How To Calculate Betting Odds Payout
Posted : admin On 4/2/2022- How To Calculate Betting Odds Payout Chart
- How To Work Out Betting Odds Payout
- How To Calculate Payout Odds
Sometimes it is necessary to figure out the average odds from a set of betting odds which can then be used as the basis for further calculations. For example, computing deviation and variance.
How To Calculate Betting Odds Payout Chart
- Read our expert guide on betting odds and gain an understanding of how online sports betting odds wok. Learn about fractional odds, decimal odds and more.
- Using Betting Odds to Calculate Winnings Betting odds allow you to calculate how much money you will win if you make a bet. Let’s use the same examples as before, with the same replacement of numbers for letters, i.e. 4/1 becomes A/B. Quite simply, for every value of B that you bet, you will win A, plus the return of your stake.
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- Sports Betting Odds Explained. To properly understand sports betting, you need to understand odds. They are an integral part of any sports wager, and they are used to determine whether a wager is worth making or not. The potential payout of any wager you place is calculated using a combination of the relevant odds and your stake.
With this betting odds calculator you can convert odds to probability (percentages).
When using odds in European format (decimal) you can be forgiven for thinking that average betting odds are simply computed by building the arithmetic mean of the data to be analysed. Unfortunately, this is the wrong approach and leads to a deceptive result.
As a reminder, European odds are calculated as the reciprocal of the statistical probabilities of each event:
and vice versa … The implied probabilities are the reciprocals of the odds:
In effect, European odds are ratios/relations representing the likelihood of an event happening in comparison to each other event (e.g. a bet priced at odds of 4.0 is half as likely to win as a bet with odds of 2.0).
If these ratios are averaged using arithmetic mean (a common error), high data points are given greater weights than low data points. (e.g. working out the arithmetic mean of a set of 20 odds, 19 of them between 2.0 and 2.4, would be skewed if the 20th figure was, say, 15.0).
The correct approach is to calculate average odds by forming the harmonic mean!
How To Work Out Betting Odds Payout
The harmonic mean is defined as the reciprocal of the arithmetic mean of the reciprocals of x1, x2, …, xn (the odds):
As the reciprocals of betting odds are the implied probabilities of the events, one can calculate the harmonic mean as a reciprocal of the average probability of the respective bets:
The above equations rearranged facilitates the harmonic mean calculation by dividing n (the number of matches) by the sum of the reciprocals of the odds:
Or alternatively… dividing n (the number of matches) by the sum of their individual probabilities:
The Result (Harmonic Mean) is the Accurate Average of the Betting Odds.
Excel users employ the following formula: =HARMEAN(number1,number2,…)