One of the most crucial skills for any serious bettor is the ability to convert betting odds into implied probability. Understanding how odds reflect the implied chances of an outcome — and how those numbers compare to real-world probabilities — allows you to identify value bets and make +EV decisions. In this guide, we’ll break down how to convert moneyline and fractional odds into implied probability, why sportsbook odds differ from actual probabilities and how to find overpriced and underpriced bets.
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How to Convert Betting Odds Into Implied Probability
Sportsbooks present odds in different formats — American (moneyline), fractional and decimal — but they all reflect the same fundamental concept: the implied probability of an outcome.
To convert odds into implied probability, use these formulas:
For American (Moneyline) Odds:
- Positive Odds (+X): 100 / (X + 100)
- Negative Odds (-X): X / (X + 100)
For Fractional Odds (X/Y):
- Y / (X + Y)
For Decimal Odds (D):
- 1 / D
Suppose you see a bet for the Chiefs at -150 to win the Super Bowl and their opponent at +130.
- Chiefs (-150): 150 / (150 + 100) = 150 / 250 = 60% implied probability
- Opponent (+130): 100 / (130 + 100) = 100 / 230 = 43.48% implied probability
At first glance, these probabilities add up to 103.48% — which brings us to the next point: Sportsbooks build a margin into their odds.
Why Sportsbook Odds Differ From True Probability
If sportsbooks priced bets at exactly their true probability, they wouldn’t make money. Instead, they add a margin (or “vig”), meaning the combined implied probabilities of both sides of a bet will always exceed 100%.
This house edge ensures the sportsbook profits over time, regardless of individual bet results. Your job as a bettor is to recognize when a sportsbook has mispriced a bet — where the true probability of an outcome is greater than the implied probability in the odds offered.
How to Identify Overpriced and Underpriced Bets
Finding mispriced bets is the foundation of positive expected value (+EV) betting. Here’s how to do it:
Calculate Implied Probability and Compare to Market Efficiency
Once you convert the odds into implied probabilities, compare them to your own assessment of the true probability. If you believe an event has a 55% chance of occurring but the odds only imply a 50% probability, you’ve found a potential value bet.
Use Market-Maker Sportsbooks as a Baseline
Sharp sportsbooks (like Pinnacle and Circa) tend to have the most efficient odds, as their lines are shaped by professional bettors. If you notice significant differences between a sharp book’s odds and a more recreational sportsbook’s line, you might find value opportunities.
Remove the Sportsbook’s Vig
To get a clearer picture of true market probability, you need to remove the vig. One common method is the margin-neutral implied probability formula:
- Fair Probability of Team A = Implied Probability of Team A / (Implied Probability of Team A + Implied Probability of Team B)
- Fair Probability of Team B = Implied Probability of Team B / (Implied Probability of Team A + Implied Probability of Team B)
For example, using our earlier Chiefs (-150) vs. Opponent (+130) example:
- Chiefs: 60% / (60% + 43.48%) = 60 / 103.48 = 58.0% true implied probability
- Opponent: 43.48% / 103.48% = 42.0% true implied probability
Now, if your own research suggests the Chiefs should be winning 62% of the time, then the fair moneyline should be -163. If the sportsbook is offering -150, that would indicate a small edge.
Utilize Portfolio EV to Find +EV Bets
Instead of manually calculating implied probabilities across multiple books, Portfolio EV can automate this process, showing you where discrepancies exist between fair market odds and inefficient sportsbook pricing. This makes it easier to spot +EV bets that offer an edge over the market.
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Final Thoughts on Converting Odds and Finding +EV Bets
Understanding how to convert betting odds into probability is a fundamental skill for successful sports bettors. By knowing how to adjust for vig and compare implied probabilities to actual probabilities, you can spot mispriced bets and take advantage of market inefficiencies.
Tracking sharp sportsbook lines, leveraging Portfolio EV and consistently betting into +EV situations will help maximize long-term profitability. Mastering this process puts you ahead of casual bettors who rely on gut instincts rather than mathematical edges.
If you want to sharpen your betting strategy further, start by tracking your bets, comparing implied probabilities and finding inefficiencies in sportsbook pricing. Over time, this disciplined approach will pay off in sustained profits.
