Calculating Implied Probability
Calculating implied probability. Let’s take the classic coin flipping example where we know the actual probability is 50%: a -110 bet on Heads. This calculation is slightly different for minus (-) odds versus plus (+) odds.
Implied Probability = (-1*(Odds)) / (-1(Odds) + 100)
Which looks like:
Implied Probability = (-1*(-110)) / (-1(-110) + 100)
52.4% or 0.524 = 110 / 210
That number should be familiar to experienced bettors as the break-even winning percentage. Because -110 on one side of a bet usually means -110 on the other side too, we can add all the probabilities (in this case another -110 probability) to determine the sportsbook’s edge.
(Heads Probability + Tails Probability) – 1 = Sportsbook’s Edge
(0.524 + 0.524) – 1 = 0.048 or 4.8%
Ideally you should be looking for bets with the lowest sportsbook edge you can. It is a subtle edge in sports betting, but remember the difference between winning at 52% and 53% is a world of difference.