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Football4Profit: Odds

Odds are your chances, plain and simple. Odds are how likely the outcome you are betting on will happen. To get statistical (which we will a bit, only because we think the more you know, the stronger your position) odds are going to equal the probability divided by one (1) minus the same probability. For example, the odds that you will choose the letter A from the alphabet are 1/25, not 1/26. The odds against you choosing the letter A (or any other single letter) would then be 25/1 (spoken "twenty five to one".) Another term for odds would be relative probability. Probability and odds are NOT synonymous: the probability of you choosing the letter A would be 1 in 26 (1/26). That's why you'll rarely see odds in the fractional format- it can be confusing with probabilities which are always expressed that way, but distinctly different. Instead you will hear that the odds are 25 to 1 against choosing the letter A, sometimes read as 25-1, where the first number you have is the number of ways you can lose, and the second number is the number of ways you'll win. This is where the phrase "odds against" comes from. If the event has x to y "odds against," would have the probability of y/(x+y).

So all the math mumbo jumbo, but you might wonder why should you even bother being concerned with odds? Primarily, odds not only give you information about your likelihood of winning your bet- just how far fetched or probable it will be- but also is using in determining how much you will get paid should you win. Ooo, we have your attention now, don't we?

If the odds are 25 to 1 (25:1), you will be paid twenty five times over the one wager he made. If the original bet was made for £20, with the odds being 25/1, the payout would be £20 x 25 = £500, with the original bet of £20 also being given back.

Let's break it down. If you have an event with the probability of occurring being 1 in 5 (so probability is 1/5 or 20% or 0.2) then the odds would be 0.2 / (1-0.2) or 0.2 / 0.8 = .25. This number, .25, is the stake that's required for an individual to win on one particular unit for the bet. You can take the decimal, and bring it up to whole number for the sake of ease; multiply everything by four and you find that betting one unit, earns you back four units, plus your original bet. For an event with .25 odds, betting £20 and winning would earn you back £80 plus your stake back, so a total of £100. Depending on the website you're using, you may even be able to set your account up to show odds in your preferred fashion: be them in decimal form (5.0 to include the original bet), fractional form (4-1, 4:1 or 4/1, said "four to one against"), in craps-style payouts ( 5 to 1) or as money line odds (+400 corresponding to the profit off the £100 bet).

For an event that has a higher likelihood of occurring, there would be a significant difference in the odds, resulting in a smaller profit even in the case of winning. For example, if a team has a 4 in 5 probability (4/5 = 80% = 0.8) of winning, then the odds would work out to be 0.8 / (1 - 0.8) = 4. Betting four units on this team winning would only win you back 1 unit, plus your original bet. Meaning if you drop £100, and the team wins, you will get back from your bookie £125.

Keep in mind that the above are the bare bones mathematics that are behind odds. These rarely ever are translated directly to what you see advertised through your bookmaker. The reason for this stems from the fact that bookies adjust the odds to account for their bottom lines. Technically speaking, they will represent the money that a bookie is willing to pay out on a particular wager. By combining the desire to stay relatively close to the true odds (of only to keep and attract business) and the need to ensure a profit for his own benefit, odds will be adjusted to pay out less to a winning punter than what would actually earn with true odds, keeping some funds for himself. The difference between true odds and what a bookmaker offers is called the "over-round."

Whereas a fair book would contain all possible outcomes totally 100 chance (A team to win carries a 50% relative probability, B team to win carries a 40% relative probability, and there's the 10% for a draw), the total equals a 100% book. The true odds for this case would be Team A to win is Even, Team B to win has 6-4 odds, and the draw carries 9-1 odds. To ensure himself a profit a bookie may decide to alter the odds to 60%, 50% and 20% with odds of 4-6, Even, and 4-1 respectively. Adding these odds up, it totals a 130% coverage- the 30 points past true odds count as the overround; these circumstances carry an overround of 30. If the bookmaker is successful in getting punters for all the circumstances, he'll be keeping the additional 30 units as profit for every 100 units paid back out to punters.

As a punter, the challenge lies in finding odds that coincide not only to your personal opinion of the outcome, but also good, close-to-true odds. You don't want to dish out more money than you need to in order to cushion a bookies pockets; that translates to less profit for you. Much of the competition between bookmakers springs from offering enticing odds to punters, since they share the events hosted.

Finally a word about Even odds. In the example given above, true odds gave even odds for team A to win, and the imaginary bookie adjusted his prices so that team B would be Even money. The phrases "evens," "even money," and "even odds" refer to the odds of an event that equal one-to-one; that is, you are paid out in profit the same amount you would bet. One unit begets one unit, as £100 would win an extra £100 should your event occur. From this phrase comes referring to some circumstances as "better than even odds." For those bets that pay out more than the bet you put in, such as 4-to-1 (and therefore paying out, say, £100 in addition to receiving your original £25 bet back), a gambler would get better than even odds. The less likely a win, the better the odds if you were to chooose to punt that outcome. If an event is more likely to occur, the odds will be worse than evens, meaning you earn in profit less than you originally bet if you were to win (as in our example above where a 4 to 1 odds would get you an additional £25 on your £100 bet.)

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