American odds, also known as Moneyline odds, are a type of betting odds used in sports betting. This type of odds is popular in the United States and Canada, but is not widely used in other countries. American odds are expressed in terms of a positive or negative number, which indicates how much money a bettor needs to wager in order to win a certain amount of money. A negative number indicates how much money the bettor needs to wager in order to win $100, while a positive number indicates how much money the bettor will win for every $100 wagered.
Understanding the Odds
It is important to understand how American odds work before attempting to calculate the payout. The odds are expressed as a fraction or a decimal. The fraction is read as “for every X you wager, you will win Y”. The decimal is read as “for every X you wager, you will win Y plus your original stake”. For example, if the odds are expressed as +200, this means that for every $100 you wager, you will win $200 plus your original stake.
Calculating the Payout
Calculating the payout for American odds is relatively simple. The formula for calculating the payout for negative odds is Wager x (Odds/100). For example, if you were to wager $100 on odds of -200, the payout would be $100 x (-200/100) = -$200. This means that you would receive $200 for your original stake, for a total payout of $0.
The formula for calculating the payout for positive odds is (Wager x (Odds/100)) + Wager. For example, if you were to wager $100 on odds of +200, the payout would be ($100 x (200/100)) + $100 = $300. This means that you would receive $300 for your original stake, for a total payout of $400.
Examples of American Odds Payouts
Negative Odds:
- $100 wagered at -200 odds: Payout = $100 x (-200/100) = -$200
- $200 wagered at -300 odds: Payout = $200 x (-300/100) = -$600
- $300 wagered at -400 odds: Payout = $300 x (-400/100) = -$1,200
Positive Odds:
- $100 wagered at +200 odds: Payout = ($100 x (200/100)) + $100 = $300
- $200 wagered at +300 odds: Payout = ($200 x (300/100)) + $200 = $600
- $300 wagered at +400 odds: Payout = ($300 x (400/100)) + $300 = $1,200
Calculating the Potential Profit
Once the payout has been calculated, the potential profit can be calculated by subtracting the original stake from the total payout.
Negative Odds:
- $100 wagered at -200 odds: Profit = -$200 – $100 = -$100
- $200 wagered at -300 odds: Profit = -$600 – $200 = -$400
- $300 wagered at -400 odds: Profit = -$1,200 – $300 = -$900
Positive Odds:
- $100 wagered at +200 odds: Profit = $300 – $100 = $200
- $200 wagered at +300 odds: Profit = $600 – $200 = $400
- $300 wagered at +400 odds: Profit = $1,200 – $300 = $900
The Impact of Bookmaker Margins
When calculating the payout and potential profit for American odds, it is important to take into account the bookmaker margins. Bookmakers often add a margin to the odds they offer, which means that the actual payout and potential profit will be lower than the calculated amount. For example, if the odds are +200 and the bookmaker margin is 5%, the actual payout will be $285 and the potential profit will be $185.
Conclusion
Calculating the payout and potential profit for American odds is relatively simple, once the odds are understood. It is important to take into account the bookmaker margins when calculating the payout and potential profit, as the actual payouts and potential profits will be lower than the calculated amounts.