How Do Betting Odds Work? American Betting Odds Explained

Introduction: Betting Odds Explained

Curious how betting odds work? Understanding how to read betting odds is fairly straightforward once you get it. Generally, sports betting odds are written in one of three formats: American, Decimal, or Fractional.

In this article, we’ll explain how American sports betting odds work, which are typically used across Canada and the United States. American odds are written in the format of a plus or minus sign, with three numbers afterwards such as: +150, -110, -260, and so on. Like all formats of odds, American betting odds communicate how much a player can win based on how much money they bet, in addition to the likelihood of the bet succeeding. In all, this article covers the following:

This article is part of The Ultimate Beginner’s Guide to Sports Betting, a course by Canada Sports Betting.

Key Concepts

While this article goes into depth on how to read American betting odds, and how to calculate your stake or profit, there is no need to memorize formulas. While many bettors can quickly convert odds using mental math, most bettors will use an odds calculator to convert between odds format. So if math isn’t your thing, no problem. Use our odds calculator here instead.

Positive American Odds:

1. Indicates the underdog, or the riskier bet.
2. Will always pay out more money in profit than is required to stake.
3. Uses the formula: Stake = Your Profit / (Odds / 100)

Negative American Odds:

1. Indicates the favourite, or the safer bet.
2. Requires bettors to risk staking an amount greater than their potential profit.
3. Uses the formula: Profit = (100 / Absolute Value of Odds) * Stake 

How Do American Betting Odds Work?

American odds, sometimes referred to as Moneyline Odds, are the most common way of expressing betting odds in the United States and Canada. 

American betting odds are always three digits long, and will always have a plus (+) or a minus (-) sign in front of them. American odds are based around the number 100: odds with a + in front of them indicates how much you could win if you bet $100. On the flip side, negative odds (with a – in front) show how much you need to bet to win $100. American odds always indicate potential profit, not your total return. This means if you are successful, you will always receive your stake back plus any profits won.

American Odds use 100 as its base because $100 is a common stake amount in sports betting. That said, this doesn’t mean you can only bet $100 with American odds – you can bet any amount you like. Using 100 as a baseline is meant to be a simple way of showing your potential payout by using a stake amount people frequently bet. At a glance, you can understand how much you have to risk compared to how much you could win. Fortunately, it’s very easy to calculate your payout given a different stake. You can use a simple formula (or some quick mental math) to determine your payout if you bet an amount that is not $100, which we explain below.

As an important note, you may also see a + or – sign used in spread betting, which is a type of betting market rather than an odds format. The plus and minus signs hold a different meaning when used in spreads, which we will cover in Unit 3.3 – How Does Spread Betting Work?

How To Read American Sports Betting Odds

Online betting odds are displayed in a standard style on most sportsbooks. Typically, sportsbooks display odds in a home team versus away team format, with the team listed in one column and the odds listed in the next column. North American sports always list the away team first, either listed on the top or left (depending on the sportsbook’s setup). The home team follows, either on the right side or underneath the away team. 

At most sportsbooks, you’ll see odds listed for the Moneyline, for the Spread, and for Over/Under bets. Each of these is a different type of outcome that you can bet on, each with its own probability, potential payout, and therefore its own odds. We cover each of these types of betting markets in Module 3.1: Understanding Betting Markets.

What Does The + Mean In Betting? Understanding Positive Betting Odds

In sports betting, American odds use a + sign to indicate how much you can win on a bet of $100. For instance, if you see odds of +250, it means that betting $100 would return a profit of $250. The profit does not include your initial wager, which means you get your staked $100 back in addition to the $250 won. Positive odds generally indicate a riskier bet, or one that is unlikely to win. As a general rule of thumb, the larger the positive number, the riskier the wager and the less likely it is to win.

How to Identify the Underdog in American Odds

In the case of betting on an event between two teams, the team with positive odds is usually dubbed “the underdog”. The underdog is considered less likely to win due to skill, injury, or past performance, and is therefore riskier for the sports bettor to wager on.  When you see positive odds assigned to an event that is not between two teams, such as whether a player will score or not during a game, this simply indicates that the bet is unlikely to win. In this case, we wouldn’t use the term “underdog” as it generally only applies to events between two opponents. Or, for instance, if you’re betting on an event with many potential outcomes, such as who will win the SuperBowl, you’re still going to see positive or negative odds for all teams involved. In this case, we may not refer to any one team as “the underdog” simply because there will be many teams given positive odds. That said, the same principle holds true in that the teams with positive odds are riskier to bet on, and less likely to win. 

Remember that positive American odds indicate you could win more than you wager. For that reason, sportsbooks give positive odds to the underdog to incentivize and reward bettors for taking on risk. Sportsbooks are willing to promise you more money in return for what you wagered, because the likelihood that they’ll have to fulfil the bet is low. In summary, when you see a + before American betting odds, the bet will pay an amount higher than your stake but it’s also less likely to yield any profit at all. 

Positive Betting Odds: How to Calculate Your Winnings

Although American odds use $100 as a baseline, bettors will frequently stake other amounts. If you want to wager more or less than $100, it’s simple to calculate your potential profit given any stake. You can use the following formula: 

Your Profit = (Odds / 100) * Your Stake 

We begin by dividing the odds by 100 to determine how much would you win for every $1 wagered, instead of every $100 wagered. Then we multiply the result by how many dollars you actually staked to get your payout.

Let’s look at an example. Let’s say a team has odds of +200, and their opponent has -200. You want to bet $10 on the underdog (the team with +200 odds). For simple odds like this, you can probably calculate the answer in your head, but for larger, more complicated bets, it’s good to have a formula or odds calculator on hand. 

When the odds are positive, we know that our profit will always be more than the stake. In this case, we know we did the calculation correctly because $20 is greater than $10.

Positive Betting Odds: How to Calculate Your Stake

In the example above, you had an amount in mind you wanted to bet, and wanted to learn how much you could win. However, sometimes you may wish to win a certain amount in profit and need to know how much to wager in order to do so. In this case, we can use the same formula as above, but with the variables moved around:

Stake = Your Profit / (Odds / 100)

Let’s use the same example as earlier. You’d like to win $20, and you’re given odds of +200 How much should you bet? In our formula, this looks like this:

The numbers you’re working with won’t always be perfectly whole integers. That’s okay – the formula works the same with irregular decimal numbers. Let’s look at a more complicated example. An outcome is given odds of +335 and you would like to win $800.

For simplicity, we would say you should bet $239 in order to win $800 on these odds. 

What Does The – Mean In Betting Odds? Understanding Negative Betting Odds

As a reminder, odds with a – in front of them indicate the amount you need to bet in order to win $100. Typically, the outcome given negative odds is considered the favourite, or the outcome that is more likely to succeed. This bet is generally considered less risky for the sports bettor because it is the more likely outcome, and therefore is more likely to win a profit. Because the sportsbook takes on more of the risk (i.e. it is likely they will have to pay out the winnings), they ask bettors to wager more money than the potential profit. The profit does not include your initial wager, which means you get your staked amount back in addition to any profits won. What’s important to remember is when betting on the favourite, you will always have to bet an amount greater than what you could win, which generally means risking a larger sum of money than when betting on the underdog.

For example, if you’re given odds of -250, it means you would need to stake $250 to make a profit of just $100 (plus your stake of $250 is given back to you). Sometimes, when a bet is considered a ‘sure thing’ (although seasoned sports bettors will know there is no such thing in reality), the odds will be very expensive. The more money you have to spend, the more likely you are to win – but you have to be willing to risk more money for a smaller payout. For example, if you’re given odds such as -750, this outcome is considered very likely to happen because you have to shell out $750 to win just $100 (plus your $750 back to you). That’s a large sum of money to risk for a small payout. As always, make sure to do your research before placing any kind of wager.

Negative Betting Odds: How To Calculate Your Winnings

When betting on negative American odds, if you stake the same dollar amount as the odds given, your profit will always be $100. For example if you bet $250 on odds of -250, or $110 on odds of -110, or $500 dollars on odds of -500, in each instance you will win $100. 

If, however, you want to wager on negative odds and would like to calculate your profit given a different stake, we can use the following formula:

Profit = (100 / Odds) * Stake 

When inputting negative odds into a formula, you should omit the minus sign and treat the number as a positive integer – also called the absolute value. For instance, the absolute value of -300 is 300.

Let’s input an example. Say an event has odds of -250. How much could you win if you bet $50? We can calculate your potential profit as follows:

In this case, betting $50 on odds of -250 would yield a profit of $20, plus your stake of $50 back. As you can see in this example, betting on negative American odds yields a profit that is less than your original stake, as $20 is less than $50. 

Negative Betting Odds: How To Calculate Your Stake

Sometimes when wagering on negative odds, you may have a desired profit in mind that you’d like to win. In this instance, you need to know what stake you should wager given certain odds. Sometimes, you can do some quick mental math to determine what you should wager, but just in case it’s good to have the following formula handy:

Stake = (Odds * Profit) / 100

Let’s look at a more complicated example this time. You’re given odds of -420 and you’d like to win $500. How much should you stake to take home $500? The steps to calculate the stake are as follows:

So, our formula tells us that in order to win $500, a bettor would have to stake a whopping $2100. It’s always good to calculate your potential payout and your required stake before betting, so you can gauge how much you truly have to risk in order to win and whether it’s worth it. In the example above, it may be safer to bet small and take home a smaller payout, unless you are absolutely sure in your knowledge about the team you’re betting on.

Betting Odds Explained: FAQ