Where Do Sports Odds Come From?

When you are ready to bet at an online sportsbook, there will be plenty of different games and events to pick from on the odds board. For each game, there will also be a wide range of bets you can place, all of which will have specific odds attached.

At first glance, the uninitiated may think sports betting odds are just a series of numbers pulled at random. That’s far from the case. There are a lot of moving pieces behind the scenes before odds are released to the betting public.

All odds are set by each individual sportsbook. They can tell you the most likely outcome, as in which side is the favourite or underdog. Plus, they can have a direct impact on winnings.

American vs. decimal vs. fractional odds

How do sports betting odds work? There are three major formats you’ll come across for sports betting odds. Here’s what you need to know about each.

American sports betting odds

This is the default odds listing for US sportsbooks, but you’ll come across it elsewhere. The odds are three-digit numbers that can be negative for favourites or positive for underdogs.

Decimal sports betting odds

In Canada and Europe, sports betting odds are most often listed in decimal form. There are no negative values here. Instead, the lower value of the two sets of numbers indicates the favoured side.

  • Ottawa Redblacks  55
  • Toronto Argonauts  57

Fractional sports betting odds

Over in the UK and Ireland, sports betting odds are expressed in fractional form. The lower of the listed values indicate the favourite. This style is also commonly used for horse racing betting.

  • Green Bay Packers  3/2
  • Buffalo Bills  2/1

At the legal Ontario sportsbooks, you’ll typically see American and decimal odds used. We’ll keep our focus on those two formats for the remainder of our examples.

How to read a sports betting line

At online sportsbooks, there will be a main betting lobby filled with popular upcoming games and events. You can zero in on exactly what you want by clicking on the tab for that sport, such as NHL or CFL.

For the team sports, the default game listing in the vast majority of spots will have the odds for the main pregame bets: moneylines, spreads and totals. Here’s an average game line for an NHL game with American odds.

Ottawa Senators+180+1.5 (+105)Over 5.5 (-110)
Toronto Maples Leafs-220-1.5 (-115)Under 5.5 (-110)

The negative odds on the moneyline point to the Leafs being the favourite. The puck line is the spread bet for hockey. For spreads and totals, you’ll see two numbers: the line set by the book and the odds for the bet. Here’s the same game with decimal odds.

Ottawa Senators2.8+1.5 (2.05)Over 5.5 (1.91)
Toronto Maples Leafs1.45-1.5 (1.87)Under 5.5 (1.91)

Moneyline odds on the Leafs have the lower value. That makes them the favourite. If you bet on the puck line, you can take Toronto minus 1.5 goals. You can also place an over/under bet on the listed total, which is set at 5.5 goals. 

More information on common bet types

Who makes sports betting odds?

Sports betting odds are set by the individual sportsbooks. That said, there is some copycatting across the industry. When one book is first to market in certain sports, other sportsbooks may follow with very similar odds.

There’s a team behind the scenes that’s responsible for setting the lines. Computers and algorithms do a lot of the heavy lifting. If you can think of a variable that could possibly impact a contest, there’s a good chance it’s accounted for.

Before the odds are released to the public, everything is verified and double-checked. Once the oddsmakers are happy with the output, the numbers go out. Betting action follows, and you can expect to see some movement in the odds from that point.

How are sports betting odds set?

If you look at sports betting odds, your mind may well turn to various factors that could impact the contest one way or the other. Before the odds hit the board, oddsmakers are doing the same thing.

They have a ton of data at their disposal, ranging from simple stuff like current stats to overall historical trends between the opponents. It’s all about the sum of the parts, but some factors just carry more weight than others.

Examples include the team power-play efficiency in an NHL game and the average goals scored when the two sides meet. After everything has been accounted for, the odds on the most likely outcomes are calculated, along with any spread, total or prop betting numbers.

Do sports betting odds work the same for all bets?

We already covered how the odds work for the big pregame bets, but there’s a lot more to see on the wagering menu. There are props available for games and events, futures markets for season long-outcomes, live betting once the contests begin and much more.

When you come across a wager with two choices attached, the odds will work like what you would see in a standard moneyline bet. For example, the odds for a basic NHL prop might look like this.

Total Points for Auston Matthews in the GameAmerican OddsDecimal Odds
Over 1.5+1202.2
Under 1.5-1401.71

Just like a moneyline bet, you’ll typically see a favourite and underdog as the two choices. But there are times when the numbers will be in a really tight range. In that case, oddsmakers are indicating they view the result as a toss-up.

It’s the same concept when we’re talking about two-sided futures bets or live betting on two different choices for the same wager. When you add in more selections to the equation, the odds are naturally different. For example, if you decided to make a prop bet out of three moneyline choices for upcoming CFL games, the odds for the bet would be based on what the numbers are for each of the individual games.

CFL Moneyline ParlayAmerican OddsDecimal Odds
Blue Bombers over Elks-1651.61
Tiger-Cats over Lions-1801.56
Roughriders over Alouettes+1352.35
Total Parlay Odds+4875.87

Many futures bets and certain props have a wide range of choices to consider. When this is the case, there will be odds for all of the available selections, typically listed in descending order. For example, odds on Stanley Cup favourites might look like this:

To Win Stanley CupAmerican OddsDecimal Odds
Colorado Avalanche+5006.0
Vegas Golden Knights+7008.0
Tampa Bay Lightning+7008.0
Toronto Maple Leafs+90010.0

While sportsbook odds may seem confusing at first glance, reading the board isn’t all that daunting once you have the basics down. After gaining a little bit of experience, you’ll be able to read the odds with confidence and know what they’re telling you.

Are sports betting odds different by sport?

For the major team sports, odds work in the same fashion. They all use moneylines, spreads and totals as the main pregame bets. You’ll find props, futures and live betting opportunities as well. The most notable difference comes in the spread.

Betting on a football game or basketball use a standard point spread. The numbers can vary from as little as a point into the double digits. Other sports use a spread concept, but the name and values vary.

Major individual sports like golf, tennis and NASCAR use the same standard for futures market odds, such as for the winners of Grand Slams, Majors or the Daytona 500. When it’s a head-to-head, prop or live bet in those sports, the same concepts that we’ve outlined apply. The same holds true for MMA, boxing and other niche sports.

Why do sportsbook odds vary?

If you spend any time comparing odds at multiple sportsbooks, you’ll notice that the numbers can be different for the exact same contest. While the market as a whole tends to be within range on games and events, you’ll see variance as you shop around.

This could simply be due to one operator pricing the contest differently than competitors. For example, one sportsbook may have the moneyline favourite in an NHL game listed at -120/1.83 while another has the same team at -125/1.80.

While it may not seem like a big deal, it can impact your bottom line. We’ll explain how in a bit. Odds can also shift at sportsbooks in response to betting volume. If one side of the wager attracts the bulk of the action, operators will tweak the numbers to try to level the action out. When you see distinct movements in the numbers after the initial release, that’s a good clue that more volume is coming in on one side over the other. The odds can also be impacted by news that comes out after the release, such as weather concerns or injury to a key player.

The differences that you see are actually a good thing. Sports bettors should always take the time to shop around before placing bets. Since payouts are based on the odds at the time of bet placement, hunt down the best possible price.

Are the best sports betting odds in Las Vegas?

Legal sports betting has been permitted in Las Vegas for decades. It came to be known as the “Sports Betting Capital of the World” as a result. The numbers released by the oddsmakers out in the desert were considered the gold standard.

These days, the story is changing. Sportsbooks out in Sin City remain very good at what they do, but they’re not the only option anymore. As sports betting is legalized in more and more markets, oddsmakers in those locales are dishing out comparable odds.

You can certainly check out the Vegas odds on the games you want to bet on for reference. But know that you’ll find similar numbers much closer to home. It’s a very competitive industry, so operators need to be on point with what the market will support.

Are sports betting odds fair?

The answer to this can be a little on the subjective side. What appears to be outstanding odds on a game to one bettor may seem like a bad deal to others. You are the ultimate judge of what you consider fair odds.

That said, the market as a whole can speak volumes. There’s a reason why there aren’t too many off-the-wall numbers that are completely out of range. If and when that happens, sharp bettors will pounce. Additionally, those offering unfavourable sports betting lines just won’t attract as much action as their competitors. In essence, bettors have their say on what’s fair by placing their wagers. If the book winds up lopsided, they’ll adjust to bring the action back in line.

For individual bettors, the question of fairness in the odds should also be based on your comfort level. If you feel that the potential return justifies the risk, then place the bet. If not, take a pass and simply wait for the next appealing opportunity.

Do sports odds reveal the most likely outcome?

When the odds are in the exact same range, such as -110/1.91 on an NFL or NBA spread or total bet, the numbers won’t do you much good in terms of an implied outcome. In those cases, bettors are tasked with figuring out which side is the most likely to cover or whether the total will go over or under.

It’s a different story with moneyline odds, which tend to have a distinct range between the two sides. You’ll come across a pick’em game here or there in which the odds are exactly the same on both sides. But they’re typically different, such as:

 American OddsDecimal Odds
Montreal Canadiens+1552.55
Toronto Maple Leafs-1751.57

Just by looking at the odds, we know that the Leafs are the favourite to win the game. But how does that translate in terms of the likely outcome? Enter the concept of implied probability, which can be calculated directly from sports betting odds.

There are plenty of online handicapping calculators that do it for you. But seeing it in action can help you gain even more of an appreciation for the odds and how they work. Here are the formulas to use based on the odds format and the numbers.

  • Decimal odds: (1/decimal odds) * 100 = implied probability
    • 1 / 1.57 * 100 = 63.6%
    • 1 / 2.55 * 100 = 39.2%
  • Negative American odds: Odds / (Odds + 100) * 100 = implied probability
    • 175 / (175 + 100) * 100 = 63.6%
  • Positive American odds: 100 / (Odds + 100) * 100 = implied probability
    • 100 / (155 +100) * 100 = 39.2%

If you add up the implied probability for the two sides of our example bet, then 63.6 plus 39.2 equals 102.8. So how can the possible outcomes add up to greater than 100%? That’s thanks to the vig, also known as juice.

This is the amount that sportsbooks bake into the odds as a cost for facilitating the wager. They’ll make money no matter what thanks to the vig. Add implied probability into your research routine. You’ll not only get a better understanding of the odds but also see where the book is over- or under-charging on the vig.

How do sports betting odds impact payouts?

The amount of your return on winning bets is based on the odds at the time that you place your bet. Before you place a wager at an online sportsbook, your potential payout will be displayed based on your stake.

Once again, there are also online handicapping calculators that do the heavy lifting for you. But knowing how to figure out the answer can make a big difference as you shop around. There are a few easy workarounds to remember.

  • Decimal odds: the number equals how much you’ll get back for every $1 wagered.
    • $1.91 at odds of 1.91, or $191.
  • Negative American odds: number equals what you have to bet to win $100.
    • $140 at odds of -140.
  • Positive American odds: number equals what you get back for $100 winners.
    • $150 at odds of +150.

If you want to know the exact return, there are also formulas to follow for the answer.

  • Decimal odds: Stake * (Odds – 1)
    • $100 * (1.57 – 1) = $57
  • Negative American odds: Stake / (Odds/100)
    • $100 / (150/100) = $66.67
  • Positive American odds: Stake * (Odds/100)
    • $100 * (150/100) = $150

By knowing how to figure out what you’ll get back, you’ll gradually learn how to spot potential value opportunities just by reviewing the odds board. It’ll also help you to gain an appreciation for those ticks of difference between various books.

The difference between -110/1.91 and -105/1.95 might not seem like all that much, but it can absolutely add up over the long run. Calculating payouts and shopping for the best odds are two more very welcome additions to any sports betting routine.

Key takeaways on sports betting odds 

Sports betting odds are set by sportsbooks for the games and events that they make available for wagering. The odds can tell you the more likely outcome as well as how much of a return you can expect for winning bets.

Odds can be expressed in American, decimal or fractional form. At the legal Ontario sportsbooks, you’ll mainly be dealing with the first two. The odds are calculated by oddsmakers in advance of their release. While figuring out the optimal numbers, the team behind the scenes is factoring in anything that may impact the contest at hand. Computers and algorithms do much of the heavy lifting, but there’s also a human touch involved.

Once the odds come out, the betting public starts to weigh in. The numbers can adjust from there in response to betting volume and other factors. Sports bettors should always take the time to line shop for the best odds before placing bets.

An odds board can seem very confusing at first glance, but there’s actually plenty of rhyme and reason to what you see. If you put in a little bit of practice time and study up on what the numbers mean, you can be up to speed in no time.