Implied probability is the percentage chance of an outcome that the betting odds represent. Converting odds to probability is the single most important mathematical skill in betting.
Converting Decimal Odds
Decimal odds are the standard in most of Europe and on betting exchanges.
Formula: Implied probability = (1 / decimal odds) x 100
| Decimal Odds | Calculation | Implied Probability |
|---|---|---|
| 1.50 | 1/1.50 x 100 | 66.7% |
| 2.00 | 1/2.00 x 100 | 50.0% |
| 3.00 | 1/3.00 x 100 | 33.3% |
| 5.00 | 1/5.00 x 100 | 20.0% |
| 10.00 | 1/10.00 x 100 | 10.0% |
Converting Fractional Odds
Fractional odds are traditional in the UK, especially for horse racing.
Formula: Implied probability = denominator / (numerator + denominator) x 100
| Fractional Odds | Calculation | Implied Probability |
|---|---|---|
| 1/2 | 2/(1+2) x 100 | 66.7% |
| Evens (1/1) | 1/(1+1) x 100 | 50.0% |
| 2/1 | 1/(2+1) x 100 | 33.3% |
| 5/1 | 1/(5+1) x 100 | 16.7% |
| 10/1 | 1/(10+1) x 100 | 9.1% |
Converting American Odds
American odds use positive (+) and negative (-) formats.
For negative odds (favourites): Implied probability = |odds| / (|odds| + 100) x 100
-150: 150 / (150 + 100) x 100 = 60.0%
For positive odds (underdogs): Implied probability = 100 / (odds + 100) x 100
+200: 100 / (200 + 100) x 100 = 33.3%
Removing the Overround
Implied probabilities from bookmaker odds include the overround. To get a cleaner estimate, you can normalise:
- Calculate each outcome's implied probability
- Sum all implied probabilities (e.g., 104.5%)
- Divide each by the total: 47.6% / 104.5% = 45.6% (true probability estimate)
This gives you a fairer picture of what the market actually thinks.
Putting It Into Practice
Every time you consider a bet, convert the odds to implied probability and ask: "Do I believe this outcome has a higher chance than the odds suggest?" If your answer is yes -- and you have genuine reasons for that belief -- you may have found a value bet. If your answer is no, the bookmaker has priced the market correctly or against you.