What Are True Odds?

illustration hand flipping coinWhen you are diving deep into your betting, finding small margins in your favour is what will ultimately make you a success. To do that, understanding the odds on offer and how they match compared to the probability of something happening, in your opinion, are key. True odds are something that can help you do that, though this is not an exact science, because in many ways, few things in betting work in a way that allows you to work these out.

True odds are essentially the correct odds that an outcome should be available at for you to bet on. For example, a market that has two possible options, both of which are entirely even (e.g. a coin flip), should offer true odds of 2.00 (evens, or 1/1).

However, the market won’t offer those because the bookmakers factor in their margin to the odds so they can make a profit. This means if you were to bet on a coin toss with a bookmaker, which is, of course, completely even, then you would more than likely see odds of 1.95 for each outcome because there is a profit built in there.

How to Work Out True Odds?

scales two coins saying yes and noWorking out true odds is not easy, mainly because there is no definite guarantee when it comes to many sporting events. If you are looking at a football game, then you can see the three teams that are playing and work out what odds you believe they should be based on your opinion, but that is just an opinion, not fact.

True odds work on facts, things that you can put a value on to work out how likely they are to happen. For example, odds of 2.00 on a coin toss are the true odds. A coin toss is completely random and has two possible options, so 2.00 is right.

Other markets may only have two options like this one, but because the outcome is based on play, not fact, the odds you think about can only be based on your opinion, again, not in fact, so they are not true odds.

Why are True Odds Different From Implied Odds?

price and value on hand drawn scalesWhen you are shopping around with your bookmaker, you will almost never see odds available that are better than the true odds. If you do, this is when you need to jump in and bet because value is on offer, but more about that shortly.

There are two reasons why you will see odds different to the true odds you work out. The first is the bookmaker margin, bookmakers have to make a profit, so they are going to put that into their odds.

For example, by lowering the coin toss odds to 1.95, the following happens:

  • Bets on heads – total £10
  • Bets on tails – total £10

Payout based on 1.95 winning odds is £19.50, and income from the bets is £20, leaving 50p profit for the bookmaker.

This is only using small figures, obviously, on real betting markets, the total spend on bets is much higher, which in turn means that the margin gives a bigger profit to the bookmaker.

For you to get true odds in this instance, the bookmaker would have to change what they are offering. For example, rather than 1.95 on both outcomes, if they offered 1.90 and 2.00 as the two prices, then you would be able to get true odds on one of the selections.

If this is a simple coin toss with the same probability of landing, then from a betting perspective, you would always choose the one that has odds of 2.00 attached to it, as you are getting the true odds in this instance.

Using True Odds to Find Value

newpaper headline against all oddsWhen betting, the key to being a long-term winner is finding value. You may have winners at bad odds and get away with it from time to time, but over the years, finding value is always about placing bets at the right odds.

Knowing what true odds are and how to understand what they actually are will help you to do this. Like we’ve already mentioned, you can’t always find the true odds on a selection, but you can with some, and if you use these markets, being switched on can help you achieve success.

What you will be able to do with true odds is work out where the value isn’t available and what markets to stay clear of. The one we’ve mentioned, with a coin toss, this is something that has a genuine 50/50 chance of being heads or tails, and there are no factors that will determine the outcome, assuming the coin is a fair coin.

For this reason, you should never take less than 2.00, so if you are looking at a market like this and being offered 1.95 or 1.90, then make sure you leave it alone. Over the course of time, if you won as often as you should (50% of the time), you would make a betting loss.

With true odds so hard to work out and sometimes not really viable for many betting markets, the best way to use them is to look at things like this, where you can rule out a bet, rather than being used to place one.

Finding value is the name of the game, true odds are a representation of chances and therefore, ideal to use when comparing probability and the odds on offer.