Implied odds are the estimated probability of an event happening, based on the odds given by the bookmaker
What Are Implied Odds?
In sports betting, implied odds or “implied probability” refers to the likelihood of a particular outcome occurring, as implied by the odds offered by a betting site. The implied odds are expressed as a percentage.
It’s important to note that betting sites do not usually present odds as percentages. Nonetheless, it’s important for bettors to understand the relationship between odds and percentages (implied odds).
The implied odds can be calculated by the simple formula:
Implied odds = 1 / decimal odds
The Significance of Implied Odds
Bookmakers use probability to determine the odds they offer on a particular outcome.
For example, if a bookmaker calculates that a particular football team has a 50% chance of winning a game, they will base the odds around that probability. In this case, the fair decimal odds would be 2.0 (or even money), as the implied odds represent this chance: 1 / 2.0 = 50%. However, the bookmaker will factor in their margin, typically setting those odds at a lower value, such as 1.8, thereby gaining an advantage over the player.
If a bettor determines that the probability of an outcome is higher than the implied probability suggested by the odds offered, this would be a wise bet to place.
For example, if a team has a 60% chance of winning a game, and the bookmaker is offering odds of 1.8 on that team winning, the bettor may see value in placing a bet because the implied probability (55.6%) is lower than the bettor’s estimated probability (60%). This is essentially value betting.
Pros & Cons of Implied Odds
Here are pros and cons of using implied odds in betting:
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