Can someone explain how betting odds work?

Question

I'm looking at x-factor, and one act has odds of 4/1 to win, and one has 40/1 to win, and I have no idea what that means!

Answer 1

It is all based on what is called Over-Round which is basically the bookie's profit. This is why prices are changing constantly.

If a lot of money is put on a certain outcome, it becomes "the favourite" and the price is shortened (i.e. made smaller) and that of the others are pushed out (i.e. made bigger). This is a very complex mathematical formula which basically works out that no matter which "horse" wins, the bookie will pay out £100, but have taken in £110 in bets. That's the theory anyway, but in practice a sudden large bet can completely wreck their formula and that is when they get hammered. In general, they are very happy when the favourite loses and here is why - using your example prices...

Singer A is 4/1 - so for every £1 you bet, you receive £4 back.
Singer B is 40/1 so for every £1 you bet, you receive £40 back.

That looks like the bookie would prefer Singer A to win doesn't it? But the sting comes because you also get your initial stake back!

Sooo.... To win £100

On Singer A you need to bet £25, but on Singer B, you only need to bet £2.50. Now, if Singer B wins, the bookie pays out his £100 that is his expected payout and only has to give you £2.50 back out of the £25 which he has taken on Singer A. A profit to him of £22.50

If Singer A wins though, he has to pay out £100, but also return a stake of £25, but has only collected £2.50 to cover that.

Obviously, in this example, you have to assume that the £100 has been collected from "unseen" bets as in a 2 horse race, odds would never be so high.

Hope that explains it clearly and hope I have not given you massive overload of detail!

Answer 2

1

Answer 3

2

Answer 4

DaveX is correct.

To simplify matters...

2/1 - you place a £10 bet and you get £30 back, winning £20.

4/1 - you place a £10 bet and you get £50 back, winning £40.

50/1 - you place a £10 bet and you get £510 back, winning £500.

For info, Leona looks like the most likely winner and that bloke who sings as if he's in a heavy metal band all the time is surely a false favourite - I can't for the life of me see why he's favourite!

You'll find some interesting stuff on the way things are going in the world of betting on this site too...

http://www.bettingbots.com

Now you can effectively be your own bookie from home :-)

Answer 5

Odds Explained

Answer 6

How Do Betting Odds Work

Answer 7

Sports Betting Picks - Winning Picks

Answer 8

Number to the left is the number of units you'll get paid if you win and number to the right is the unit of your bet....so

4/1 = 4 to 1 odds = you'll be paid $4 for every $1 wagered

40/1 = 40 to 1 odds = you'll be paid $40 for every $1 wagered

Answer 9

What happens is, bookies make a "nbook" which means they lay every runner to lose £100, for every approf £115 they take if every runner was backed in equal proportions. They would then keep the extra £15 as profit no matter who won. That is the theory, but some runners do not get backed in equal proportion so as to imbalance the books. There fore they give some of the excess away to other bookies in order to gain a profit.
Hope that makes sense and helps you.
Normally the smaller the number on the left the larger chance of a selection winning in theory.

Answer 10

the number on the right of the fraction is what we call the "ideal stake". the number on the left of the fraction is the "winnings" in relation to the "ideal stake". If the price is 2/1 and you put £1 on it you will win £2 and get your £1 stake back, this adds up to £3, this is called your "returns". it's easy to work things out at prices like 4/1 and 40/1 but if you've got £53.14 on a 8/13 shot things get more complecated. the best way to do this is to divide your actual stake by your ideal stake;

53.14 / 13 = 4.09

then multipy that figure by the ideal stake added to the winnings number:

(8+13 = 21)

21 * 4.09 = £85.89.

basicaly the closer the price is to "even money" (1/1), the more chance your selection has of winning. so 4/1 has a higher likelyhood of winning than the 40/1. as more people get eliminated the prices will change to include the revised chances. so get your bet on now.