How to Calculate Payouts on Odds: The Guide

The Key Terms, Basic & Details About How to Calculate Odds Payouts

Sports betting is quickly becoming the greatest draw in all of the entertainment sector— and the scariest part is that it is still expanding. Here’s another look about How to Calculate Odds Payout

Until 2018, no state other than Nevada was allowed to offer legal gambling services, that is, until a reversal of the decision opened the door to state legalization. Since then, states have quickly moved towards adopting gambling legislation, and more are expected to follow suit.

As the betting handle continues to set new records in America and throughout the world, many parties have become wrapped up in the exploding venture that is sports betting (information). With the surplus of betting options and gambling’s visibility, one of the most important but basic concepts to understand for new bettors is how to calculate payouts on odds; here is everything that there is to know.

Locating Betting Odds

Betting odds are the centerpiece of every sportsbook. To find a sportsbook, a quick search of the internet will help do the trick; each one is going to claim to offer something unique, so additional research before choosing a particular sportsbook to frequent is required.

The betting odds should be located at the front of the sportsbook’s page, separate from other areas reserved for news, promotions, and other miscellaneous information. It will look like a big graph of numbers, with options for sports or leagues either on the side or on the top as headings.

Sportsbooks usually provide the same odds, but there is room for some variability, especially during live betting sessions— this is an important consideration when determining which sportsbook is the right one for you.

Negative Odds

Betting lines with “negative odds” are simply odds that are preceded by a “-” sign. This could look like anything from -101 to -an infinite amount, but it will never drop lower than -101; the reason for this will be explained during the coming “Positive Odds” section.

Negative odds are usually reserved for favorites, whether that be an athlete, team, or outcome. The exception to this rule is if the two sides of the bet are identically or very nearly evenly matched.

For example, spread betting usually involves two outcomes with -110 odds, though this can vary in certain circumstances. You will rarely find a spread with positive odds, but it has happened before.

Calculating the value of a negative odd is simple; all that you will need to do is look at the number following the “-” sign. Whatever that number represents the amount of money that will need to be wagered to earn a $100 profit on the bet.

For example, if the New York Knicks have -130 odds of beating the Washington Wizards, that means that a $130 bet would yield a $100 profit for the bettor, who will also get their $130 investment back. So, in total, a successful $130 bet on -130 odds would equal a $230 payout.

“Good” and “Bad” Negative Odds

Experienced bettors will say that any bet with -200 odds or lower (that is, decreasing in value) is significantly less worthy of investment because of the risk-reward ratio. With that being said, lower odds are not terrible if they come true— money is money, after all.

Any odds worse than -300 should be very heavily considered before a wager is made, and bettors should be all but sure that their outcome is going to hit. Betting odds are designed to make it so that the more likely an outcome is to happen, the less valuable it is, which helps balance out the sportsbooks’ returns.

All negative odds between -101 and -199 are considered to have great value because bettors are getting a favorite but also not being asked to sacrifice too much in the “return” factor of the risk-reward ratio. 

The best “standard” way to make money with sportsbooks is locating a team that has a high chance of winning for low negative odds, which, again, boosts the payout without requiring a higher initial investment.

Positive Odds

Positive odds are the exact opposite of negative odds and are denoted by a “+” in front of the number, or betting line. Positive odds range anywhere from +100 to an infinite amount and are used to represent underdogs in every circumstance that there are only two outcomes, though a favorite can have positive odds in bets with three or more outcomes. 

The “+” represents a different method of calculation for the payout, which has similarities to negative odds but is still unique.

To calculate the payout of a positive odd, you will once again use the number provided; whatever that number is, a successful $100 bet will earn that much profit.

So, a +145 bet means that a $145 profit is given to bettors who correctly wager $100 on a particular event. This means that the bettor would receive a $245 total payout.

A bettor who places a $50 bet on the New York Jets (+250) to beat the Los Angeles Chargers would earn a $125 profit and $175 total payout; $125 profit because their $50 deposit was half of the $100 used to calculate the regular payout and because 125 is half of the listed odds of +250. The $175 payout comes from adding the $50 deposit to the $125 profit.

Any outcome with +100 odds is also an underdog in two-outcome bets but could also be a favorite in bets with three or more outcomes. Any bet with +100 odds simply translates to a dollar for a dollar, making it the easiest to calculate; whatever the bettor’s wager amount is is exactly how much their profit will be, meaning that successful +100 bets will always pay double the investment.

Hunting for Positive Odds

Finding bets with positive odds that are likely to happen is the mark of a great bettor; if you can set yourself up for success with a bet that you are confident in while keeping your risk low because of the increased reward, then you are doing the best job that you can.

One trick for finding positive odds is checking the betting lines right when they are released, which is usually the night before a particular match or event after the day has already finished up. This is a double-edged sword, however, as while some positive odds can be gained from waiting and seeing how the lines move, they can also be lost by letting other bettors throw money on them and the oddsmakers responding by moving the odds to the negative side.

Building Parlays

A parlay is a bet with multiple parts, known as “legs,” in which every part of the whole must come true for the bet to be paid out at all. It is a total all-or-nothing form of wager and pays no prize to second place.

If a bettor constructs a 15-leg parlay and correctly predicts 14 outcomes but misses one, the bet did not make any money and the deposit is not returned. Parlays can range from small to extremely large and depend on the bettor’s interests.

The beneficial part of parlays is that they change betting odds and increase payouts since all legs in the parlay must come true for it to be “hit,” or win. There are many different parlay calculators online, and sportsbooks will usually provide one when bets are being created and edited, but here is a sneaky formula for those who want to get it done the old-fashioned way.

Calculating Parlay Values

Let’s say that Jackson is creating a four-leg parlay with betting odds of -160, +130, -250, and -190.

First, we figure out what the multiplier is for each of the parlay’s legs; to do this, simply divide the total payout by the risk amount.

In our example, that would mean that we first take a $260 payout (or $160 required to make $100) and divide it by the risk of 160. This gives us a multiplier of 1.63.

Next, we have +130, which would mean that we divide 230 and because there is only $100 required to earn a $230 payout, divide it by 100, leading to a multiplier of 2.3.

For the next two numbers, we end up with multipliers of 1.4 and 1.53, finishing up our list.

To calculate the total value of a parlay, you will multiply all of these numbers together; in our case, we are multiplying 1.63, 2.3, 1.4, and 1.53, which equals 8.03. This means that there is a value of $8.03 on our payout, or $7.03 on the profit, subtracting $1.00 for the initial investment. 

Essentially, this four-leg parlay would be somewhere around +703 in betting odds and would equal an $803 payout for a $100 bet.

Building a Parlay

Some people love making two or three-leg parlays on heavy favorites so that they can create better odds and keep a low-risk approach while still finding ways to improve their payouts. This method is best for gamblers who have a high success rate and also have larger amounts of money that they are willing to invest.

If you are confident in your selections but do not have tons of money to wager, use this parlay as a fail-safe for your other bets to ensure that you are breaking even, if not earning a profit.

The other extreme of this is thrill-seeking bettors who are looking mostly to have fun with the potential of ending up on the front page of a newspaper one day. These bettors look to construct outlandish multi-leg parlays with ridiculous odds that could turn a single dollar into a fortune; these do not hit very often, but it is fun to join in on the action every once in a while.

Knowing How Much Money to Invest

The number-one rule in gambling is to not bet money that you cannot afford to lose. All other rules are secondary to this guiding principle.

If you have a few bets coming up on a particular day, week, or month, the smartest way to approach them is to construct a sort of failsafe that will allow you to break even if one or multiple of your bets miss. This can be accomplished with different strategies, ones that can be formulated over time with experience or guidance from other bettors.

Many of the best bettors in the world rarely put any money on the line and opt to wait for games or events that they are extremely confident in. Although this takes lots of patience and is not what most newer bettors want to hear, it is the best advice for those who have enough money to take larger risks once every so often.

Think of it as simply controlling the madness; you are limiting your risk by reducing the number of chances to lose money and, theoretically, improving your chances of winning by waiting until you are sure of a particular outcome. 

Another way to stay ahead with your money is to set up an accountability system in which a predetermined portion of all successful bets will be sent to a separate bank account that cannot be touched again. That way, a bettor can never lose all of the money that they have won from going on a cold streak.

Betting Odds Concluded

Calculating betting odds is very simple to understand. Betting odds will be arranged in a spreadsheet or grid arranged by headings and subheadings pertaining to different sports or events.

All odds with a “-” in front of them are negative odds and usually signal favorites in bets; all negative odds need an investment equal to the given number to profit $100. The total payout is calculated by adding the investment to the profit.

All odds with a “+” at the front are positive odds and always signify underdogs unless there are three or more outcomes. Positive odds only need a $100 deposit to profit the given number and are more attractive for bettors because of the reduced risk needed to generate a hefty payout.

Parlays are all-or-nothing bets with multiple parts to them, all of which must come true for the bet to win. Parlay payouts can be calculated with a formula that multiplies all of the bet multipliers together. Want to learn more about How to Calculate Odds Payout? Follow us on Twitter