In betting, The Way to calculate probability
Learning how to calculate indicated probability from betting odds is key to assessing the possible value in a gambling market.
Implied probability is a conversion of gambling odds into a percentage. It takes into account that the bookmaker margin to express the anticipated probability of an outcome happening.
Knowing how to convert gambling odds into implied probabilities is essential for betting as it can help you assess the possible value on a certain market. Once converted, if the suggested probability is less than your evaluation, then it reflects betting value.
The most usual odds formats are American and fractional. The formulas below explain how to convert odds to implied probabilities.
For the examples below we will use Smarkets odds for the 2016 Australian Open final between Andy Murray and Novak Djokovic:
Player Decimal odds Fractional chances odds Implied probability Djokovic 1.20 1/5 – 500 83.3% Murray 5.50 9/2 +450 18.1%
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