How To Calculate Implied Probability

Odds are only a representation of something more important

• How To Calculate Probability Distribution
• How To Calculate Implied Probability Of Rate Hike
• What Is Implied Probability
• How To Calculate Implied Probability Calculator
• How To Calculate Implied Probability Of Default From Cds

Calculating the Implied Probability of betting odds is easy. Simply enter the odds into the Implied Probability Calculator on this page and then hit the “Convert” button. The Implied Probability of the odds will then be displayed in the “Probability” box.

Odds are only a representation of something more important probability. Getting a handle on how to derive decimal odds from probability is the first step in developing your own assessments of sports betting value.

1. An implied fed funds rate of 5.155% (100 – 94.845). Applying Equation 1 indicates a 62 percent probability of a rate increase.62 5.25 5.0 5. 155 5.0 = − − There is a problem in this calculation because the implied fed funds rate used in the numerator in.
2. Money Line Calculator (Implied Probability) Money Line: Implied Probability: RESET. The following chart shows how likely a team is to win based off the odds. This is helpful in handicapping because you can see just what percentage of your wagers you need to win at each given money line in order to profit.

What do odds represent?

There is a conversation that all seasoned bettors will have had numerous times with friends and relatives who want a casual punt on a major sporting event. “What are the odds on x; what do they mean? what will I win if I bet x amount?”

Understanding probability

Understanding odds is the biggest challenge that anyone new to betting faces. What do odds actually represent and how can you simply understand what return you might get for a given stake? Once you get past that hurdle, it is liberating to start comparing odds between bookmakers, but to consider sports betting to be just about odds is to miss the bigger picture. To really expand your understanding of odds and betting you need to understand probability.

Sports Betting is about assessing the chance or probability of an event happening and bookmakers like Pinnacle use odds to translate probability into a more usable form in order to offer betting. The fact that there are many different odds formats – decimal, fractional, money line – illustrates the point that odds are simply a means to an end i.e. offering betting. Bookmakers really deal in risk measured by probability.

Considering how we are faced with risk every single day of our lives – what are the chances of me making that train on time? how likely is it to rain? – it is surprising how unfamiliar the average person is with basic probability. It is a scale running from 0 – where there is no chance of an event occurring – to 1 – a certain future event – with the likelihood of all other potential events falling somewhere in between those points on the probability spectrum.

This article is an expansion of one our helpful videos, which shows how to calculate odds, probability and payouts in just two minutes.

A coin-toss is a great way can to explain how to calculate probability. The coin will definitely land on either Heads or Tails, which taken together provide us with the certain event, which we now know has a probability of 1.

Of course as a bettor what you really want to know is the probability (or chance) of your chosen call, which we will say is Heads. To do this there is a simple equation:

Probability = favourable outcomes / all possible outcomes

A favourable outcome is essentially one that you want to happen because you are going to gain. For your coin toss that is your call – Heads – which you divide by the two possible outcomes – Heads or Tails – to produce a probability of 0.5.

1 (Heads) / 2 (Heads or Tails) = 0.5

In general people are more comfortable with percentages, so by simply multiplying the probability of your event (0.5 for Heads) by 100 you can say that there is a 50% chance of the coin landing on Heads, and you winning your bet.

Now you know how to calculate probability, you can turn this into the form of odds. Decimal odds are the default format used by bookmakers like Pinnacle, and you can arrive at the Decimal odds value for your coin toss choice with the simple equation:

Decimal odds = 1 / probability for your chosen outcome

So the Decimal odds for a coin being Heads is 1 (Certainty) divided by the probability of it occurring which we know is 0.5, producing decimal odds of 2.0. At this point you can equally take odds and reverse engineer the implied probability with the inverse of the equation for turning probability into odds:

1/decimal odds = probability

Moving from implied probability to value

In a short space of time we are getting into interesting territory. Take your newly found knowledge and work out the implied probability for your coin toss with your friend and you’ll see the aggregate implied probability of both outcomes in the coin toss is 100% – (0.5/1+0.5/1)*100 – no surprises as a certain event is 1 (100/100).

However, performing the same calculation for actual odds from your favourite bookmaker will produce a value greater than 100%. So what is happening here? In simple terms the odds don’t reflect the true likelihood – the probability – of the outcomes concerned. The amount by which the implied probability diverges from 100% is the edge your bookmaker holds for that market, and essentially measures the value they are providing. This is an essential piece of information for a value seeking bettor, is easy to calculate but few if any bookmakers publicly share it – other than Pinnacle. It is worth asking yourself why that is?

Calculating odds and probability opens up a whole new world for calculating value but you also want to know what your bet will payout for a bet. For our coin toss example this requires a simple multiplication:

Payout = Your stake X decimal odds

So if you bet $10 on Heads with odds of 2.0 your return including stake is 2.0 x $10 which equals $20 (This includes your $10 stake + $10 profit).

Understanding where odds actually come from is an essential part of evolving as a bettor because it enables you to calculate your own expected frequency for an event – starting to model your own odds – and then compare what you think will happen with what odds are available. Where the two diverge you can potentially turn that edge in your favour, and generate profit, which is whatever bettor should be focused on.

Moneyline wagers represent the most straightforward way to bet on sports. A moneyline bet tasks the bettor with simply choosing the winner of a game, with no point spread involved.

How To Calculate Probability Distribution

All moneyline odds can be converted into implied probability, breaking down each team’s chances of winning as implied by the sportsbook’s moneyline on the game.

Converting moneyline odds into implied probability takes a bit of algebraic work. The Gaming Today Implied Probability Calculator takes that work out of the equation, however, instantly converting any moneyline number into an implied probability of winning.

Implied Probability

Enter the American odds in the space provided and hit calculate to get the percent value. Note that you must place the “-” in front of favorite moneyline odds to get the proper implied probability.

What Is A Moneyline Bet?

A moneyline bet functions as a straight-up wager on which team will win a game. This kind of bet doesn’t involve a point spread.

The underdog on the moneyline pays out at greater odds than the favorite. Sportsbooks generally display the moneyline, point spread, and totals odds on a game, but all three function as separate bets.

Here’s a look at how DraftKings Sportsbook presented the lines on Super Bowl LV a few days before the game:

DraftKings Sportsbook Super Bowl LV Lines

US sportsbooks generally display American odds, with potential payouts denoted by the “+” or “-“ in front of the odds. The “+” indicates the underdog on the moneyline, while the “-“ denotes the favorite.

DraftKings sets Tampa Bay as the Super Bowl LV underdog, with the Buccaneers paying out at (+140) moneyline odds. The sportsbook puts favored Kansas City at (-162) on the moneyline.

Note that the point spread and totals columns for the Super Bowl also display an American Odds payout. Moneyline bets don’t involve any kind of point spread, however, and only concerns the straight-up winner of the game.

Finding Value In A Moneyline Bet

Using an implied probability calculator, you can convert the moneyline odds into an implied chance of winning for each team.

In this case, the (-162) moneyline on the Chiefs implies that Kansas City has a 61.83% chance of winning. Tampa Bay’s (+140) odds convert to a 41.67% chance of winning.

Astute bettors look for value in moneyline bets, and that assessment requires converting the odds into implied probability. If you think the Buccaneers have better than a 41.67% chance of winning, for instance, the Tampa Bay (+140) line presents value.

What Is An Implied Probability Calculator?

You can plug in and moneyline odds into the Gaming Today Implied Probability Calculator and convert those odds into implied probability. Other sports betting odds calculators include tools that allow you to calculate moneyline odds or the house edge by inputting the sportsbook’s offered moneyline odds.

Our implied probability calculator works the same way. Simply input the moneyline odds on either side of a bet, and the Gaming Today Implied Probability Calculator gives you an instant calculation of that team’s implied probability.

For “+” moneyline odds, simply input the number without the “+” sign. So for the Buccaneers (+140) odds, for instance, just type “140” into the “American Odds” field in the calculator.

After inputting “140” and clicking “Calculate” we see that Tampa Bay’s implied winning probability is 41.67%.

For “-“ moneyline odds, be sure to include the “-“ sign in front of the inputted number. Calculating Kansas City’s (-162) moneyline odds yields a 61.83% implied winning probability for the Chiefs.

Using An Implied Probability Calculator To Place A Sports Bet

This Implied Probability Calculator converts American odds into implied probability. This calculation converts the odds into a form that is easier to quantify: percent likelihood of the event occurring. This type of calculator includes the sportsbook’s margin, which means the combined probabilities don’t add up to exactly 100%.

How The Implied Probability Calculator Works

Implied probability is most useful when determining the sportsbook’s edge over the bettor. It is important to note: this is not the margin/vig/juice. This is simply the advantage they have in being profitable over the bettor. Though it will never tell you which team to select, determining the percent implied probability over 100% will point out lines where the book’s advantage is lower. In being a successful sports bettor every percentage point counts, and each point the book gives back is one more win toward profitability for the bettor.

Implied Probability Calculation For Negative American Odds

Calculating implied probability is a little more complex for American odds. Let’s take the classic coin flipping example where we know the actual probability is 50%: a -110 bet on Heads. Once again, the calculation is slightly different for minus odds versus plus odds.

Implied Probability = (-1*(Odds)) / (-1(Odds) + 100)

Which looks like:

Implied Probability = (-1*(-110)) / (-1(-110) + 100)

or:

52.4% or 0.524 = 110 / 210

That number should be familiar to experienced bettors as the break-even winning percentage bettors shoot for. Because -110 on one side of a bet usually means -110 on the other side too, we can add all the probabilities (in this case another -110 probability) to determine the sportsbook’s edge.

(Heads Probability + Tails Probability) – 1 = Sportsbook’s Edge
or:

(0.524 + 0.524) – 1 = 0.048 or 4.8%

Ideally you should be looking for bets with the lowest sportsbook edge you can. It is a subtle edge in sports betting, but remember the difference between winning at 52% and 53% is a world of difference.

Implied Probability Calculation For Positive American Odds

Let’s work a positive odds example. We’ll use the following moneyline bet where the favorite is -190 and the underdog is +160. First we break down the implied probability on +160 odds :

Implied Probability = 100 / (Odds + 100)

or:

38.4% or 0.384 = 100 / (160 + 100)

To get the other outcome, we calculate the -190 odds:

65.5% or 0.655 = (-1(-190)) / (-1(-190) + 100)

In the above example we see that the sportsbook’s advantage is:

(0.384 + 0.655) – 1 = 3.9%

What this tells us is that with no other information a bet on the -190/+160 is more likely to be successful over the long term than the -110/-110 example.

What Is Line Movement?

Sportsbooks install moneyline odds on each game that gives the house a slight edge over the player in the long run.

In the Super Bowl example above, for instance, the implied probabilities for the Buccaneers and Chiefs add up to more than 100%. This happens because the sportsbooks offer this bet with the built-in house edge.

The sportsbooks aim to get enough bets on both sides of the Super Bowl to allow the house to make money no matter what. If the public puts heavy betting interest on one team, the sportsbook will start to shift the line the other way, with the goal of producing more wagers on the other team.

Legal Online Sports Betting In The US

More than a dozen US states currently offer legal online sports betting. Virginia and Michigan became the latest states to launch mobile sports wagering, with both states doing so in January 2021.

Several notable brands compete for market share in states like New Jersey, Pennsylvania, and Michigan. These states represent some of the top online sports betting markets in the US.

States That Offer Legal Online Sports Betting

• Nevada
• West Virginia
• New Hampshire
• Oregon
• Rhode Island
• Montana
• Washington DC

Top US Online Sportsbooks

FanDuel Sportsbook

FanDuel Sportsbook takes the No. 1 spot as the biggest online sportsbook by market share in the US. The platform offers a robust selection of sports, betting types, and deposit/cashout options.

Ten states currently enjoy access to the FanDuel Sportsbook platform. Those jurisdictions include New Jersey, Pennsylvania, Illinois, Indiana, Iowa, Colorado, West Virginia, Michigan, Tennessee, and Virginia.

DraftKings Sportsbook

DraftKings and FanDuel battle for mobile sports betting supremacy in several states. DraftKings Sportsbook offers one of the most comprehensive online sports betting platforms in the legal US industry.

How To Calculate Implied Probability Of Rate Hike

Eleven different states can bet online at DraftKings Sportsbook. That list includes New Jersey, Pennsylvania, Illinois, Indiana, Iowa, Colorado, West Virginia, Michigan, Tennessee, Virginia, and New Hampshire.

BetRivers Sportsbook

Known in the sports betting industry for its player-friendly welcome bonuses and creative prop bets, BetRivers has emerged as one of the top online sportsbooks in the US in just a short time.

What Is Implied Probability

BetRivers takes online sports bets in New Jersey, Pennsylvania, Illinois, Indiana, Iowa, Colorado, Michigan, and Virginia.

Implied Probability Calculator FAQ

Is online sports betting legal in the US?

Yes. Federal laws permit states to choose to allow sports betting, both retail and online.

More than a dozen states offer legal online sports betting, and several more will likely join that list in the coming months.

When should I use an implied probability calculator?

Anytime you make a moneyline bet! Finding value on the moneyline requires that you convert the odds into an implied probability.

Once you have the implied probability for each team, you can then decide whether either team has a better chance of winning than the implied probability.

Is it legal to use an implied probability calculator?

Yes. Sharp bettors use tools like the Gaming Today Implied Probability Calculator for every wager they make.

How To Calculate Implied Probability Calculator

Understanding how implied probability works related to moneyline odds is crucial to a winning betting strategy.

Who sets the odds at online sportsbooks?

Each sportsbook employs bookmakers, tasked with setting the odds on each game. After setting a line, the sportsbook will shift the odds one way or the other if the public is heavily favoring one side of the bet.

How do I convert American odds to fractional odds?

To convert “+” American odds into fractional odds, you must divide the odds by 100 and convert to a fraction. To convert +160 into fractional odds, for instance, divide 160 by 100 (160/100) and reduce that fraction to 8/5. American odds of +160 translates to 8/5 fractional odds.

To convert “-” American odds, divide 100 by the odds and convert to a fraction. As an example, for -160 odds, calculate as 100/160, and reduce to 5/8 fractional odds.

What is the best online sportsbook in the US?

The US legal online sports betting industry involves several high-quality platforms competing for wagering dollars.

Some of the top brands in the US include DraftKings Sportsbook, FanDuel Sportsbook, BetRivers, BetMGM, and William Hill.

Yes. Federal laws permit states to choose to allow sports betting, both retail and online.

More than a dozen states offer legal online sports betting, and several more will likely join that list in the coming months.

Anytime you make a moneyline bet! Finding value on the moneyline requires that you convert the odds into an implied probability.

Once you have the implied probability for each team, you can then decide whether either team has a better chance of winning than the implied probability.

Yes. Sharp bettors use tools like the Gaming Today Implied Probability Calculator for every wager they make.

Understanding how implied probability works related to moneyline odds is crucial to a winning betting strategy.

How To Calculate Implied Probability Of Default From Cds

Each sportsbook employs bookmakers, tasked with setting the odds on each game. After setting a line, the sportsbook will shift the odds one way or the other if the public is heavily favoring one side of the bet.

To convert “+” American odds into fractional odds, you must divide the odds by 100 and convert to a fraction. To convert +160 into fractional odds, for instance, divide 160 by 100 (160/100) and reduce that fraction to 8/5. American odds of +160 translates to 8/5 fractional odds.

To convert “-” American odds, divide 100 by the odds and convert to a fraction. As an example, for -160 odds, calculate as 100/160, and reduce to 5/8 fractional odds.

The US legal online sports betting industry involves several high-quality platforms competing for wagering dollars.

Some of the top brands in the US include DraftKings Sportsbook, FanDuel Sportsbook, BetRivers, BetMGM, and William Hill.