How betting odds work: decimal odds and implied probability
Quick answer: Odds show how much a bet pays and the implied chance of an outcome. In decimal odds, your return = stake × odds, and the implied probability =...
Quick answer: Odds show how much a bet pays and the implied chance of an outcome. In decimal odds, your return = stake × odds, and the implied probability = 1 ÷ odds. Bookmakers add a margin, so the implied probabilities add up to more than 100%.
Decimal odds and implied probability
| Decimal odds | Implied probability | €10 returns |
|---|---|---|
| 1.50 | 66.7% | €15.00 |
| 2.00 | 50.0% | €20.00 |
| 2.50 | 40.0% | €25.00 |
| 3.00 | 33.3% | €30.00 |
| 5.00 | 20.0% | €50.00 |
| 10.00 | 10.0% | €100.00 |
The bookmaker’s margin
If a fair coin flip were priced fairly it would be 2.00 / 2.00 (50% each). Bookmakers shorten this (e.g. 1.90 / 1.90) so the implied probabilities exceed 100% — that gap is the margin, or ‘overround’, and it is how they profit. Comparing odds and avoiding heavy-margin markets improves long-term value.
Frequently asked questions
- How do I calculate my winnings from decimal odds?
- Multiply your stake by the decimal odds. A €10 bet at 2.50 returns €25 in total (€15 profit plus your €10 stake).
- What is implied probability?
- The chance of an outcome implied by the odds: 1 ÷ decimal odds. Odds of 4.00 imply a 25% chance.
- Why don’t the probabilities add up to 100%?
- Because the bookmaker builds in a margin (overround). The total exceeds 100%, which is the operator’s built-in edge.
- Are higher odds better?
- Higher odds pay more but imply a lower chance of winning. ‘Value’ is when you judge the real chance to be higher than the odds suggest.
Related guides
Our editorial team covers regulated betting markets across Africa, focusing on licence verification, payment methods and responsible gambling tools. This betPawa Tanzania guide is based on publicly available licence data from the Gaming Board of Tanzania, official betPawa product pages and cross-referenced third-party research. We are not affiliated with betPawa or any operator. This is an independent editorial guide. Always verify current terms at betpawa.co.tz.