What is implied probability in betting?
Implied probability is the chance of an outcome that a set of betting odds suggests, expressed as a percentage and found by dividing one by the decimal odds.
Odds are just probabilities wearing a disguise. Strip the disguise off and you can ask the only question that matters: is this outcome more likely than the price says?
The formulas:
| Format | Formula | Example |
|---|---|---|
| Decimal | 1 ÷ odds | 2.50 → 1 ÷ 2.50 = 40% |
| Fractional | right ÷ (left + right) | 6/4 → 4 ÷ 10 = 40% |
| American (−) | odds ÷ (odds + 100) | −150 → 150 ÷ 250 = 60% |
| American (+) | 100 ÷ (odds + 100) | +200 → 100 ÷ 300 = 33.3% |
The concept is identical in the UK and the US. Only the odds format you start from changes.
Example
A football match is priced Home 2.10, Draw 3.40, Away 3.60.
- Home: 1 ÷ 2.10 = 47.6%
- Draw: 1 ÷ 3.40 = 29.4%
- Away: 1 ÷ 3.60 = 27.8%
- Total: 104.8%
Three outcomes can’t really add up to more than 100%. The extra 4.8% is the bookie’s margin, known as the overround. So each implied probability is slightly inflated. The “fair” chance of the home win is closer to 47.6 ÷ 104.8 = 45.4%.
Watch out
Implied probability isn’t the true probability. It’s the bookie’s price, shaped by their margin and by where the money has gone. Your job as a bettor is to form your own estimate and compare.
- You think the home side wins 52% of the time and the odds imply 47.6%? That’s potential value.
- You think 45%? Walk away, however much you like the team.
This one conversion is the most useful habit in betting. My guide on how betting odds work has more, and the odds converter does the sums for you.