If you visit a sportsbook, you will often see the chances of certain outcomes expressed in odds format. Both odds and probability are ways of quantifying and expressing information about uncertainty, and you can convert between the two with a few simple equations.
When reading odds, most people interpret them intuitively without much focus on accuracy. They see something has odds of 2.40 and understand that this counts as a “maybe,” then they look at something with odds of 1.35 and recognize it as “very likely.” This isn’t bad, but it can be improved, and one of the best ways to do this is to convert the odds into a measure of probability expressed as a percentage. This makes it easier to compare the number with other probabilities and adjust it if anything changes.
Before we get into this, it’s worth covering a quick pitfall that confuses some people, especially when dealing with odds that come from a gambling context. Most people know that the sum of all probabilities for a given outcome should add up to 100%, so it worries them when they convert the odds they found on a gambling site and realize that the total adds up to more than 100%.
If you find this happening, it doesn’t mean that you are doing the math wrong. Sportsbooks and other betting platforms include a built-in margin that results in the odds adding up this way when converted to a percentage. In addition to showing you how to convert between odds and probability, this article will also cover how to adjust the numbers to remove this margin.
The Inversion That Turns Odds Into Percentages
With decimal odds, implied probability is simply the reciprocal of the odds: 1 ÷ odds. If you want that expressed as a percentage, multiply it by 100, and you’re done. The fastest way to make this stick is to practise on actual odds. To see some real-world examples, you might want to check out a sportsbook website. Sportaza is a Canadian-facing sportsbook and online casino, and its Sports and Live Betting sections give you real, continuously updated prices you can use for practicing this skill.
Start with a market that clearly shows decimal odds and convert each outcome into an implied probability, then add the implied probabilities together. If the total comes out above 100%, the gap is the built-in margin.
As an example, if the chance of a team winning a match is 1.83 and the chance that they don’t win is 2.05, then you would calculate the odds by doing 1 ÷ 1.83 = 54.64% and 1 ÷ 2.05 = 48.78%. These numbers add up to 103.42%. Keep practicing this on different games until the process starts to feel easy. Sportaza constantly updates its odds, providing you with plenty of new fodder for practicing on.
If you want a compact reference you can keep open while you run those reps, this short explainer includes a quick example of converting decimal odds and removing margin.
Margin And The 100% Test
Implied probability is what the quoted odds suggest, but if you want a more accurate representation, it can help to remove the margin so the outcomes add up to 100% again. This figure is useful because it gives a clearer idea of how likely the platform actually believes a certain event to be. Sadly, you can’t just halve the margin and subtract that from both figures. The math required is a little more complex than that.
To remove the margin from a set of odds, start by converting each value into implied probability format. Add them up, and check that the value exceeds 100% (if it’s exactly 100% then nothing else needs doing and you can stop here). Next, divide each implied probability by the total they add up to. This step normalizes the set, so the outcomes will sum to 100%.
A simple example makes it concrete. If the site lists two outcomes and both are listed as having odds of 1.91, each outcome converts to 1 ÷ 1.91 = 0.5236, or 52.36%. Add these together, and you get 104.72%. To normalize, divide both values by 1.0472. 0.5236 divided by 1.0472 gives 0.50. This is to be expected as the odds were even from the start, but stating that the odds are 50% versus 50%, not 52.36% versus 52.36% offers a far more intuitive picture for many people.
It also helps to look at an example where the odds aren’t equal at the start. Suppose the site lists the odds as 1.66 and 2.00. In this case, these convert to approximately 60% and 50% respectively, and the sum of these is 110%. If we then divide both sides by 110%, we see that the actual probabilities are closer to 55% and 45%. This gives you a far clearer idea of how likely the platform actually considers these outcomes to be.