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Betting odds explained: fractions, decimals and the margin
Odds tell you two things at once: how much a winning bet returns and how likely the bookmaker thinks the outcome is. Once you can read both, comparing prices, working out returns and spotting the margin built into every market becomes straightforward.
What a price actually tells you
A price is a ratio between the profit you would make and the amount you stake. At 3/1, every £1 staked earns £3 profit if the bet wins, and you also get your £1 stake back. That total, stake plus profit, is called your returns.
The same price also carries a second message. A horse at 3/1 is one the bookmaker rates as less likely to win than a horse at 6/4, and far less likely than one at 1/2. Reading odds well means keeping both ideas in mind: what you could get back, and the chance the market gives the outcome of happening.
In Britain you will see two formats. Fractional odds are the traditional style, used on racecourses and in betting shops for generations. Decimal odds are common online and on betting exchanges. Most bookmaker websites let you switch between the two in your account settings.
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Fractional odds, evens, odds-on and odds-against
Fractional odds read as profit over stake. A price of 5/2 means £5 profit for every £2 staked. Put £10 on a 5/2 winner and you receive £25 profit plus your £10 stake, so £35 in total.
- Odds-against – the first number is bigger than the second, as in 5/2 or 4/1. The profit is larger than the stake, and the bookmaker rates the outcome as less likely than not.
- Evens – written 1/1 or EVS. The profit equals the stake: £10 at evens returns £20. The market treats the outcome as a fifty-fifty chance before the margin.
- Odds-on – the first number is smaller, as in 1/2 or 4/6. The profit is smaller than the stake: £10 at 1/2 returns £15. The outcome is rated as more likely than not.
Racing commentators often say a horse is "two to one on" when the price is 1/2. That is simply the odds-on price read the other way round.
Decimal odds and a conversion table
Decimal odds show your total return for each £1 staked, stake included. To convert fractional to decimal, divide the first number by the second and add one: 5/2 is 2.5 plus 1, which gives 3.50. To work out your returns, multiply the stake by the decimal price, so £10 at 3.50 returns £35.
| Fractional | Decimal | Implied probability | Returns on £10 |
|---|---|---|---|
| 1/2 | 1.50 | 66.7% | £15.00 |
| 10/11 | 1.91 | 52.4% | £19.09 |
| Evens (1/1) | 2.00 | 50.0% | £20.00 |
| 6/4 | 2.50 | 40.0% | £25.00 |
| 2/1 | 3.00 | 33.3% | £30.00 |
| 5/2 | 3.50 | 28.6% | £35.00 |
| 4/1 | 5.00 | 20.0% | £50.00 |
| 10/1 | 11.00 | 9.1% | £110.00 |
Decimal odds make comparisons quick, because a bigger number always means a bigger return. Fractional odds with awkward denominators, such as 11/8 or 13/8, are easier to rank once converted.
Implied probability: the chance hidden in the price
Every price can be turned into a percentage. Divide one by the decimal odds and multiply by 100. A horse at 4/1, or 5.00, has an implied probability of 1 divided by 5, which is 20 per cent. A horse at evens comes out at 50 per cent.
This is useful because it lets you ask a simple question about any bet: does the chance the price implies match your own view? If you think a horse has roughly a one-in-four chance and it is priced at 4/1, the price implies one in five. Opinions differ, of course, and the market is often well informed. The point is that implied probability puts the price and your judgement on the same scale.
Implied probability is not the true chance of anything. It is the bookmaker's view, adjusted for its margin and for the money already placed on the market.
The bookmaker's margin, or overround, worked through
If a bookmaker priced every runner at its true chance, the implied probabilities in a market would add up to exactly 100 per cent. In practice they add up to more, and the excess is the bookmaker's margin, known as the overround. Here is a simple four-runner race.
| Runner | Fractional | Decimal | Implied probability |
|---|---|---|---|
| Horse A | 6/4 | 2.50 | 40.0% |
| Horse B | 2/1 | 3.00 | 33.3% |
| Horse C | 4/1 | 5.00 | 20.0% |
| Horse D | 8/1 | 9.00 | 11.1% |
| Total book | All four runners | – | 104.4% |
The book adds up to 104.4 per cent, so the overround is 4.4 percentage points. Spread across all the runners, that margin is what allows the bookmaker to run a business whatever the result. Bigger fields usually carry bigger overrounds, which is one reason prices in a large handicap can look generous on individual horses while the book as a whole favours the bookmaker.
You can do the same sum on any market. A football match with both sides of a two-way market priced at 10/11 adds up to roughly 104.8 per cent. The lower the total, the fairer the prices are to the punter.
Odds in horse racing: SP, early prices and BOG
Racing adds a few twists. The price you take when you place a bet is fixed, but you can also bet at the starting price, or SP, which is the official price when the race begins. Many UK bookmakers offer Best Odds Guaranteed on UK and Irish racing: if you take a price and the SP turns out bigger, you are paid at the SP. Terms apply, so check them before relying on it.
Each-way bets are settled at a fraction of the win odds for the place part, usually a quarter or a fifth depending on the number of runners and the type of race. Our each-way calculator handles the arithmetic, and the form guide explains how to read the figures that shape a horse's price in the first place.
Using odds sensibly
The single most practical use of this knowledge is comparing prices. Different bookmakers often price the same horse differently, and over many bets a slightly bigger price on each one adds up. Our bookmaker reviews describe the UK-licensed operators we cover, and our guide to how free bets work shows how odds affect the value of a free bet.
Understanding odds will not change the fact that the margin favours the bookmaker over time. Treat every stake as money spent on entertainment, set a budget before you start and use the deposit limits your bookmaker provides.
Common questions
How do I convert fractional odds to decimal odds?
Divide the first number by the second and add one. So 5/2 becomes 2.5 plus 1, which is 3.50, and 4/1 becomes 5.00. Evens, written 1/1, converts to 2.00. Most bookmaker websites can also show prices in decimal format through your account settings.
What does odds-on mean?
A price is odds-on when the profit is smaller than the stake, as with 1/2 or 4/6. The bookmaker rates the outcome as more likely than not. A £10 bet at 1/2 returns £15 in total if it wins: £5 profit plus the £10 stake.
What is the overround?
The overround is the amount by which the implied probabilities in a market add up to more than 100 per cent. If a race's prices total 104.4 per cent, the overround is 4.4 percentage points. It is the margin the bookmaker builds into its prices.
Does implied probability tell me the real chance of winning?
No. Implied probability converts a price into a percentage, but it reflects the bookmaker's view, its margin and the money placed on the market. It is a useful way of comparing a price with your own judgement, not a measure of the true chance.