What is Implied Probability? | Implied Probability Formula Conversion

In order to teach you how to calculate implied probability in betting when playing at live bookies, we need to talk about different types of odds and give lots of examples: This is the only way to truly understand implied probability meaning. You can see these examples below with formulas. To learn more, we recommend checking our general sports betting guide and sports betting strategies article. 

First, let’s find out how to calculate implied probability from odds. There are three types of odds we can use, decimal, fractional, and moneyline (American). They all show how much you can win for betting a specific amount but they represent this differently and therefore, the calculations are different too. In order to learn more about odds, we recommend reading our make money with sports betting, betting odds explained, and the easiest sport to bet on guides.

Decimal odds are the most common when talking about fixed odds and they are used almost everywhere. These odds show how much the implied win probability is for betting 1 unit. For example, 2.00 odds mean that if you bet 10 EUR and win, the payout will be 20 EUR. 

Fractional odds are also known as “British” or “traditional” odds. They are written as a fraction, i.e. 4/1. The right digit shows your bet and the left digit shows the payout. So, in this example, if you bet 10 EUR, the payout will be 40 EUR. 

This is also known as “betting on the moneyline”. These are the American odds and they can be seen on the websites of US bookmakers. To convert implied probability to American odds, you determine whether there are positive or negative odds based on the likelihood of the event. Positive American odds reflect scenarios with lower implied probabilities, indicating how much you can win for every 100 USD wagered. Conversely, negative American odds correspond to higher implied probabilities, showing how much you need to bet to win 100 USD. For example: 

• +200 = If you wager 100 USD and win, the payout will be 200 USD
• -200: In order to win 100 USD, you must wager 200 USD.

Of course, we can also do the opposite for any sports and convert implied probability to odds. In this section, we will take a look at how to convert probability to odds. However, since you learned the basic concepts, we will just provide the formulas this time.

Lastly, remember that you can use an implied probability calculator instead of doing them manually.  If you are a beginner and just chose your bookmaker by payment methods (or not good with sports betting math), implied probability calculation may seem a little complex. More importantly, it can mislead you. Therefore, using an implied probability calculator will be the better choice. You can find them at the websites of the biggest betting companies and/or sites dedicated to this job. 

Or you could use this implied probability chart below:

So, if we make an implied probability vs probability comparison, what is the difference? Actually, the difference is simple:

As we explained in our other guides, the bookmaker can secure a profit no matter what the outcome is by offering you high payouts but also asking for high entry fees, aka bets. That’s why the how to beat the bookies tips may sometimes not work. Simply put, it asks you to pay 1.20 units to win 1.10 units, for example. By using the difference in between and using implied probability values to change the odds in its favor, the bookmaker always wins. If this sounds too complex, you should just remember this. Implied probability values never show the actual probability, they are the “bookmaker version” of the real values.

There is something called “value betting in sports”. It means finding the betting mistakes made by the bookmaker. For example, if your calculations reveal that the bookmaker’s implied probability odds are simply wrong, you can use this to your advantage. If it is under 100 you can definitely apply the dutch betting strategy. Let’s give a real example by using value football betting:

• The bookmaker offers 3.50 odds for Team A to win a particular match. This means the bookie thinks that Team A has a 28.57% chance to win that match – we explained how this is calculated above. 
• However, this is already higher than the actual probability and you may find out that Team A has actually a 32.50% chance to win that match. In other words, Team A is much more likely to win this match. 

This is called a “value bet”. It offers big payouts and higher winning chances. And by using the implied probability formula examples we listed above, you can easily find such bets.

We answered what is implied probability question and showed you implied probability formula examples for different types of odds. You are now ready for converting odds to probability or vice versa. Check our lists of the biggestbookmakers in UK or US betting sites and pick one. It is time to place your first bet. And since you learned the betting odds implied probability concept, you can easily find out the “value” bets now. We are sure that you will start winning in no time. Good luck out there!

Other articles you might enjoy:

• Can You Bet on Both Teams to Win?
• Cash Out Betting Explained
• Best Staking Plan for Low Odds
• Arbitrage Opportunities