The world of betting runs on odds. But what are these odds? What do they mean and how are they generated? This and more are explained in detail in this article.
What are Odds?
Odds in sports betting are a way of representing probabilities of outcomes in monetary terms. If the probability of a particular outcome is more than the probability represented by the odds for that outcome, it makes monetary sense for the bettor to wager on that outcome. Unfortunately, most people are unaware of this while making their picks which results in more losses than wins. This was one of DexWin’s inspirations in building a more fair and transparent betting platform. Understanding how odds work is an important first step in becoming a successful sports bettor and this article is aimed at educating our community on this very aspect.
Types of Odds:
Decimal odds (aka “European” odds, “Digital” odds, or “Continental” odds) are popular in continental Europe, Australia, New Zealand, and Canada. These are a bit easier to work with and understand. The favorites and underdogs can be spotted instantaneously by looking at the numbers.
The decimal odds number represents the amount one wins for every $1 wagered. For decimal odds, the number represents the total payout, rather than the profit. In other words, your stake is already included in the decimal number (no need to add back your stake), which makes its total payout calculation easier.
The total (potential) return on a stake can be calculated as:
Total Payout = Stake x Decimal Odd Number
Decimal odds of 4.0 means that if you staked 100 $USDC on a basketball game, you would receive 400 $USDC including your 100 if your team won.
Moneyline odds (aka “American” odds or “U.S.” odds) are popular in the United States. The odds for favorites are accompanied by a minus (-) sign and indicate the amount you need to stake to win $100. The odds for underdogs, on the other hand, are accompanied by a positive (+) sign and indicate the amount won for every $100 staked.
This representation of odds takes a little getting used to but is widely popular in the United States.
Fractional Odds: A fractional listing of 6/1 (six-to-one) odds would mean that you would win $6 for every $1 you wager, in addition to receiving your dollar back (i.e., the amount you wagered).
Total Payout = (Stake x (Numerator/Denominator)) + Stake
where Numerator/Denominator is the Fractional odds.
Using odds to calculate probabilities
Betting odds can be used to calculate the probability of an event given. It is a sensible option to add to a user’s staking plan if the user feels that the probability of the event is higher than the probability represented by the odds for that event.
Probability = Stake/Potential Payout
For all the given types of odds described above, just calculate the amount you are staking and divide it with the overall potential payout to figure out the implied probability behind these odds.
How are odds generated?
In the old days of sports betting, odds were determined by a few authorities and the process that went into it wasn’t very methodical or justified.
Today, in the age of online sportsbooks, betting odds are generated by large bookmakers. These companies have massive amounts of historical data on the sports and players they make odds for and use this data to generate odds for every outcome. The main objective of the bookmaker is to engineer odds to attract equal action on both sides of a betting line and encourage more bets to be placed. Rather than being an accurate prediction of what the outcome might be, odds are more of a representation of what bettors want to bet on. Understanding this aspect is crucial for any beginner bettors.
Bettors on DexWin are encouraged to understand their risk and reward via the use of a staking plan. Simply put, a staking plan is a method that helps you determine how much money you should risk on a wager. As opposed to you just guessing that you’ll bet $20 on the Nets game this Sunday, a staking plan will apply some logic to how much you’ll wager.
Next, you might be asking yourself why you should consider using a staking plan. First and foremost, the best reason to use a plan is that it gives you a good method for helping with bankroll management. For many bettors, bankroll management is one of the largest struggles. Without a plan, it is very easy to squander your bankroll.
Another great reason to use a staking plan is that it can be used as a way for you to help manage risk. By using one of these plans, you can develop a risk versus reward tradeoff that fits your needs. Staking plans offer a great variety of options when it comes to risk. Those that prefer higher risk and reward can choose that as opposed to selecting a plan with lower risk and reward tradeoff.
On DexWin, you’ll find odds with industry least house cut, fully viewable and verifiable on the blockchain. This ensures that our odds are always fair to the user and aren’t manipulated on the fly.
DexWin also automatically displays odds in the most preferred representation depending upon the region that the user is from.
Our odds are fetched from industry-leading bookmakers with a minimal house cut and zero manipulation. We believe in providing a fair and fun experience to users.
We hope this article was helpful and gave you some insight into odds and how its knowledge can help you be a “better bettor”.
We look forward to having you bet on DexWin in the very near future!
DexWin, the most immersive and fair decentralized sports staking experience built on the blockchain to be seamless, transparent, and trustless.