Betting Odds: Calculating Average Payouts
Betting odds and payouts can differ depending on the sport or event. Some bookies tend to offer better payouts than others. But how do we figure this out and why is it important?
A small difference in odds can dramatically change a punter’s payout in the long run. So even though differences may seem small, they can add up, especially if you are a big hitter. It’s important to understand how each bookie calculates their margins and to realise that the higher the margin – the higher the house edge and the lower a punter is paid out.
Now we would like to demonstrate exactly how online betting sites offer their odds. The first step is to understand how probabilities work, and apply this to what each bookie offers on their site. Using the first image, you can see how you can use a simple formula to calculate. Then you can apply it to real life.
This equation can be used on any sport or market. Whether the betting site is offering football, tennis, or basketball, you can apply it to your preferred match or event. There may be some small differences when calculating a football match or a tennis match – as in football there are three outcomes available and in tennis just two. Now, let’s show you what we are talking about. We have taken an example match from the Premier League – Manchester City against Liverpool.
Manchester City (1) are favoured to win at 23/20, a draw (X) is long odds at 11/4, whilst Liverpool (2) are seen to be at 2/1. The odds offered are simply representations of – in fractional terms – what the operators expects the outcome to be. In order to find the payout they are offering, you first need to calculate the margin (the formula we first mentioned).
In this scenario the betting site has given Manchester City a 46.51% chance to win, a draw is 26.66%, and a Liverpool win is 33.33%. Now if we add these three sums together, we will get the margin. So, 46.51% + 26.67% + 33.33% = 106.51%. Once we know this number it is very easy to calculate the payout.
The payout is simply the percentage of money of the total wagers the bookie will payout once all wagers have been taken. This is calculated as follows (100/margin)*100. In this example case, it works out as follows: (100/106.51)* 100 = 93.88%. To see the profit margin of a bookie, simple subtract this sum from 100. Here, it is 100 – 93.88 = 6.12%. Therefore, the betting site will have a profit margin of 6.12% in this scenario.
The Difference in Payouts
After all this discussion of payouts, you may be thinking, what does it matter? Well, let us tell you it really can impact your payroll. Depending on the number of bets you place, it can seriously impact your returns in the long run. In the table below, you can see an example of how odds offered – that look seemingly similar – actually impact the payout of your bet. This is using a £10 bet as an example. We have shown, how payout percentages affect things. Imagine one bookie is giving 97%, another 95% and so on.
| Odds of the 1X2 market based on their payout | |||
|---|---|---|---|
| Payout | 1 | X | 2 |
| 97% | 1.87 | 3.55 | 4.70 |
| 95% | 1.85 | 3.40 | 4.60 |
| 93% | 1.80 | 3.35 | 4.55 |
| 91% | 1.75 | 3.30 | 4.50 |
| 89% | 1.70 | 3.25 | 4.40 |
| Potential difference in winnings with a £10 bet | |||
|---|---|---|---|
| Payout | 1 | X | 2 |
| 97% | £9.70 | £25.50 | £37.00 |
| 95% | £8.50 | £24.00 | £36.00 |
| 93% | £8.00 | £23.50 | £35.50 |
| 91% | £7.50 | £23.00 | £33.00 |
| 89% | £7.00 | £22.50 | £32.50 |
By looking in the second part of the table, you can really visualise the difference in what a payout can do for you. Even with such a simple £10 bet, you already see difference across the board. It usually surprises the casual bettor when seeing this, and that is why we implore you to use betting sites with top payouts. Imagine what the difference will be like with larger sums!
