For all the millions of people who bet on horse racing throughout the season, there are a surprising number who do so without truly understanding the odds. All but the most novice bettors know that short odds mean the horse is more likely to win whereas long odds are much riskier but with a higher payoff if the horse does win.
However, using the odds to work out probability is something most people simply don’t (or can’t) do. Here you can find out how to read horse betting odds and how, using a simple formula, you can work out the probability of all your bets.
Calculators at the ready!
Using odds to calculate returns
Betting odds are expressed in the UK as numbers separated by a forward slash, such as ‘3/1’, ‘9/2’, ‘13/8’, ‘100/1’, etc. Where the odds are X/1 it is fairly easy to work out the horse’s chances and the returns on the bet.
Remember that all winning bets also return your original stake. So, a 3/1 £10 bet will pay out £40 in total if it wins: 3 + 1 =4 and 4 x 10 = 40. Where the second number is greater than one a formula is required to calculate the returns. Where the odds are X/Y, the formula goes: X + Y / Y. This figure is then multiplied by the stake to work out the returns.
A bettor makes their selection and places a £10 bet to win on a horse at odds of 13/8. To calculate his returns, he adds together 13 and 8 then divides the answer by 8, before multiplying the answer by his stake, which is 10. So, 13 + 8 = 21. Divide 21 by 8 to get 2.625, then multiply by 10. The total returns on this bet should the horse win are £26.25.
Working out probability from odds
To work out probability, another formula is used. Where the odds are expressed as X/Y, the formula goes: X + Y = Z, Y / Z x 100 = probability.
So, to find out the probability of a 7/2 bet we add together the 7 and the 2, giving us 9. We then divide the 2 by 9 to get 0.222. Multiply this by 100 and we have 22, or a probability of 22%.
In each-way betting, bettors are able to make a selection based on the horse not just winning but also placing – essentially, two equal bets with half on the win at full odds and the other half on the place at fractional odds. These are usually 1/4 or 1/5, and are decided by the bookmakers before the race.
A £10 each-way bet therefore costs £20, with £10 to win and £10 to place. If the horse wins, both bets are paid out. If the horse places, the £10 bet to win is lost and the £10 place bet is paid out at the fraction decided – at 16/1 with quarter odds, therefore, a £20 bet pays out £50 for a place or £220 for a win.
Understanding how odds and probability are calculated will help you make informed decisions about which horse to back, and how much you can afford to stake. Keep these calculations in mind, and you will give yourself the best chance of picking a horse that seems likely to win, while still keeping responsible betting in mind.
Click here to find more about how to place a bet on horse races