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The Price Isn't Always Right: Why You Should
Use Implied Probability In Your Betting

Name something, anything, and there’s a good chance you’ll know roughly how much it should cost to buy – whether it’s a new TV, a second-hand car or a Big Mac and fries. Most likely, you'll be in the right ballpark at least. This means that, essentially, you know how to identify value when shopping. If you see a 50-inch flatscreen TV with ultra-HD and all the mod cons priced at £50, for example, you’d be somewhat suspicious but certainly interested in purchasing it. If the same television was priced at £999, you’d be more likely to give it a wide berth.

All of this makes it incredibly surprising just how many punters are unaware of when they are betting on value odds and just how many are taking the wrong price.

Just because you think Manchester City will win the Premier League title, that doesn’t mean you should automatically bet on them at whatever odds are offered – you walked away from the £999 TV, so shouldn’t you walk away from a price of 1/10 on City to lift the trophy? Whether it's a short price favourite or a long-odds underdog, understanding the value in your bets is key to long-term profitability. The use of promotions like free bets and the bet 10 get 30 offer from Betfair still require you to know the true price of a team or horse. The 'bet £10' part of the promo is coming out of your bankroll, ultimately, so it makes sense that you give yourself the best chance of winning before you can enjoy the £30 pay-off.
It's understandable, given how confusing fractional odds can be to the untrained eye – even the decimal prices used in Europe don’t always make it easy to figure out if you’re getting value or not. And so the use of another, more user-friendly, set of numbers is advised.

It's why more and more punters are turning to implied probability in calculating their bets.

What Is Implied Probability?

When odds-compilers offer their prices to the public, they have undertaken a deep dive into all the numerous variables that determine the outcome of a football match, horse race or whatever it might be – form, conditions, quality of opposition and so on.

Those quantitative numbers and qualitative opinions feed into their betting odds, and every price has a matching implied probability to go with it.

So, when a bookmaker offers odds of 1/100 on something to happen, they are implying that it is almost a certainty – in contrast, odds of 300/1 suggest that the selection has next to no chance of winning, although as The Mirror reported winners at such lengthy odds are not completely uncommon.

For each fractional odd there is a representative implied probability. So let’s say Erik ten Hag's Manchester United are playing against Southampton, and they are priced at 4/5. We can infer that the bookmakers believe they will win this game in five out of nine attempts, which is an implied percentage of 55.5%.
We can work out the implied probability by dividing our key number by the total of both sides of the fraction (e.g. adding up the numbers to the left and right of the fraction symbol). You can try it yourself – 1/5 becomes 83% (five divided by six), 1/2 becomes 66% (two divided by three), 11/10 becomes 47% (ten divided by 21), 15/8 becomes 34% (eight divided by 23) and so on.

Then comes your betting analysis based on your calculations. Let's take a real-world example - Chelsea (2/5) are playing Leicester City (6/1), with the draw priced at 4/1. And so the implied probabilities are Chelsea to win at 71%, Leicester to triumph at 14% and the draw has a 20% chance - remember, the numbers will add up to more than 100% due to the bookmakers' over-round. Having decided upon your own percentages before looking at the odds, where does the value lie?

Transforming fractions into percentages will improve your understanding of what the odds you are betting on are, and this knowledge will help you spot value opportunities – and steer clear of those that aren’t – in the future.y.

Even if maths isn’t your strong suit, grab a calculator or your phone and get to work… in the long run, you might just see a difference in your betting.
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