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Fixed-odds gambling are a form of gambling next to odds offered by a bookmaker, an individual, or on a bet exchange.
Calculating fixed odds
It is usual with fixed-odds gambling to know the expected odds at the time of
the placement of the wager (the "live price"), though this category
also accommodates wagers whose price is strong-minded only after the race or
game has taken place (the "starting price"). It is perfect for a bookmaker
to price up a book such that the net outcome will always be in his favor, i.e.
the sum of all likely outcomes will be in excess of 100%. The amount of the
sums wagered in surplus of 100% represents profit to the bookmaker in the occasion
of a balanced book. This excess is known usually as an over round. In the case
of an unfair book, the bookmaker will have to pay out more winnings than what
is staked, or he will earn more than exactly expected. This may happen since
there is no way for a bookmaker to know the factual probabilities for the outcome
of competitions left to human effort, and the fixed odds so being compiled on
the basis of his personal view and knowledge.
With the arrival of internet and bet exchange betting, the likelihood of fixed-odds arbitrage actions and Dutch books against bookmakers and connections has expanded significantly. Betting exchanges in exacting act like a stock exchange, allowing the odds to be set in the course of trading between person bettors, usually leading to quoted odds that are sensibly close to the "true odds."
Types of odds offered
There are three widely-used means of quoting odds:
Fractional odds
Favored by bookmakers in the United Kingdom, incomplete odds quote the net total
that will be paid out to the bettor, must he win, relative to his stake. Odds
of 4/1 (read "four-to-one" or "four-to-one against") would
entail that the bettor stands to make a $400 profit on a $100 stake. If the
odds are 1/4 (read "four-to-one on"), the bettor will make $25 on
a $100 stake. Odds of 1/1 are frequently called evens.
Fractional odds are also recognized as British odds, UK odds or in that country, traditional odds.
Decimal odds
Favored in continental Europe and Canada, decimal odds vary from fractional
odds in that they quote the quantity that will be paid out to the bettor, multiplied
by and including his stake. Therefore, the decimal odds of an outcome are equal
to the decimal value of the fractional odds, plus one, and even odds would be
quoted as 2. The 4/1 fractional odds discussed over would be quoted as 5, while
the 1/4 odds would be quoted as 1.25. This is measured to be ideal for parlay
betting, because the odds to be paid out are merely the product of the odds
for each result wagered on. Decimal odds are also favored by betting exchanges
because they are the easiest to work with for trading.
Decimal odds are also recognized as European odds, or continental odds in the UK.
Money line odds
Money line odds are favored by American bookmakers. If the form quoted is negative,
then the money line odds are quoting how much money must be wagered to win $100
- this is done if the odds are improved than even. If the figure quoted is optimistic,
the odds are quoting how much money will be won on a $100 wager - this is done
if the odds are inferior than even. Even odds can also be quoted as $100 or
-$100. Fractional odds of 4/1 would be quoted as (+)$400, while incomplete odds
of 1/4 would be quoted as -$400.