# How to read betting odds

If you are planning to enter the betting or the gambling world, it is important to understand and interpret all types of odds well. Be it casino gambling, sports betting, or any other type, it’s important to understand the odds. Simply put, Betting odds represent the probability of an outcome occurring and the winnings you will receive if your bet is a winner.

There are three main types of betting odds: Fractional (British) odds, Decimal (European) odds, and American (moneyline) odds. These are different ways of presenting the same thing and hold no difference in terms of payouts.

Fractional odds are the ratio of the amount (profit) won to the stake; Decimal odds represent the amount one wins for every \$1 wagered; and American odds, depending on the negative or positive sign, either show the amount one needs to wager to win \$100 or the amount one would win for every \$100 staked.

Fractional odds

For example, with odds of 4/1, for every \$1 you bet, you will win \$4. There is a 20% chance of this happening, calculated by 1 / (4 + 1) = 0.20.

Total Return = [Stake x (Numerator/Denominator)] + Stake
where numerator/denominator is the fractional odd, e.g. 28/6.

Decimal odds

The favorites and underdogs can be spotted instantaneously by looking at the numbers. The decimal odds number represents the amount one wins for every \$1 wagered. For decimal odds, the number represents the total return, rather than the profit.

The total (potential) return on a stake can be calculated as:

Total Return = Stake x Decimal Odd Number

American odds

The odds for favorites are shown by a minus (-) sign, showing the amount you need to stake to win \$100. Meanwhile, the odds for underdogs are accompanied by a positive (+) sign, indicating the amount won for every \$100 staked.  In both cases, you get your initial wager back, in addition to the amount won. The difference between the odds for the favorite and the underdog widens as the probability of winning for the favorite increases.