Probability & Implied Probability
To generate income out of sports wagering, you have to recognize the difference between odds and probability. Fundamentally the two are linked; odds aren’t necessarily a direct reflection of the possibilities of something taking place or not happening. Implied probability in sports betting is subjective, understandable, and essential. Both bettors and bookies alike are going to have a disagreement when it pertains to predicting the likely outcome of a game.
Possibilities typically vary by 5% to 10%: sometimes less, sometimes more. Successful sports betting is mainly about making precise evaluations about the likelihood of an outcome and then identifying if the chances of that result make a wager beneficial. To make that decision, we need to understand the implied probabilities.
In the context of sports betting, the implied probability is what the odds suggest the possibilities of any given result happening are. It can help us to determine bookmaker’s benefit in a wagering market. More notably, the implied probability is something that can assist us in figuring out whether a wager provides us value.
To discuss implied probability more clearly, let’s look at this ideal football match. Imagine there’s a match between 2 teams of a similar standard. A bookmaker provides both sides the exact very same possibility of winning, and so costs the odds at 2.00 (in decimal format) for each team. In practice, a bookmaker would never set the odds at 2.00 on both teams, for reasons we describe a little later. For the sake of this example, however, we will presume this is what they did.
What these odds are telling us is that the match is the same as a coin flip. There are two possible results, and each one is just as most likely as the other. In theory, each side has a 50% opportunity of winning the match. This 50% is the suggested possibility. It’s simple to work out in such an easy example as this one, but that’s not always the case. Thankfully, there’s a formula for transforming decimal odds into implied probability.
Implied Probability = (1/Decimal Odds) x 100
The odds in our football match example are 2.00, as we have currently mentioned. So 1/ 2.00 is.50, which multiplied by 100 offers us 50%. If each side did have a 50% opportunity of winning this match, then there is no point in placing a wager on both of them. You’ve got a 50% chance of doubling your money and a 50% chance of losing your stake. Your expectation is neutral.
You may believe that one team is most likely to win. Possibly you have been following their kind carefully, and you think that one of the teams has a 60% possibility of beating their challenger. We have simplified things here, as the function of this page is to describe all how odds matter when betting on sports.
In the meantime, you need to comprehend that chances can tell us the indicated likelihood of a particular result happening. If our view is that the real possibility is higher than the implied probability, then we have discovered some worth. Finding value is a crucial ability in sports betting and one that you must attempt to master if you wish to succeed.