The Gambling Odds Edition

Ryan Anderson (RJA) is a freelance marketing exec based in Atlanta, GA. He’s written WITIs about counties, statistical paradoxes, green hydrogen, sound in sports, and more. He has strong thoughts about how to build systems that enable performance and growth. 

Ryan here. It’s almost impossible to watch a sports event on TV and not be overrun with gambling promotions. Over the last decade, America’s sports leagues have gone from treating any hint of gambling as pure anathema to proudly partnering with the largest casinos and sports betting companies. Walk around any arena today, and you’ll see promotions for various sports betting and daily fantasy apps, while almost every commercial break includes at least one ad for those same companies.

There’s now even a secondary broadcast on TruTV, during the NBA play-in games,  that forgoes the traditional play-by-play and color commentary for a non-stop conversation around the gambling odds. 

Why is this interesting? 

This has all unsurprisingly coincided with some very negative news stories. Two major professional leagues are in the midst of gambling crises.

Shohei Ohtani, the best baseball player of his generation, was the center of an investigation after his interpreter was arrested and charged with stealing $16 million from Ohtani to pay off gambling debts. How much Ohtani knew about this and when is not clear yet, but no league wants its face to be attached to a gambling scandal.

The NBA meanwhile has it even worse. Jontay Porter, a player for the Toronto Raptors, was just banned from the NBA for betting millions of dollars over the past two seasons, including some very suspicious activity related to his individual performance in games.

But the discussion I want to have today isn’t about the merits and morals of sports betting. Instead, given my previous appearances here as the math-y guy with a favorite statistical paradox, I want to talk about the different ways that sports betting odds are represented in America, compared with the rest of the world.

To state the obvious: Casinos and sportsbooks make their money by paying out less in winnings than they take in as bets. Simple math, and a good business if you can get in it. The main way they do this is by setting up the payouts in their favor.

Here, for example, are the odds as displayed (in those grayed-out boxes) on ESPN for a variety of Major League Baseball games this week.

Let’s look specifically at the first game, the St Louis Cardinals (STL) against the Oakland Athletics (OAK). Here, ESPNBet (and yes, that’s a thing) has the money line odds (referred to here as “ML”) at -145 for STL and +125 for OAK. 

Betting the money line is as simple as picking who will win, and the odds tell you what your payout will be as a percentage of your bet. In this instance, -145 means you need to bet $145 in order to win $100, in addition to getting back your $145 wager. +125 means you will win an additional $125 if you bet $100, for a total payout of $225. A gambler doesn’t have to bet exactly those amounts, it’s just a representation of the winnings as a ratio of their wager.

Quick math break: this means you need to win about 59.2% (calculated as 145/(145+100)) of the time you bet on St Louis in order to break even. On the other side of the bet, you would need to win about 44.5% (calculated as 100/(100+125)) of the times you bet on Oakland to break even. You may notice those 2 numbers don’t add up to 100%, but to 103.7%. That extra 3.7% is known as the vigorish, or vig, and is why the house never loses as long as they do a good job of balancing the bet volume.

This format (of +125 and -145) is known as American odds. And while they are what you’ll see on the betting sites here, they are far from universal. There are 3 major odds systems used throughout the world, and boy are they confusing. 

As my friend Deva said:

“If you can figure out that -160, 1.625, and 5/8 are the same, you can accomplish anything”

So, let’s get you ready to take over the world.

American Odds

Again, these are what most readers of WITI are likely to see. The -160 means that you need to risk $160 in order to win an additional $100. 

If the odds have a plus sign, that means your winnings would be greater than your initial wager. If they are negative, that means your winnings would be less than your wager. 

British (Fractional) Odds

If you live in England or Ireland you are much more likely to see gambling odds represented as fractions. With fractional odds, the ratio is equivalent to your potential payout (the numerator) and your wager (the denominator), and then reduced to the smallest version of that fraction. At 5/8 odds, you could win $5 for every $8 that you bet.

Admittedly, it’s much easier to calculate your potential winnings with British odds than American odds. If you bet $160 at 5/8 odds, you could win an additional $160 * (5/8) = $100.

European (Decimal) Odds

The final frontier of gambling odds are decimal odds. These are commonplace the rest of the world over, and are very similar to British odds with one major difference: they include the return of your wager in the representation.

Winning a sports bet entitles you to get the amount you bet back, and then your winnings on top of that. American and British odds don’t account for that in their representation of the wager, they only show you the additional payout. 

European odds, in contrast, show you the full amount of money that will be returned to you if you win. Converting between British and European odds is very simple; simply convert the fraction into a decimal and then add 1, representing your initial wager.

So 1.625 odds means that a bet of $160 would return $160 * 1.625 = $260, but since European odds include paying back your original bet your winnings are actually $260 - $160 = $100.

The lesson here is that lots of people like to take something common and make it their own. And if you really don’t feel like doing this kind of math, don’t worry—there are any number of free odds converters available on the internet. (RJA)

Quick Links:

• Saying the same thing in different ways applies to way more than just gambling odds. Untranslatable is a very fun website where you can look at idioms and expressions from different cultures across the globe. (RJA)

• Nate Silver has been digging into the Shohei Ohtani situation and raises a very important point in his latest post. How much did Ippei Mizuhara actually lose? (RJA)

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Thanks for reading,

Noah (NRB) & Colin (CJN) & Ryan (RJA)

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