What is Implied Probability in Sports Betting? How it impacts your betting.

On the surface, sports betting can be pretty complicated. There are many circumstances that factor into each wager, and some of the numbers can be a bit overwhelming for those who are just getting into sports betting.

However, in reality, sports betting is just a math problem. What is the implied probability that a sportsbook is offering for any given wager, and how does that compare to the actual probability of each event taking place? Calculating the “true odds” is easier said than done, but calculating the implied probability for each bet offered is a piece of cake.

In this article, we’ll break down everything you need to know about implied probability as well as how to apply it to your handicapping process. Let’s dive in.

What is implied probability?

Implied probability is one of the most important concepts to understand in sports betting. Essentially, implied probability is translating the odds listed in the marketplace – American (-110), decimal (1.91), or fractional (10/11) – into a percentage. Those percentages are the betting odds that a sportsbook places on each wager and function as the break-even point for a given bet.

For example, most bookmakers offer standard spread bets at -110 odds. If you only win 50% of your bets, that’s not going to be enough to be a profitable bettor. Because of the extra 10 cents of vig, you’re going to need to hit on a slightly higher percentage of bets to be profitable.

DraftKings Sportsbook at the WM Phoenix Open at TPC Scottsdale on Feb 9, 2024. Photo Credit: Rob Schumacher/The Republic / USA TODAY NETWORK

Using an odds converter, we can see that -110 odds translate to an implied probability of 52.38%. As a result, if you can win more than 52.38% of your bets at -110 odds, then congratulations, you’re going to be profitable. Anything less than that, and you’re going to be a losing bettor.

The more you dip into the negative odds, the higher the implied probability. Therefore, the higher percentage of bets you will need to win for potential profit:

The further away you get from +100, which is generally the odds for any bet priced as a true 50/50 proposition, the greater the percentage of bets you'll need to hit to break even. The difference between -110 and -120 might not feel like much when you’re shopping for lines, but the difference in implied probability is roughly 2.2%.

That’s significant when the margins are so thin. The best sports bettors in the world aspire to win 55-60% of their spread bets, so an extra 2.2% is massive.

It works in the opposite direction as well. When you’re looking at wagers with positive odds — i.e., bets at even money or better — you can win fewer bets but still be profitable. The breakeven point on bets with odds of +120 is just 45.45%, while that figure is just 40.0% for +150 underdogs. The bigger the potential payout, the more you can afford to be wrong.

How to calculate implied probability

With time, there are certain numbers that you’ll get accustomed to seeing. The most common odds in the betting market are -110, -115, and -120, so these will become figures that you'll have memorized after a while.

For moneylines and other wagers, the easiest way to calculate implied probability is just to use an odds converter. We have a free odds calculator tool available at Fantasy Life that can translate any wager from American odds, decimal odds, or fractional odds into a percentage form.

There's a way to do it mathematically, but there’s really no need to go into too much detail when, nowadays, there are plenty of free online tools that can calculate the implied probability for you in seconds.

You can also calculate implied probabilities for parlays. It works the same way as it does for spread bets: Take the odds for the parlay, put it in an odds calculator, and compare the implied odds to the true odds.

How to use implied probability in sports betting

Once you know how to properly calculate implied probability, it becomes much easier to decide on which wagers to place. If you can calculate the true odds of a given sporting event, you can simply compare them to the implied odds to determine which bets offer the most value. The bigger the difference between the true odds and the implied odds, the bigger the value there is on that bet.

Of course, calculating the likelihood of an event to take place isn’t easy. For example, if you like a side in an NFL game, it’s difficult to handicap whether or not that event has a 55% chance of happening or a 60% chance. There are tools that can help – sites like Unabated and Paydirt DFS have excellent simulators – but it’s still an uphill battle.

Personally, I find that calculating true odds is significantly easier with certain wagers. Player prop bets are much easier than something like a side. There are fewer variables to factor in, and we often have more data to work with for player props.

DraftKings Sportsbook at the WM Phoenix Open at TPC Scottsdale on Feb 9, 2024. Photo Credit: Rob Schumacher/The Republic / USA TODAY NETWORK

You can repeat this process for each betting opportunity, be it traditional wagers, live betting, or attacking the futures market. It also applies to all sports, including the NFL, NBA, MLB, and others.

It’s also important to remember that even after properly calculating implied probability compared to true odds, that bet still won't be guaranteed to win. After all, that's why they call it gambling.

For example, let’s say that you find a prop being offered at -110 odds (52.38% implied probability), and you calculate the true odds of that wager winning at 65%. That’s a massive edge, and it’s one that you should almost certainly be betting. However, that still leaves a 35% chance for that bet to lose.

That’s why it’s so important to take a long-term view with betting and employ proper bankroll management. It’s also why shopping for the best line is essential for every bet you make. Just because a bet on DraftKings doesn’t grade out as a great bet, it doesn’t mean that you won’t get the odds you're looking for on FanDuel, Bet365, Caesars, or BetMGM.