I will see odds on people winning elections as 5/1 etc, but have no idea how to figure out if that means they are likely to win or not, other than through context. I have looked it up but never quite ‘get’ it. Please explain to me how it works in a way so simply that a child would understand!
In: 3
Hi!
There are two things here to understand.
The first is that betting odds speak to the payout if your bet wins. 5:1 odds in the betting world means that a $1 bet will pay $5 if your outcome happens (eg “your horse wins”)
The second is that these betting odds are made by bookies who use many data points to come up with their “odds / payout ratios”.
In the case of 5:1 odds above, the odds maker thinks that your event is likely to happen in less than 1 in 5 times if the contest were to play out. (remember the odds maker wants to make money, so they take a portion no matter who “wins”)
To the person who bet for the “sure thing” (the other side of the 5:1 longshot) gets way less of a payout.
Latest Answers