Understanding the Difference between Probability and Odds

Posted: September 2, 2013 by Beaner in Sports betting
Tags: , ,

The terms ‘probability’ and ‘odds’ are two common ways used to describe how likely it is that a certain event will happen.  In gambling, both terms tell you how likely you are to win, but they do this in different ways.

This difference is important to understand when gambling or punting, as different forms of gambling and casino games can often use either system to express the expected payouts.

Probability is the number of winning outcomes divided by the total number of possible outcomes.

Odds compare the number of losing outcomes to the number of winning outcomes (in ratio form).  Odds can also be expressed both ‘for’ and ‘against’, where the odds ‘against’ the event in question is simply a reversal of the odds ‘for’.

 

Example 1

Think of rolling a dice and hoping for a 4 to come up. In this case there are six possible outcomes on the dice, one winning outcome and five losing outcomes.

• The probability of rolling a 4 would be shown as 1/6, or one in six (16.67%).

• The odds for rolling a 4 would be shown as 1:5, or one to five.  The odds against rolling a 4 would be shown as 5:1, or five to one against.

 

Example 2

Another example is drawing an Ace out of a deck of cards. In this case there are 52 possible outcomes in a deck of cards, four winning outcomes and forty-eight losing outcomes.

• The probability of drawing an Ace would be shown as 4/52 = 1/13 or one in thirteen (7.7%).

• The odds for drawing an Ace would be shown as 4:48 = 1:12, or one to twelve. The odds against drawing an Ace would be shown as 12:1, or twelve to one against.

Beaner

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Comments
  1. omahared says:

    Great post. I find people often confuse odds with chance. 40% odds. 6:1 chance, etc.

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