How Sports Betting Odds Work: The Complete Beginner’s Guide

How Sports Betting Odds Work: The Complete Beginner's Guide

Betting on anything does involve an element of luck, but when it comes to sports betting specifically there’s a bit of strategy behind it that can make your bets more favourable.

If you’re an absolute beginner to sports betting you probably feel a little overwhelmed trying to learn everything you can about odds, handicaps, and all of the bets that you can make, and you wouldn’t be wrong.

How do sports betting odds work then?

In short, betting odds show you how likely it would be that the event or outcome would occur. It also tells you how much money you’ll win if that outcome did happen, and then it’s up to you to decide just how much money you want to wager on that possibility.

This system might sound simple enough but anyone who’s tried to enter the world of sports betting and online gambling will know it’s anything but.

This guide looks at the basics of sports betting odds, as well as other terms explained like handicaps and payouts, to give you a crash course on how developing a betting strategy to go alongside the luck that’s required to win.

The Basics of Betting Odds

Illustration Of Betting Odds Formats

The whole premise of gambling or betting on anything is making a prediction about what the outcome will be.

This is true for a game of blackjack where you bet on what cards you’ll receive from the dealer, and it’s true for a horse race where you’re betting on which horse and jockey you think will take home the prize.

When it comes to sports betting specifically, a bookmaker will usually provide you with odds in the form of a decimal which represents the percentage of likelihood that the outcome will occur.

That number can look like $2.00 or $5.00 which is the amount returned to you for each $1 bet should you back a winner. It means there’s a 50% chance (at odds of $2) or 20% chance (at odds of $5).

Tote vs Fixed Odds Betting: What’s the Difference?

In Australian sports betting and racing betting, there are two different ways that a bookmaker will set their odds.

The most common method for horse racing is the tote or ‘parimutuel’ and the fixed odds method is more commonly used for sports betting.

Tote betting is lower risk for the bookmaker and is a system where all of the bets are put together in a pool.

They display approximate odds to the punters which shows what odds they’re likely to received but the exact odds are not known until after the race has started. The house takes their cut from that pool and divides the rest based on how many people ended up placing a wager.

This is common in horse racing and it means that you don’t get the precise odds until the race has started and no more bets are being taken.

Fixed odds betting is used predominantly in sports betting and it means you know the exact odds and potential payout when you make your bet.

Two punters betting on the same thing could be given totally different odds because they are constantly changing and each bookmaker offers their own odds on an event.

What Is Handicap Betting?

In the world of sports, there are often matches, games or events where one of the competitors is far more favourable to win than the others.

In order to make this enticing for bettors to still place a wager on, a bookmaker will offer a handicap on the bets, and this is common in sports events where points based systems are used.

Handicap betting, sometimes referred to as line betting, points betting or the spread is when a bookmaker gives a more even playing field by making their own advantage to a certain team or player.

They do this by adding points to the less favourable side which makes them more attractive to bet on and creates a fairer feeling game.

An example of a handicap advantage would be a football match where the bookmaker gives the underdog team a 6 point handicap advantage.

The less favourable team will have 6 points added to their score at the end of the game and if you bet the underdog with this handicap, you’ll win if those 6 points end up making a difference to the final score. Favourite backers will have 6 points deducted from the official score.

What Types of Sports Bets Can Be Made?

Sports betting is a detailed form of gambling and there are many different types of bets that a punter can make across a range of sporting events.

In addition to making a direct bet on a specific sports team or competitor who beats the others, there are some other examples of bet types and what they mean for the outcome.


Illustration Of Over/Under Betting Option

Sometimes referred to as totals betting, this occurs when you make a bet based on what the overall score will be for the game.

If you decide to bet over, you’ll need both teams to have a combined score more than that amount, and if you bet under it has to be less than.

Futures Betting

These types of bets are good for punters who know a little more about the game and want to bet using their knowledge.

A futures bet refers to something that will happen in the future, such as what team will take home the entire championship or how many games one specific team might win that season.


This is like direct betting where the bettor is making their wager based on just one outcome, like a team winning outright.

The odds will vary significantly depending on how favoured that team or player is but in some cases it can be profitable.

Proposition Betting

These are usually more for fun than anything else and could involve something not entirely related to the game being played.

For example, a proposition bet might be which team is going to win the coin toss that determines which side will go first. Or player performance bets like Over/Under points or goals.


A parlay is where more than one bet is required, and the punter must get everything correct in order to win.

The payout is considerably more but they are harder to win, with an example being choosing the outcome for 10 different football games and getting them all right in order to win.

Correct Score

The bettor must choose the exact score that both teams or players will have at the end of the match as well as the exact number of goals that it took to achieve it.

With the sheer number of possible outcomes, this is highly speculative but can also make a lot of money for the punter if they get it correct.

Horse Racing Bets: The Basics

Horse racing is the most popular type form of betting in Australia, and the system used for these types of wagers is shared among the other racing markets like greyhounds and harness.

Some people make their bets based on their name or a feeling they have about a number, but others follow the odds and do their research on horses and jockeys to determine which is the better choice.

Making a bet at an online bookmaker is pretty straightforward, but there are some simple steps to follow to start wagering on horses and other races:

  • Find the race that you want to bet on and its location, with some being country meetings and others held at larger Australian courses like Flemington or Randwick. Note the time and the code used for that meeting.
  • Choose your horse from the racing form guide, either online or in a newspaper. This can be done based on previous knowledge of a horse’s performance or jockey, or it can be totally random based on a number or name.
  • Decide what type of bet you want to make and make sure that it’s offered by your bookmaker. Place your bet by choosing how much money you want to wager on the outcome and figure out the payout should you be successful. Watch the race and wait for the results.

What Types of Racing Bets Can Be Made?

Just like sports betting, there are some types of bets that are unique to horse racing and other forms of racing.

Learning what each of them means can be overwhelming if you’re new to this type of gambling, but it’s essential to give yourself a better chance of winning.

Depending on the bookmaker, these are some of the types of bets you can place:

  • Win betting: This type of bet means you’re betting that a horse will win the race.
  • Place betting: You are betting that a horse will finish in either first, second or third place.
  • Each way betting: Half of your bet is for the win and the other half is for your horse to finish first, second and third.
  • Lay betting: A unique type of bet where you’re wagering that a specific horse won’t win.
  • Top Fluc: This is a guaranteed bet that you will get the highest price fluctuation offered for the horse while betting on the race
  • Best of the Best: This gives the punter the guarantee that they will get the best price of the three totes or the top fluctuation.
  • Exotic Bets: An entirely separate category of racing bets are called ‘exotic’ bets and include trifectas and quaddies. These are notoriously hard to win but also extremely lucrative if you do.

The Difference Between Single vs Multi Bets

The most common way to place a bet on either racing or sports is to choose just one event and one winner.

However, to increase the potential winnings and make it more challenging for the punter, you might decide to make a multi bet.

A multi bet occurs when you wager on more than just one thing, combining a number of single bets into one larger one.

Every time a certain leg of the bet is successful, the winnings from that are then placed on the next bet, which means the final outcome can earn a lot of money provided all of the legs have been successful.

The purpose of this type of bet is to make more money, as each time you add a leg to the multi bet it becomes riskier because you could lose everything you’ve made, but if you continue to win then your winnings will be greater.

These types of bets are common in both horse racing and sports, and some bookmakers even offer the chance to combine the two into one shared multi bet.

What Is Arbitrage Betting?

Arbitrage betting is a somewhat complex type of sports bet you can make, and it means you’re betting to make a profit or at the very least, not have a loss, regardless of the outcome.

This type of betting isn’t always possible for every event but it can occur when two or more differing bookmakers have different odds.

An arbitrage bet means you can’t lose money, so it can be very profitable if done correctly.

To take advantage of an arbitrage betting scenario, the punter should look for these things that might make it work for them:

Bookmakers offering disparate odds

This is the most common form of arbitrage betting and it occurs most days in the sports betting market.

Knowing how to read the contrasting odds and keeping an eye on what other bookmakers are offering is the only way to do it, so it does require some effort and research.

Bonuses or free bets

Although no longer legal to promote in Australian sports betting, punters can still take advantage of free bets or bonuses once you have signed up for a bookmaker’s account. Offers like Odds Boosts and moneyback 2nd or 3rd are enjoyed by punters with established accounts.

Mispriced odds

This is a rare opportunity but there may be times when a bookmaker presents odds that are incorrect, giving punters a chance to make money regardless of the outcome.

These types of errors are usually rectified quickly so it can be harder to take advantage of them. Some bookies will renege on the bet if it’s what is called a palpable error.

Related Questions

Bet Button On Keyboard

Sports betting can be a complex process if you’re new to it, but getting an understanding of the different terms and how the odds work is essential if you’re going to have a chance at winning.

We’ve got the answers to some commonly asked questions that bettors have regarding sports betting to improve your understanding of how it all works.

How Do Bookmakers Calculate Odds?

All bookmakers offer different odds for sports betting and these are calculated by figuring out the probability of that outcome and then subtracting the margin.

It’s common for larger bookmakers to offer better odds, but you should always do your research about who has better odds before you place a bet.

Are There Limits for How Much You Can Bet?

Each bookmaker has its own limits in place for minimum and maximum bets in sports and racing betting.

However, some governing bodies have introduced Minimum Bet Limits to ensure that online bookies take bets from punters up to a certain dollar amount depending on the location of the track.

Are There Restrictions on Australian Sports Betting?

While sports betting is completely legal in Australia, the process of ‘in-play’ sports betting is no longer allowed as it is deemed to be interactive.

Australian bettors must also only use locally regulated bookies and not offshore bookmakers, which is illegal.

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