In a betting market, learning how to calculate betting odds from probability is essential in order to be able to assess the betting value. But for that, you must first know the difference between probability and odds.
Probability and odds are often used interchangeably in casual conversations to describe the likeliness of an event to occur. However, those statistical terms describe the likeness in starkly different contexts. If you choose to enter the arena of live betting odds without knowing the difference, you’d probably end up with a huge hole in your pocket.
Mathematically, a probability is calculated by dividing the chances of winning by the total number of available chances. Therefore, a high probability would mean that there are high chances that the event will occur and vice versa. Its value lies in the range of 0 and 1 and is expressed in fractions or percentages. For example, if there are four cards – red, blue, yellow and green – and you are to get only one card, then the probability that you will get a red card will be a 1 in 4 or ¼ or 25%.
Odds, on the other hand, are calculated by dividing the probability that an incident will not happen by the probability that the incident will happen. Therefore, if the live betting odds are high, then the event may not occur altogether. Considering the same example of four different-colored cards, the odds of getting a red card would be calculated by dividing the total number of chances that you don’t get a red card by the number of chances that you get a red card. In our case, the result is 3:1, where there are three chances that you do not get a red card and only one chance that you do get a red card.
Now that you know the basic difference, remember that in gambling, odds rarely mean the chances of winning. Then there is a concept of “true odds” and “payout odds,” which you need to understand in depth to increase your chances of winning.