1.67 * 100 = 59.88%.
• If the decimal odds are 3.00, the implied probability is roughly 1 / 3.00 * 100 = 33.333%.

The higher the probability (the more likely the event), the lower your potential payout. Conversely, less likely events come with higher potential payouts.

American Odds

What Are American Odds?

American odds are written with a plus (+) or minus (–) sign. They are predominantly used in the United States and can look like –150 (favorite) or +130 (underdog).

• Minus (–) odds show how much you need to wager to win $100. For instance, –150 means you must bet $150 to profit $100 if you win.

• Plus (+) odds show how much you’ll profit if you bet $100. For instance, +130 means a $100 stake returns $130 in profit (so $230 total back) if the bet wins.

Converting American Odds to Implied Probability

You can convert American odds to implied probability using different formulas for positive and negative values:

• If odds are negative (e.g. –150):

  Implied Probability = (-odds) / (-odds + 100) * 100

  Here, -odds means the absolute value (so 150 for –150).

  For –150: 150 / (150 + 100)  * 100% = 60%

• If odds are positive (e.g. +130):

  Implied Probability = 100 / (odds +100 ) * 100%

  For +130: 100 / (130 +100) * 100% = 43.48%

American Odds Example

Suppose you see a moneyline on an NFL game:

• Team A: –150

• Team B: +130

Team A at –150 implies about a 60% probability of winning (some margin for the sportsbook is baked in), so if you bet $150 on Team A, you’d make a $100 profit if they win. You’d receive $250 total back ($150 stake + $100 profit).

Team B at +130 implies about a 43.48% probability of winning. If you bet $100 on Team B, you stand to win $130 profit ($230 total return) if Team B pulls off the upset.

Decimal Odds

How Decimal Odds Work

Decimal odds (e.g., 1.50, 2.75, 3.00) are popular in Europe, Canada, and at many online betting sites. They represent the total payout (profit + your original stake) based on a 1-unit stake.

Example: If a line reads 2.50, a $10 bet would return $25 if you win ($15 profit + $10 stake).

Converting Decimal Odds to Implied Probability

The formula is straightforward:

Implied Probability = 1 / Decimal Odds * 100%

Example: Decimal odds of 2.50 correspond to an implied probability of 40% (1 / 2.50 * 100%).

Fractional Odds

How Fractional Odds Work

Fractional odds (e.g., 5/1, 2/1, 10/11) are common in the UK and especially for horse racing. The fraction represents profit relative to your stake.

• 5/1 (said “five to one”) means you win $5 profit for every $1 staked. So a $10 bet at 5/1 wins $50 profit (plus your $10 stake back for a total of $60).

• 2/1 means $2 profit for every $1 staked. A $10 bet returns $20 profit + $10 stake = $30 total.

• 10/11 means you win $10 for every $11 staked. This is a common fraction for near “even money” bets in European markets.

Converting Fractional Odds to Implied Probability

Implied Probability = denominator / (denominator + numerator) * 100%

Example: 

• 5/1: The implied probability is 1 / (5 + 1) * 100% = 16.7%

• 10/11: The implied probability is 11 / (11 + 10) * 100% =52.4% 

Common Bet Types and How Odds Apply

Odds in sports betting aren’t just for determining who wins or loses outright. Below are three of the most popular bet types—point spreads, moneylines, and totals (over/under)—with notes on how to read their odds.

Point Spreads

A point spread (common in football and basketball) is essentially a handicap to level the playing field between two teams of different strengths. 

• Favorite: Shown with a minus (-) sign, e.g. –7. To win a point spread bet on the favorite, the team must win by more than the given number of points.

• Underdog: Shown with a plus (+) sign, e.g. +7. A bet on the underdog wins if that team loses by fewer than the given number of points or wins outright.

Alongside the spread, you’ll see American odds such as –110 (typical for a standard spread bet). –110 implies you need to risk $110 to profit $100 if you win.

Example:

• The Miami Dolphins are –7 (–110) vs. the New York Jets at +7 (–110).
• If you bet the Dolphins –7, they must win by at least 8 points to cover. A $110 wager yields a $100 profit if it hits.
• If you bet the Jets +7, they can lose by up to 6 points or win outright for your bet to cash, also at $100 profit for a $110 stake.

Moneylines

A moneyline is the simplest form of sports wager—just pick the winner. There’s no point spread to cover.

• Favorites: Displayed with negative American odds (e.g., –150). A larger negative number indicates a heavier favorite with a higher implied probability of winning.

• Underdogs: Displayed with plus American odds (e.g., +130). Bigger plus means a larger potential payout relative to your stake because the implied probability is lower.

Example:

• Los Angeles Lakers –200 vs. Golden State Warriors +170.
• The Lakers are the favorites. A $200 bet returns a $100 profit.
• The Warriors are the underdogs. A $100 bet returns a $170 profit.

Moneylines are especially common in lower-scoring sports like baseball (MLB) and hockey (NHL), where a single point or goal can drastically change outcomes.

Totals (Over/Under)

A total (or over/under) bet focuses on the combined final score of a game. The sportsbook sets a “line,” and you wager on whether the total points/goals/runs will go over or under that line.

• In the NFL, a total might be 47.5 points.

• In the NBA, a total might be 222.5 points.

• In MLB, a total might be 8.5 runs.

Example: If an NBA total is 222.5, and the final score is 115–110 (combined 225), the total has gone over. If you bet the over, you win. If it’s 108–105 (combined 213), you win the under bet.

These bets also come with odds. Often they’re around –110 on both sides, meaning you risk $110 to win $100 whether you choose the over or the under.

Putting It All Together 

1. Identify the Odds Format: American (–150, +130), decimal (1.50, 2.30), or fractional (5/1, 10/11).

2. Determine Implied Probability: Convert odds to a percentage to understand the bookmaker’s take on the likelihood of an outcome.

3. Evaluate Value: Compare your estimation of the event’s probability to the implied probability. If your assessed chance of winning is greater than what the odds reflect, you may have found a value bet.

4. Place Your Bet: When you find a mismatch (value), stake a sensible portion of your bankroll. Always manage your risk and avoid going all-in on a single wager.

Conclusion

Odds are more than just numbers. They reveal how bookmakers perceive each team or event and indicate your potential return on a winning wager. By grasping how American, decimal, and fractional odds work—and by understanding the mechanics of point spreads, moneylines, and totals—you’ll be in a stronger position to place informed bets.

Remember to always consider implied probability alongside each bet type:

• Point Spreads even the playing field, focusing on the margin of victory.

• Moneylines let you pick the winner outright.

• Totals have you bet on the combined score going over or under a set line.

With a solid grasp of these odds and formats, you’re ready to explore more in-depth strategies, like line shopping, bankroll management, and situational handicapping. Informed betting can be fun and potentially profitable—but always wager responsibly and within your means.

Quick Reference Chart

Use this chart as a handy guide the next time you’re weighing a sports bet. Understanding how odds work is the foundation of smart, profitable sports betting.