Implied Probability In Sports Betting
Implied probability is a key concept in sports betting that converts betting odds into a percentage-based likelihood of an outcome occurring. It represents how sportsbooks estimate the probability of an event based on the odds they set. For bettors, understanding implied probability is crucial for identifying value bets and making more strategic wagering decisions.
If the implied probability is lower than your own estimate of the actual chance, there may be value in the bet. Conversely, if the implied probability is higher than what you expect, the bet may not be worth taking.
How to Calculate Implied Probability from Betting Odds
Understanding how to calculate implied probability is essential for bettors looking to evaluate odds, find value, and make informed decisions. Each format requires a different formula to convert the odds into implied probability. Different sportsbooks set different odds, leading to different implied probabilities for the same event.
This section provides a step-by-step breakdown of how to calculate implied probability for the three main types of betting odds:
Implied Probability for Decimal Odds
Decimal odds provide a direct way to interpret implied probability, as they reflect the total payout per unit wagered. The lower the decimal odds, the higher the implied probability, meaning the event is considered more likely to occur. Conversely, higher decimal odds indicate a lower implied probability, meaning the outcome is less likely according to the sportsbook.
How to Calculate?
Implied Probability = (1 / Decimal Odds) × 100
Example 1: Decimal Odds of 1.50 (a strong favorite)
- (1 / 1.50) x 100 = 66.67%
This means the sportsbook estimates a 66.67% chance of this outcome occurring.
Example 2: Decimal Odds of 3.00 (a moderate underdog)
- (1 / 3.00) x 100 = 33.33%
Here, the sportsbook suggests a 33.33% chance of this outcome happening.
Key Takeaways
- Lower decimal odds = Higher implied probability (outcome is more likely).
- Higher decimal odds = Lower implied probability (outcome is less likely).
- Decimal odds make it easy to quickly assess probability without complex calculations.
Implied Probability for Fractional Odds
Fractional odds express the ratio of potential profit to the stake, but this also gives insight into the event’s likelihood. The larger the fraction, the lower the implied probability, meaning sportsbooks consider the event less likely to occur. Conversely, smaller fractions indicate a higher implied probability and suggest a more favored outcome.
How to Calculate?
Implied Probability = (Denominator / [Numerator + Denominator]) × 100
Example 1: Fractional Odds of 5/2
- (2 / 5 + 2) x 100 = 28.57%
This means the sportsbook believes the event has a 28.57% chance of happening.
Example 2: Fractional Odds of 1/4
- (4 / 1 + 4) x 100 = 80%
A 1/4 favorite has an 80% implied probability, meaning it’s a strong favorite.
Key Takeaways
- Smaller fractions (e.g., 1/4) = Higher implied probability (event is likely).
- Larger fractions (e.g., 10/1) = Lower implied probability (event is unlikely).
- Fractional odds can sometimes make implied probability harder to interpret at a glance.
Implied Probability for American Odds
American odds differ from decimal and fractional odds because they are divided into negative odds (favorites) and positive odds (underdogs). The larger the negative number, the higher the implied probability. The larger the positive number, the lower the implied probability.
For Negative Odds (Favorites)
Implied Probability = (Negative Odds / [Negative Odds + 100]) x 100
Example: American Odds of -450
- (450 / [450 + 100]) x 100 = 81.82%
A -450 favorite has an 81.82% chance of winning, making them a strong favorite.
For Positive Odds (Underdogs)
Implied Probability = (100 / [Positive Odds + 100]) x 100
Example: American Odds of +250
- (100 / [250 + 100]) x 100 = 28.57%
The sportsbook believes this underdog has a 28.57% chance of winning.
Key Takeaways
- Negative odds indicate higher implied probability (favorites).
- Positive odds indicate lower implied probability (underdogs).
- Larger negative odds (e.g., -500) = Higher probability, smaller negative odds (e.g., -110) = Lower probability.
- Larger positive odds (e.g., +400) = Lower probability, smaller positive odds (e.g., +120) = Higher probability.
Adjusting for Bookmaker Margins (Vig) to Find “True” Probabilities
Bookmakers do not offer “fair” odds—they build in a profit margin (vig or juice) to ensure they make money regardless of the bet outcome. This margin inflates implied probabilities, making events seem more likely than they truly are. The sum of implied probabilities across all outcomes in a market is always greater than 100% because of the bookmaker’s vig. Removing the vig helps find the “true” probability of an event—this is crucial for identifying value bets.
How to Remove the Vig?
The Proportional Method (Fair Odds Calculation)
This is the most commonly used vig removal formula:
True Probability = (Implied Probability / Total Implied Probability) x 100
Example:
- A bookmaker offers odds of -150 (implied probability = 60%) and +130 (implied probability = 43.48%).
- Total Implied Probability = 60% + 43.48% = 103.48% (indicating a 3.48% vig).
- Devigging:
True Probability for -150 = (60 / 103.48) x 100 = 58.01%
True Probability for +130 = (43.48 / 103.48) x 100 = 41.99%
Final Result: The “true” probabilities are 58.01% and 41.99% instead of 60% and 43.48%, meaning the bookmaker’s margin artificially inflates implied probabilities.
Tools for Calculating Implied Probability
While understanding the math behind implied probability is crucial, manually calculating it for every bet can be time-consuming and error-prone. This is where online tools and calculators become invaluable. These tools instantly convert odds into implied probability, helping bettors quickly assess bet value, identify mispriced lines, and make data-driven decisions.
Method #1Online Implied Probability Calculators
Implied probability calculators are digital tools that allow bettors to instantly convert odds (Decimal, Fractional, and American) into probability percentages. Instead of manually applying formulas, users can enter the odds format of their choice, and the tool will return the implied probability within seconds.
Most Widely Used Implied Probability Calculators:
- OddsPortal – Provides instant conversions between different odds formats.
- Action Network – User-friendly interface for quick probability assessments.
- Odds Converter by Pinnacle – Offers devigging features to adjust for bookmaker margins.
- BettingOdds.com Calculator – Supports multiple betting formats and conversions.
Method #2Advanced Betting Tools That Use Implied Probability
While standalone implied probability calculators are useful, more advanced tools integrate implied probability into larger betting strategies. These tools help bettors go beyond basic probability conversion and analyze odds in real time.
Betting Exchanges (Betfair, Smarkets, Matchbook):
- Show real market odds, which often have less bookmaker margin than traditional sportsbooks.
- Allow bettors to compare sportsbook implied probability vs. exchange market probability to identify value bets.
- Provide real-time line movement tracking, revealing when public betting is distorting odds.
Method #3Expected Value (EV) Calculators
EV calculator helps determine whether a bet has positive expected value (+EV), meaning it’s profitable over time, or negative expected value (-EV), meaning it’s a losing bet in the long run.
What They Do:
- Allow bettors to input implied probability and compare it against their own probability models.
- Show whether a bet has positive expected value (+EV).
- Used by professional bettors to determine whether a bet is worth placing.
Turning Odds Into Opportunities
By integrating implied probability into your betting strategy, you can shift from making emotional or random wagers to a structured, calculated approach that increases profitability over time.
Bettors who consistently apply implied probability analysis will make more strategic, profitable bets in the long run. Start using these techniques today, and transform your betting from guesswork to a winning strategy.
