- Implied probability refers to the overall likelihood of a betting outcome according to the listed odds.
- Bettors can use formulas to calculate the implied probability directly from the odds.
- It can be a valuable addition to help you better understand what the odds are telling you.
Once you have a basic understanding of sports betting odds, it’s easy to determine the favorite or underdog in a game and the favored option among a range of choices. You can also go a step further by determining the implied probability based on the listed numbers. So, what is implied probability? Let’s take a look at everything you need to know.
What is implied probability in sports betting?
To determine the implied probability of a sports bet, you can use a formula to convert the odds into percentage form. It tells you the likelihood of an outcome in relation to the other options, at least as far as the numbers are concerned. Implied probability can help you place the odds in a better perspective and improve your overall understanding of betting markets.
How to calculate implied probability on a bet
Sports betting implied probability is calculated by converting betting odds into percentage form. The most common application is for a two-sided moneyline bet. As an example, let’s consider the pregame betting line for a random NBA game.
For this contest, the Celtics are seven-point home favorites in a game with the over/under of 206 points. Boston is also a considerable favorite on the moneyline. So how likely is a victory for the home side? We can take the moneyline odds for the game and plug their absolute values into the following formulas.
Negative odds: odds / (odds + 100) * 100 = implied probability
Positive odds: 100 / (odds + 100) * 100 = implied probability
Here’s what the results look like when we add in the moneyline odds for this game.
- Celtics -310: 310/(310+100) * 100 = 75.6%
- Heat +245: 100/(245+100) * 100 = 28.9 %
While we can already tell that the Celtics are pretty sizable favorites by looking at the odds, factoring out the implied probability helps to place the contest into an even better perspective. Based on our results, the odds believe that Boston has a slightly better than three in four chance of pulling out the victory.
If we add the two results together — 75.6 plus 28.9 — we come up with 104.5. So why isn’t it an even 100? That’s thanks to the vig the sportsbook is charging. It’s built into the odds automatically, so it’s not automatically visible on the moneyline.
That’s another benefit of calculating the implied probability: you can see when the vig is in line and when the sportsbook is taking even more of an advantage.
Beyond doing the math for yourself, you can also find various online handicapping calculators with a simple web search. You simply have to plug in the odds to find the result.
Is implied probability useful for other bets?
Implied probability is most commonly used for moneyline odds, but it can be applied elsewhere. That said, the value of the results will vary based on the bet type. For example, a standard spread or total bet begins with odds of -110.
The odds may fluctuate in response to betting volume, but they’ll generally stay in very close proximity to the baseline. If we calculated the implied probability for these wagers, we’d find that the likelihood of either outcome is close to a coin flip.
For areas in which it can actually be useful, look towards bets that have a range of choices, such as in the futures markets for various sports or player props. As an example, let’s consider this NBA prop with several different options to consider.
The player prop bar is set at 20+ points, and there are odds for a total of nine players to make it happen. Naturally, it’ll take some doing to calculate all of the implied probabilities, but it can be a worthwhile exercise. Here are the results.
Once again, the odds clearly indicate which players are likely to turn the trick along with those that are not. However, translating the odds into percentage form helps us to visualize the actual likelihood of it happening for all of the players in the field.
Interpreting implied probability results
No matter what the odds say, anything can and will happen on the field of play. Upsets happen all of the time in the world of sports. Said another way, the implied probability is far from a guarantee of what’s going to happen.
Despite that, the results of the calculations are still incredibly useful. After you’ve worked through it enough times, you’ll actually be able to start translating the moneyline odds into a ballpark range of what’s expected to happen.
For example, a moneyline favorite with odds of -400 has an implied probability of 80% to win the game. If the two teams squared off five times with all of the current factors remaining the same, then the favorite can be expected to win four of the contests.
That’s a pretty healthy favorite, and one you may be able to bet with confidence as a result. Unfortunately, the odds don’t translate into much in the way of profit potential. If we dip down to a favorite at -200, then the implied probability goes to 66%, or two out of three.
Again, this is a pretty strong favorite, and the potential return is also at least a little more appealing. On the opposite end, an underdog at odds of +150 has an implied probability of 40% to win the game.
In other words, an upset win isn’t really far out of the realm of possibility. Implied probability can help us to not only visualize the actual likelihood of outcomes, but also prove to be a great help when it comes to spotting value in the odds.
Implementing implied probability into your strategy
Calculating implied probability is a useful exercise for each game that you plan to bet on. A glance at the odds tells a good part of the story, but the calculation of the actual likelihood of what’s going to happen helps to place the contest in an even better context.
For one approach, think of a busy slate of games for a top sport. If we use the NFL as an example, a week in which no teams are on bye means that there are a total of 16 games. By looking at the odds and implied probability for each matchup, we can split the games up into tiers to further assess where our funds are best allocated.
- Heavy favorites: Moneyline odds of -200 or greater. The implied probability is at least 66%.
- Clear favorites: Moneyline odds of -150 to -199. The implied probability is at least 60%.
- Slight favorites: Moneyline odds of -120 to -149. The implied probability is at least 54.5%.
- Potential toss-ups: Moneyline odds of -101 to -119: The implied probability is 54.3% or less.
Armed with this information, we can determine our own personal sweet spot on the betting scale. For those who prefer a more conservative approach, heavy favorites could be the ticket, but keep in mind that the actual returns on winning bets will be muted.
If you’re interested in better returns, then slight favorites, toss-ups, and underdogs that you have built a strong case for are the way to go. While calculating implied probability is an extra step of the research process, it can prove to be a valuable addition to your routine.
How implied probability helps with sports betting
Outside of the time commitment, there just aren’t any downsides to factoring in the implied probability for your wagering decisions. On the benefit side, it’s a different story. Here are some of the ways that implied probability can help with your betting game.
- Translate the betting odds into the actual likelihood of individual outcomes.
- Spot instances where the sportsbook may be over or under pricing lines.
- Improve your understanding of sportsbook odds.
- Gain a better perspective on the closeness of a matchup.
- Be better equipped to spot value opportunities in betting odds.
- Have a clearer visualization of what’s expected to happen.
Implied probability is not the golden ticket to sports betting answers. However, it is a valuable tool to add to the belt as it can ultimately help you to improve your game, and hopefully your long-term results to boot.