How to calculate winnings from betting odds and observed odds?

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How to calculate winnings from betting odds and observed odds?

Learn to calculate potential winnings from bookmaker odds before placing bets. Why you also need to perform long-term observations to spot hidden trends.



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Updated on 27 October 2018
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What are betting odds and what do betting odds really mean?


It’s hard to know one without the other, but that’s exactly what happens in the world of betting when people do not really think about odds and their real meaning. They just think about the return that could be gained from a correct bet, converting the odds between moneyline, decimal and fractional and the ungenerous bookmaker that offers a low odds price on an unrealistic suggestion.


Have you ever thought why bookmakers rarely provide any bets in football greater than 500-1? The answer lies in the fact that sometimes, no-matter how rare, but sometimes the random and unrealistic selections and unexpected results do occur.


I’m sure you can remember plenty of times when underdog’s beat their competition and your friends would have thought you were insane for such a prediction. Soccer is never obvious.


There are always unexpected results and there are always times when your beliefs are proved incorrect. Some would say that soccer is completely random, I would be inclined to agree.


The elements within a game of football are truly random and football mathematics has a lot to do with the unpredictable occurrences within any match.


However, the eventual outcome when researched in aggregate IS predictable. If the same match was played 100 times, you could make a prediction of the eventual outcome and you would be right.


In this way football (or soccer for other parts of the world) is inherently predictable. The issue is that discovering exactly when that win (or loss if you’re laying) will occur is always the problem. That’s why you need to truly understand how to calculate your winnings and understand the risk associated with the selection.

Calculating your winnings using bookmaker odds


Okay. I know you really want to know this bit, so let’s get down to it.


Calculating the odds needs, well, the odds. So, let’s try a few key examples and work through the basics, so you can do this for yourself without the need for online calculators.


Let’s say you required to know the winnings based on the following football match odds:

Home Win: 2.2

Draw: 3.82

Away Win: 2.54


To make things easier, let’s assume that you’re using a simple £1 (or 1-unit stake). This means that may you want to find your winnings for each of the betting odds above. Let’s walk through the potential winnings using the maths formula, below.


Potential Return

Potential Return = Stake x Bookmaker Odds

Home Win Potential Return = £1 x 2.2 = £2.2

Draw Potential Return = £1 x 3.82 = £3.82

Away Win Potential Return = £1 x 2.54 = £2.54


Potential Profit

Potential Profit = Stake x (Bookmaker Odds - 1)

We subtract ‘1’ from the decimal odds, to account for the original stake risked on that event. So, the potential profit calculation is really:


Potential Profit = (Stake x Bookmaker Odds) – Stake


If we use the same example above, this provides the following:

Home Win Potential Profit = £1 x (2.2 – 1) = £1.2

Draw Potential Profit = £1 x (3.82 – 1) = £2.82

Away Win Potential Profit = £1 x (2.54 – 1) = £1.54


Now, if you were to wager more money than £1, you would simply replace the £1 in the examples, above with the amount of money that you have risked. This would give you the appropriate pay out based on the odds.


If you believe you need more assistance and more help working out the winnings, you just need to check out the odds pay out guide, it will give you a few quick examples of winnings based on example bookmaker odds.

Understanding probability before calculating your winnings


We all want to know how much we’re going to win, but knowing how much you’re going to win doesn’t really matter if you don’t know if your selection even stands a real chance of winning.

That’s the issue that many newbie bettors face and you have the chance to stop that right now by taking the time to learn more about betting, statistics, odds and value.

Now you know the betting odds you really need to understand the best options for the probability and your odds. Therefore, ensuring that you can make the best betting choices as soon as you know how much you stand to win.


To do this we have to take a quick look at probability and find the best way to make this work for our football bets

The fundamentals of probability


To best understand probability, we really need to work out the likelihood of an event occurring. We’re talked about this before, but this will be a good refresher if you cannot calculate how to identify the (implied) probability based on the bookmaker odds.


Remember the bookmaker odds do not provide accurate probability, they provide an example of the implied probability, which signifies the likelihood of an event occurring based on the bookmaker’s assessment of the event.


The bookmakers’ assessment of the event is not generally based on the real probability of the event, but more a combination of different factors.


A basic coin toss provides am obvious 50-50 chance of landing on heads or tails (assuming the coin is fair). This is an easy one to calculate, but what about a soccer match?


What is the real probability of the match ending in a home win, draw or away win? Or even what’s the true probability of the score line ending 2-1, 1-0 or even 5-0? They’re all questions that you want to know as a football bettor.


There are several methods to discover the probability of a result, score line or outcome, but another option is to create a model based on historical information to come up with a realistic view of results and score lines for a league.


If we take the Italian Serie A as an example, we can chart the percentage of results and score line to discover how often teams win or lose matches. This will give us a good idea of the real historical statistics, so you can evaluate the score lines and make calculations.

Serie A results from 2010/2011 season to 2017/2018 season

SeasonHome WinDrawAway Win

2017/2018
164 83 133

2016/2017
185 80 115

2015/2016
177 96 109

2014/2015
152 120 108

2013/2014
181 90 109

2012/2013
177 96 107

2011/2012
173 111 96

2010/2011
179 97 104

Average
174 97 110



Taking this information, we can create a table of percentages, so we know the percentage of the time in recent memory that Serie A matches finished in a Home Win, Draw or Away Win.

Season% Home% Draw% Away

2017/2018
43% 22% 35%

2016/2017
49% 21% 30%

2015/2016
47% 25% 29%

2014/2015
40% 32% 28%

2013/2014
48% 24% 29%

2012/2013
47% 25% 28%

2011/2012
46% 29% 25%

2010/2011
47% 26% 27%

Average
46% 25% 29%



By using data averages, we can see the number of matches across all seasons where the Italian Serie A results have produced the following percentages within the pie chart, below:



This in turn translates to the following odds (based on historical observed results):

Mean Average Home Win Odds = 1 / (Mean Average Home Win Percentage as decimal)

Mean Average Home Win Odds = 1 / (46% or 0.46) = 2.19

Mean Average Draw Odds = 1 / (Mean Average Draw Percentage as decimal)

Mean Average Draw Odds = 1 / (25% or 0.25) = 3.93

Mean Average Away Win Odds = 1 / (Mean Average Away Win Percentage as decimal)

Mean Average Away Win Odds = 1 / (29% or 0.29) = 3.45


Remember these results are the mean average and therefore the real observed results may vary from the mean. This just gives us a method to indicate how often the results have deviated from this mean average and suggested fair odds for that possibility.


It’s clear that there are a few moments in the tables above where the results have deviated by a significant percentage to consider the results within that season to be outliers.


So, if we observe enough results, we can make a judgement on the statistical likelihood of any result reverting back to the mean average after a period of above or below average performance.


Therefore, when there is a season or several seasons where the percentage of home wins, draws or away wins are significantly above or below the mean average, we can make a judgement that the following season(s) may produce the opposite effect and therefore, allow us to take advantage of results that have deviated more than statistical norms.


Bookmakers or betting exchange traders cannot cover every eventuality. Using data observations can help you to calculate potential winnings using your mean average odds rather than relying on bookmaker odds to judge the likelihood of an event.

Using the observed results and the bookmaker odds to your advantage


Initially, we need to identify seasons where there have been large variations from the expected results. If we look at the same table, but use highlighting we can see large negative deviations from the average within the yellow cells, below.


Season% Home% Draw% Away

2017/2018
43%22% 35%

2016/2017
49%21% 30%

2015/2016
47% 25% 29%

2014/2015
40% 32% 28%

2013/2014
48% 24% 29%

2012/2013
47% 25% 28%

2011/2012
46% 29%25%

2010/2011
47% 26% 27%

Average
46% 25% 29%




This is where observed results have provided fewer options than would have been expected. There could be an opportunity to identify possible changes in the observed results and therefore find a profitable betting strategy the season following this observation.


Consider reviewing results immediately after a drastic variation from expected results.


So, if you observed the 2014/2015 Serie A season resulted in fewer than expected home wins. You may reduce your betting on home wins the following season, as we would expect the results to revert to the mean eventually.


Awareness of this could help you reduce liabilities due to short term data changes and only place bets when you believe there is a potential swing (in your favour) and the bookmaker odds offer more profit above your observed odds.


So, in effect that’s placing bets on the Serie A when the analysis is correct, the bookmaker odds are within range of (or ideally above) the mean average odds and the expected value are also working within your favour.


This is a lot to remember, but the data within the soccer statistics pages provide visual clues to help you make more informed choices.


Good Luck!



Tags: trends, odds

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