Odds Explained – Horse Racing – How To Read Horse Racing Odds

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You could go betting on the sport of kings without knowing anything about odds, but it’s going to about as successful for you as putting your horse racing bets on based on the colours the jockey is wearing! It’s important to know how to read horse racing odds so that you know how to put on smart bets, because the smarter your betting gets, the better your potential profits.

With horse racing you need to have a basic understanding of how to read horse racing odds to decide what odds offer a smart betting choice, as well as which odds you need to avoid. Our horse racing odds explained guide is the perfect starter guide, designed to provide you with a simple and clear introduction to the world of horse racing odds. Our horse racing odds explanation will cover what odds are, the different formats you might find when betting, how to calculate odds and winnings, and much more. Think of this as a horse racing odds explained for dummies guide!

What Do The Horse Racing Odds You’ll See At A Bookmaker Mean?

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The horses for every race are given odds by the bookmaker, based on the bookies prediction of how likely each runner is to win. The horse most likely to win is known as the favourite, and will have the shortest odds. Horses the bookies think are least likely to win will have the longest odds, and are called outsiders. The odds also tell you the profits you’ll receive if your horse wins. The shorter the odds, the less money you will win for your bet, while the longest odds offer higher profits.

So, for example, you might see the favourite, ‘Racey McRaceFace’, with the shortest odds of 2/1 (3.00) and ‘My Gran Runs Faster’ with the longest odds of 500/1 (501.00). This means the bookmaker has looked at the form of the horses and thinks: ‘Racey McRaceFace’ has the best chance of winning, and ‘My Gran Runs Faster’ has the least chance of winning.

As you can see, the odds represent the likelihood of a particular horse winning, and if you remember your maths classes from school, you’ll remember that likelihood is better known as probability. And to understand odds when you want to know how to read horse racing odds, you’re going to have to understand a little about probability and how it relates to the odds the bookies give for each horse. We’ll cover that soon as we continue our horse racing odds explanation.

As for the two ways we’ve demonstrated the odds in the example above,  these are known as fractional odds (2/1) and decimal odds (3.00). Betting.org always uses both to make things crystal clear for you, but we’ll explain the different formats of odds later on in horse racing odds explained.

Understanding Probability In Horse Racing And How This Is Converted To Odds.

When the bookmaker sets their odds, they do so in such a way that ensures they’re going to make money. They look at the form and history of a horse, how it reacts to conditions, the jockey, the trainer, the lineage of the horse, and many more factors. With this knowledge, they decide how likely each horse is to win a particular race compared to the other runners.

This likelihood of winning is best expressed as a probability. So, looking at ‘Racey McRaceFace’ again; the bookie decides he has a probability of winning roughly 1 in every 3 races, working out to 33%. Whereas ‘My Gran Runs Faster’ is a real nag, and the bookies all think he has almost no chance of winning; as a result, they give him a probability of winning of about 0.2%.

The bookies will do this with all the horses in a race, but they express this probability percentage as odds. Knowing how to relate the probability of winning to odds is absolutely key to any understanding of how to read horse racing odds, which is why we’re going to go through examples in our guide to horse racing odds explained.

Turning Probability Of Your Horse Winning Into Odds: The Calculation

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This is a simple calculation, and when you truly understand just how to read horse racing odds, you’ll be see odds and be able to work out the implied probability immediately.

Again, we’ll use ‘Racey McRaceFace’ with his odds of 2/1 (3.00) but we’ll only be using the fractional odds of 2/1 in this conversion, to keep things simple.

The equation to calculate Probability (P)  = Y/ (X+Y) x 100, where X=2 (numerator) and Y=1 (denominator).

  • So, for odds of 2/1, the equation is P = 1 / (2+1) x 100, which is 1 / 3 x 100, which equals 33% probability.
  • For odds of 500/1, it’s P = 1 / (500+1) x 100 = 0.1996% or 0.20% to 2 decimal places probability.

Here are some typical odds converted into probabilities of winning based on the same formula:

  • 10/1 odds = 1 / 11 = 0.09 or a 9% chance of winning.
  • 4/1 odds = 1 / 5 = 0.20 or a 20% chance of winning.
  • 2/1 odds = 1 / 3 = 0.33 or a 33% chance of winning.
  • 1/1 odds = 1 / 2 = 0.50 or a 50% chance of winning.
  • 1/4 odds = 4 / 5 = 0.80 or an 80% chance of winning.

So, you can now see just how easy it is, with our horse racing odds explained for dummies guide to help you out, to see how the odds show you the probability of a horse winning. And don’t worry, we were all dummies once when it came to horse racing betting; you’ll get used to this process in no time!

How To Use Horse Racing Odds To Work Out Your Winnings

Odds don’t just tell you the probability of your horse winning, they can also tell you the amount that you’ll win. And for this, out horse racing explanation needs a few more bits of horse racing jargon; stake, profit, and return.

  • Stake is the amount of your bet. When you win, stake is returned to you in addition to your winnings.
  • Profit is how much you win based on the odds of the bet.
  • Return is the total amount you received from the bookie – your stake plus your profit.

So, to work out what you’re going to win when your horse romps home, simply follow this example:

  • If you’re betting £1 on 2/1 odds, you win £2 for every £1 you put on (£3 return).
  • If you’re betting £1 on 4/1 odds, you win £4 for every £1 you put on (£5 return).
  • If you’re betting £1 on 10/1 odds, you win £10 for every £1 you put on (£11 return).
  • If you’re betting on the favourite at 1/4 odds, and you put on £4, you’ll win £1 (£5 return).

Different Odds Formats In Horse Racing Betting

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There are many different ways of showing you odds; fractional, decimal, American, Malaysian, Indonesian, and Hong Kong. However, all rely on the same use of probability. Of the formats, you will need to know about fractional and decimal odds for betting at UK and European bookmakers. The only time you would really need to think about betting using American or other formats would be if you are using specialist bookmakers based in those countries,or particularly designed for bettors of these formats. Here, with our horse racing odds explanation, we’ll simply concentrate on fractional and decimal odds.

Most UK bookmakers now give you the choice to display odds as either fractional or decimal, usually with the press of a button or a change in their settings section.

Fractional Horse Racing Odds

These are the odds you are going to be already familiar with, 1/2, 1/1, 2/1, 5/4, 11/10, etc. An easy way to think of these is that the number on the left is the profit you could win and the number on the right shows the stake needed to get this profit. So for odds of 2/1, you need to stake £1 to win £2, for odds of 1/2 you need to stake £2 to win £1. Remember that your stake is also given back to you each time.

Fractional betting odds are only shown as whole numbers. So you won’t be seeing 5.5/1 anywhere, instead, you will see odds of 11/2.

Decimal Horse Racing Odds

Decimal odds are becoming increasingly popular. They are seen to be simpler to use when dealing with the very small changes in odds that come as a result of online bookmakers wanting to have greater control of odds, changing them faster, and often with smaller increments.

Whereas fractional odds show you the amount of profit you could receive for a stake, decimal odds show you the total return you will receive for a unit of stake.

So you will see decimal odds of 2.00, 4.50, 8.25 etc. To calculate return, simply multiply the odds by your stake. So a 2.00 odds bet of £1 stake gives you a total return of £2 (£1 profit plus £1 stake). A 4.50 odds bet of £2 stake returns £9 (£7 profit plus £2 stake), and an 8.25 odds bet of £10 stake returns £82.50.

A simple way of remembering the way decimal odds work for winnings is as follows:

  • Winnings = (Odds multiplied by Stake) – Stake).
  • Return = Odds multiplied by Stake.

Odds Converters – Good Ideas Or Not?

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There are many odds converter websites and apps out there, so you may have wondered if it’s worth giving these a try. Converters are designed to let you input odds in one format and immediately show you the odds worked out in many other formats. More complicated odds converters also allow you to enter stakes and bet types and will show you your potential profit and returns for the bet.

These converters are a great aide to your betting, allowing you to easily convert odds through an app or website. However, we’d also recommend that these odds converters are no substitute for having an awareness of the nature of the odds in the first place – after all, it only takes one missed keypress and you may completely get the wrong odds, which could potentially detrimentally affect your betting.

The Issue Of Each-Way Betting And The Odds Attached

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Each-way betting in horse racing is an interesting concept, but knowing how it works requires you to know how each-way betting affects your odds. When you make an each way bet, you’re actually making two separate bets: a win bet and a place bet. This means that a £1 each-way bet actually costs you £2 in stake money. The advantage is that it spreads your bets and means the bet succeeds if the horse wins or places.

So, if we’re backing a horse at 8/1 (9.00) each way at £1 stake (£2 total stake) and he wins, both the win bet and the place bet pay out at 8/1 (9.00). Each bet makes an £8 profit and returns £9, making a grand total of £18 return.

But if he places, we also stand to benefit. The number of places paying depends on the bookie’s generosity and the number of horses in the field, but second and third is fairly standard. In this case, we’ve lost the win bet, but the place bet pays out. However, the place bet pays out at a fraction of the win bet — and that means you need to know your odds to calculate the actual winnings!

So if your horse comes second, and places pay 1/4, then that is 1/4 of those 8/1 (9.00) odds. In this example, that’s 2/1 (3.00); so you receive £2 profit, and £3 return for the place bet. But the win bet cost you £1 stake as well, so your total profit is just £1 for the pair of each-way bets.

Each way betting is a useful way for punters to spread their risk, and could enhance your own horse racing strategy. However, it’s another element that does require you to know your odds — which will hopefully now be easier to manage, having read through all of the above!

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