**Part Two of our Betting Terms Explained series looks at the differences between fractional, decimal and American odds and how to calculate the return for each.**

One of the most important things for anyone new to betting is to understand how odds work. Odds are essentially a way to represent how much you stand to profit should your bet win. The three most common ways to quote or display odds are fractional odds (5/1), decimal odds (6.0) and American odds (+500).

Fractional odds are the more traditional way to refer to the price of a bet. This is especially true for more long odds types of bets. Decimal odds have come to the fore a lot more lately, especially with the proliferation of online gambling. American odds are unsurprisingly the most common in North America and are rarely used outside of the USA, Mexico and Canada. These all mean the same thing, they are just different ways of describing the payoff of the bet. Confused? Don’t worry, we’ll explain everything.

**Fractional Odds**

Fractional odds are the standard odds used in the U.K. and Ireland. They are written as one number (what you will win) then a slash (/) and then another number (your original stake). So odds of 5/1 (spoken as “five-to-one”) means a $1 bet would win $5 profit if your selection is correct. If this bet loses then you simply lose your $1 stake. With fractional odds your stake is not included in the return. So in our 5/1 example your return is actually $6 ($5 profit plus your $1 returned).

Any odds where the first number is greater than the second number (so your profit is greater than the original stake) is referred to as odds-off. In reality this phrase is rarely spoken and most people will understand that “five-to-one” means 5/1. On the other hand, odds where the first number is less than the second number (so your profit is less than the original stake) is referred to as odds-on. When the odds are perfectly even, sometimes written as 1/1, this is referred to as Evens or Even Money.

When the second number is 1 (such as 4/1, 10/1 etc.) it is very easy to calculate the return. However, you will often see odds such as 13/8 or 17/20 and these are trickier to calculate. The bad news is there is no shortcut. But the good news is that you will get very good at mental arithmetic if you stick with fractional odds!

**How to convert Fractional Odds to Decimal?**

It is very straightforward to convert factional odds to decimal. Simply divide the first number by the second number and add one. So fractional odds of 2/1 are shown as 3.0 in decimal (two divided by one is two, plus one is three).

**Decimal Odds**

Decimal odds are most common in continental Europe and Asia but their use is growing worldwide, especially for online gambling. They are written as a standard decimal number, usually to two or three decimal places. This number is essentially a multiple to calculate your potential return (profit plus stake) of a bet. So if you see odds of 6.0 and you bet $1 then your return is $6 ($1 stake plus $5 profit). If you see odds of 2.5 and you bet $4 then your return is $10 if the bet wins ($4 X 2.5).

An Even Money bet is represented as 2.0 in fractional odds. You bet $1, your return is $2. Decimal odds are the most straightforward odds to use because all you need to do is multiply your stake by the odds and that gives you your total return.

Just be careful when you use these odds that you don’t confuse them with the fractional style. A bet at odds 3.0 will return a lot less than a bet at 3/1!

**American Odds**

When odds are displayed as American it can be confusing to new bettors. The simple thing to remember is that plus odds (most typically +110) show how much money you would win from a $100 bet. Minus odds (most commonly -11) show how much money you would need to bet in order to win $100. It is as simple as that.

The American gambling market has traditionally focused on NFL betting, with spread betting and points line betting the main two markets. These bets are essentially a coin toss where only one of two possible outcomes can occur. Unlike European football or soccer (where the draw is very common) or horse racing (where any number of horses could win a race), traditional American betting has focused on these binary choice bets.

**How to calculate American Odds?**

American odds have two different types of calculations. Firstly, if your bet is odds-off (where your profit is larger than your original stake) then American odds will be a positive number. This number represents how much you would win from a $100 bet. So odds of 110 (a very common price) means you would win $110 profit from a $100 bet giving you a total return of $210. This is the equivalent of 11/10 in traditional fractional odds or 2.1 in decimal odds.

Secondly, if your bet is odds-on (where your profit is less than your original stake) then American odds will be a negative number. This number represents how much you would need to bet in order to win $100. So odds of -110 (again, another very common price to see) means you would need to bet $110 in order to win a profit of $100 (giving you a return of $210). This is the equivalent of 10/11 in traditional fractional odds or 1.909 in decimal odds.

What is quite common with American odds is that once you get up to larger returns the odds switch over to the fractional style. For instance you might see some horses priced at +800, +900 and then 10/1 (rather than +1,000).

**How to convert American odds to Decimal?**

This is common question for new bettors. If the American odds are plus (e.g. +200) then you simply divide by 100 and add one. So American odds of +200 would be displayed as 3.0 in decimal. The calculation for this is *200/100 + 1*. If your American odds are minus (e.g. -110) then it is a little trickier to convert to decimal. The formula is 1 minus 100 divided by the American odds. So American odds of -110 are reflected as 1.91 calculated as *1 – (100/110).*

**To Sum Up**

Fractional odds are the most common odds and easiest to talk about. Decimal odds are the easiest to calculate and are growing in popularity. American odds are pretty much exclusive to North America and can be confusing to most newcomers.

Remember, these all mean the same thing. Anyone new to betting should pick one style of odds and get comfortable using it before worrying about the other types. Most online bookmakers will allow you to change your display settings to the style of your choice.

**Conversion Formula**

If you want to convert odds from one style to another you can use our handy guide at the top of the article or check out this calculator.