What is implied probability and how do you calculate it?
Implied probability is the chance of an outcome that a set of odds suggests. For decimal odds, divide 1 by the odds: 2.00 implies 50% and 1.25 implies 80%. Bookmaker prices include a margin, so the implied probabilities in one market add up to more than 100% and need scaling down for a fairer estimate.
Why does implied probability matter?
Odds are a price, but they are also a statement about likelihood. Turning them into a percentage lets you compare a price with your own view, or with a model’s estimate, on the same scale. If you think a football (soccer in the US) team has a 60% chance of winning and the odds imply 50%, you disagree with the market, and you can see by how much.
It is also the only fair way to compare different markets on the same match, which the guide on comparing betting markets covers in detail.
How do you calculate it from decimal odds?
Divide 1 by the decimal odds, then multiply by 100 for a percentage:
| Decimal odds | Calculation | Implied probability |
|---|---|---|
| 1.25 | 1 / 1.25 | 80.0% |
| 1.50 | 1 / 1.50 | 66.7% |
| 2.00 | 1 / 2.00 | 50.0% |
| 3.00 | 1 / 3.00 | 33.3% |
| 5.00 | 1 / 5.00 | 20.0% |
| 11.00 | 1 / 11.00 | 9.1% |
Shorter odds mean a higher implied chance. Going the other way, the fair decimal odds for a probability are 1 / probability: a 60% chance corresponds to 1 / 0.60 = 1.67.
How do you calculate it from fractional and American odds?
Fractional odds such as 5/2 show profit relative to stake. For odds of a/b, the implied probability is b / (a + b). So 5/2 gives 2 / (5 + 2) = 2 / 7 = 28.6%, and evens (1/1) gives 1 / 2 = 50%.
American odds use two formulas:
- Positive odds such as +150 show the profit on a 100 stake. Implied probability = 100 / (odds + 100). So +150 gives 100 / 250 = 40%.
- Negative odds such as -200 show the stake needed to make 100 profit. Implied probability = odds / (odds + 100), using the number without its minus sign. So -200 gives 200 / 300 = 66.7%.
As a check, +150 is the same price as decimal 2.50, and 1 / 2.50 is also 40%.
What is the bookmaker’s margin?
Add up the implied probabilities of every outcome in a market and the total is usually above 100%. The excess is the margin, sometimes called the overround or vig. It is how a bookmaker builds in an edge.
Take a hypothetical 1X2 market:
| Outcome | Decimal odds | Implied probability | Margin removed |
|---|---|---|---|
| Home | 2.10 | 47.6% | 45.4% |
| Draw | 3.40 | 29.4% | 28.1% |
| Away | 3.60 | 27.8% | 26.5% |
| Total | 104.8% | 100.0% |
The raw total is 1 / 2.10 + 1 / 3.40 + 1 / 3.60 = 0.476 + 0.294 + 0.278 = 1.048, so the margin is about 4.8%.
How do you remove the margin?
The simplest method is to divide each implied probability by the total. For the home win: 0.476 / 1.048 = 0.454, or 45.4%. Do the same for the draw (0.294 / 1.048 = 28.1%) and the away win (0.278 / 1.048 = 26.5%), and the three now add up to 100%.
This proportional method spreads the margin evenly. In practice bookmakers often load more margin onto longer-priced outcomes, so other methods exist, but proportional scaling is a reasonable first estimate.
What does implied probability not tell you?
- It is not the true chance. It is the market’s price, margin included. Prices can be wrong, and they move with team news and money.
- It says nothing about value on its own. Value comes from comparing it with a separate estimate, such as a confidence score.
- It does not simply multiply across a ticket when legs are linked. Two picks from the same match are correlated, as explained in the guide on combined probability.
Where WIN Betting fits
WIN Betting, a football predictions app for iOS and Android made by MICOM TECH, shows a confidence score with each pick: the app’s own probability for that outcome. Alternate markets are ranked by that probability too. Setting it next to the implied probability of the odds you see is a quick way to judge whether a price looks short or generous. The app is not a bookmaker and does not set odds.
18+. Betting involves risk; no prediction is guaranteed. If gambling stops being fun, visit BeGambleAware or call 1-800-GAMBLER in the US.