Betting odds work as a multiplier on your stake: a winning bet returns stake x decimal odds, and 1 / decimal odds is the chance of winning that the price implies. Australian bookmakers quote decimal odds, so on an example price of $2.75, every $1 returns $2.75 if it wins, stake included: $20 returns $55, which is $35 profit. The implied chance is 1 / 2.75, about 36.4%.
Add those chances across a whole market and the total comes to more than 100%, because the bookmaker's margin sits inside every price. Take the margin out and you have a fair price to measure offers against. Fixed odds, tote dividends, starting prices, exchange prices and the fractional and American formats are set out in betting odds types explained. Once a price is in decimal form, the same few sums work on all of them.
Betting odds for beginners: what a decimal price pays
A decimal price is the total return on a $1 bet, with the stake already counted. Two formulas cover every fixed-odds single:
- return = stake x decimal odds
- profit = return - stake, which is the same as stake x (decimal odds - 1)
With illustrative prices, here is a $20 bet at five points on the scale:
| Price | Described as | $20 returns | Profit if it wins | Implied chance |
|---|---|---|---|---|
| $1.45 | Odds-on | $29.00 | $9.00 | 69.0% |
| $2.00 | Even money | $40.00 | $20.00 | 50.0% |
| $2.75 | Odds against | $55.00 | $35.00 | 36.4% |
| $4.00 | Odds against | $80.00 | $60.00 | 25.0% |
| $11.00 | Long shot | $220.00 | $200.00 | 9.1% |
Prices under $2.00 are odds-on prices: the profit is smaller than the stake. At even money, $2.00, the profit equals the stake, and anything longer is odds against. The shortest price in a market belongs to the market favourite. Decimal odds explained covers odds-on and odds-against prices, why the stake is included and the misreadings that cost money.
Other formats convert through the decimal price. Fractional odds count the profit only, so decimal = fraction + 1, and $2.75 is 7/4. American odds above even money are (decimal - 1) x 100, so $2.75 is +175; below even money they are -100 / (decimal - 1), so $1.45 is -222 after rounding. The odds converter moves between all of them and shows the implied chance.
Betting odds and probability
Implied probability = 1 / decimal odds. A $2.00 price implies 50% and a $4.00 price implies 25%. Run the sum backwards and a chance becomes a price: decimal odds = 1 / probability, so a 20% chance is a $5.00 price and an 80% chance is $1.25.
A decimal price is also a "one in N" number. $4.00 says one win in four tries, $11.00 says one in eleven, and $1.25 says four in five. That is the bookmaker's view with its margin built in, not the true chance, which nobody knows exactly.
The implied chance is also the strike rate a price needs. At $2.75 you have to win 36.4% of your bets just to break even, and at $1.20 you need 83.3%, five wins in every six. Implied probability has a full conversion table and shows how to set a price against your own estimate of the chance.
The same sum explains why price moves matter. Say a runner firms from $4.00 to $3.00: its implied chance goes from 25% to 33.3%, which is 8.3 percentage points, or a third more likely in the market's eyes. A drifting runner moves the other way, and why betting odds change covers what moves them. Implied chances also drive dutching several runners: splitting one stake so each selection returns the same amount, which the dutching calculator works out.
Why a market adds up to more than 100%
Add the implied chances of every outcome in one bookmaker's market and you get its market percentage, sometimes called the book. A fair market would total exactly 100%. A bookmaker's totals more, and the excess is the overround: the margin built into the prices before you bet.
Example: a head to head market on a tennis match, which cannot end in a draw. Player A is $1.62 and Player B is $2.35. Illustrative prices, not a real match.
| Outcome | Price | Implied chance |
|---|---|---|
| Player A | $1.62 | 1 / 1.62 = 61.73% |
| Player B | $2.35 | 1 / 2.35 = 42.55% |
| Market total | 104.28% |
The overround is 104.28% - 100% = 4.28%. The share the bookmaker keeps is a little lower. If it took bets in proportion to those chances, it would pay out the same whoever won and keep 1 - 1 / 1.04282 = 0.0411, about 4.1% of everything bet.
That is what the margin costs you. If the margin shortens both prices by the same percentage, every $100 bet in this market returns $100 / 1.04282 = $95.89 on average, whichever side you back. The $4.11 gap is an average over many bets, not a charge on any single bet, which either wins or loses in full.
Margins are not the same everywhere. Every extra outcome is another price the bookmaker can shade, so a race with a dozen runners can carry a much higher total than a two-way market. Multis compound the margin leg by leg. Margins can also differ between bookmakers on the same market, and which bookmaker has the best odds shows how to measure that yourself.
Bookmaker margin compares margins across market types, and market percentage applies the sum to a race field. The bookmaker margin calculator totals a market from its prices, and how bookmakers set odds explains where opening prices come from and why some are shaded more than others.
Fair odds, edge and expected value
Taking the margin out of a market, often called de-vigging, gives a fair price for each outcome: an estimate of the price with no margin in it. The simplest method, called multiplicative or proportional, divides every implied chance by the market total so the market sums to exactly 100%.
- fair probability = implied probability / market total
- fair odds = 1 / fair probability, which is the same as offered odds x market total
On the tennis market, Player A's fair chance is 61.73% / 1.04282, about 59.2%, a fair price of $1.69. Player B's is 42.55% / 1.04282, about 40.8%, a fair price of 2.35 x 1.04282 = $2.45.
That fair price is an estimate, for three reasons:
- The method assumes the margin shortens every price by the same percentage. Bookmakers tend to shade long shots harder, and the additive, power and Shin methods move more of the margin onto the longer price, which gives Player B a slightly longer fair price.
- One bookmaker's market is one opinion. A fair price built from many bookmakers, or from a busy exchange market, rests on more money and more views.
- Prices can be stale or wrong, most of all when one bookmaker sits well away from the rest.
How to remove the bookmaker margin runs the four methods side by side on one market, and fair odds weighs a de-vigged price against an exchange price as the reference. For racing, the usual reference is a betting exchange, where punters back and lay against each other and the exchange charges commission on net winnings instead of building a margin into its prices.
Commission still comes off a winning exchange bet, so adjust for it: at an illustrative 6% rate, a $3.30 back price is worth 1 + 2.30 x 0.94 = $3.16 to the backer. Exchange prices as fair odds covers when that adjusted price is a sound reference.
Once you have a fair price, measure any offer against it:
- edge = offered price / fair price - 1
- expected value per $1 = fair probability x offered price - 1
The two give the same answer. Say a second bookmaker offers Player B at $2.50 (illustrative): the edge is 2.50 / 2.4506 - 1 = 0.0202, about 2%, worth about $2.02 per $100 bet on average. On these numbers Player B still loses about 59 times in 100, so a long losing run at a positive edge is normal. The fair odds calculator does the arithmetic, and value betting covers what an edge does over many bets.
Risk: Betting involves risk. An edge is an average over many bets, the fair price behind it is only an estimate, and a bet priced above fair can lose several times in a row. There is no guarantee of profit; see responsible gambling for limits and support.
How payouts work for singles, multis, each way and dead heats
Every payout in betting maths starts from return = stake x odds; the bet type decides which odds apply and how much of the stake counts. In thoroughbred racing, bets settle on the placings at correct weight. Under AR 214(6) of the Australian Rules of Racing, a change to the judge's placings after correct weight does not affect the stewards' earlier orders on betting. Harness and greyhound racing have their own rule books.
Note: The rules cited for payouts were checked in October 2026: the Racing NSW Rules of Betting (NSW on-course bookmakers), Western Australia's Rules of Wagering, and the NSW rules for NSW-authorised sports bookmakers. Online bookmakers publish their own terms, so check yours before you bet.
Singles and bonus bets
A win bet pays stake x price if the selection wins; a place bet pays stake x place price if it finishes in the places that apply. For NSW on-course bookmakers, the Racing NSW Rules of Betting pay place bets on the first three with eight or more runners and the first two with five to seven (BR 18). Online bookmakers set their own place terms, and place odds explained shows how a place price relates to the win price.
A tote dividend pays the same way once it is declared, per $1 with the stake included, but it is only known after the result. A bonus bet is the exception: Australian bonus bets normally return the winnings only, so winnings = bonus x (odds - 1). At an illustrative $3.60, a $15 bonus bet pays $39, not $54. A bonus bet that loses pays nothing, and each bookmaker's terms decide how its bonus bets work.
The bet calculator works out the return on a single, including each way, dead heats and scratching deductions, and the bonus bet converter does the arithmetic for hedging a bonus bet at an exchange.
Multis
A multi multiplies its legs' odds, and the whole stake rides on every leg. With illustrative prices, a $10 multi at $1.60, $1.85 and $2.30 has odds of 1.60 x 1.85 x 2.30 = 6.808, so it returns $68.08 if all three win. One losing leg loses the lot.
The margin multiplies as well. If each leg came from a market totalling 104.28%, like the tennis example, three legs compound to 1.04282 x 1.04282 x 1.04282 = 1.134, a 113.4% book. If the margin shortens every price by the same percentage, each single returns 1 / 1.04282 = about 95.9 cents per dollar on average and the three-leg multi 1 / 1.134 = about 88.2 cents.
Multis vs singles compares a multi's expected return with the same legs bet as singles, and the multi bet calculator prices any combination. A same game multi is different: legs from one game are related, so the bookmaker prices the combination as a whole rather than multiplying the legs, and same game multi odds explains how.
Each way
An each way bet is two bets of the same size, one to win and one to place, so $10 each way costs $20. Online bookmakers set their own each way terms, often as a fixed place price, so check them before you bet.
For NSW on-course bookmakers, the Racing NSW Rules of Betting fix the terms (BR 17). With eight or more starters, the place half pays a quarter of the win odds on the first three. With five to seven starters, it pays a third of the odds on the first two.
Example: $10 each way at $9.00 in a field of 10, on quarter-odds terms. In traditional odds $9.00 is 8/1, a quarter of that is 2/1, so the place half pays at $3.00. Illustrative prices, not a real race.
| Result | Win half | Place half | Total return | Profit on the $20 outlay |
|---|---|---|---|---|
| Wins | $90.00 | $30.00 | $120.00 | +$100.00 |
| Runs 2nd or 3rd | $0.00 | $30.00 | $30.00 | +$10.00 |
| Unplaced | $0.00 | $0.00 | $0.00 | -$20.00 |
Each way betting covers place terms by field size and when each way suits a runner, and the each way calculator runs any pair of prices.
Dead heats
A dead heat does not void a bet, but it can cut the payout. Under the rule books below, a win bet on a runner tied for first, or a place bet on one tied for the last paid place, is paid less. A tie higher up can cost nothing: with three places paid, two runners level for 2nd both stay inside the places, so place bets on them are paid in full under the same rules.
For NSW on-course bookmakers, BR 16 of the Racing NSW Rules of Betting pays half a ticket's face value when the runner dead-heats for first or for the last place paid. Under r 58 of Western Australia's Rules of Wagering, the return is divided by the number of runners tied. AR 213 of the Australian Rules of Racing shares out prize money between dead-heaters and does not settle bets: a bet's payout is set by those betting rules or by your bookmaker's own terms. With illustrative prices, under a rule that divides the return by the number tied:
| Bet | Full return | Dead heat | Paid | Profit or loss |
|---|---|---|---|---|
| $20 win at $4.80 | $96.00 | Two-way for 1st | $48.00 | +$28.00 |
| $20 win at $4.80 | $96.00 | Three-way for 1st | $32.00 | +$12.00 |
| $10 place at $1.70 | $17.00 | Two-way for 3rd, 8 or more starters | $8.50 | -$1.50 |
On the third row, a $10 place bet at $1.70 that dead-heats for the last place returns $8.50, less than its stake, even though the runner placed.
Sports ties follow the same idea with NSW-authorised bookmakers. Where no tie or draw price was offered, the face value is divided by the number tied, then multiplied by the number of places to be filled. That is clause 5.1.8 of the NSW Bookmaker Declared Betting Events Betting Rules; where a tie or draw price was offered, every other bet in that market loses (5.1.7).
In a multi, a tied leg is adjusted the same way before the legs are multiplied (5.1.9). If the $2.30 leg in the multi example tied two ways, it would count at $1.15, and the $10 multi would return 1.60 x 1.85 x 1.15 x $10 = $34.04. Online bookmakers publish their own dead heat rules, and dead heat rules shows what to look for in them.
Scratchings
After a late scratching, the stewards declare deductions in cents in the dollar on fixed-odds bets struck before it. The Racing NSW Rules of Betting pay the face value of the ticket less the deduction (BR 14); a bookmaker's terms may take it off the winnings only. On an illustrative 12c deduction, $10 at $6.50 pays $65 x 0.88 = $57.20 on face value, or $10 + $55 x 0.88 = $58.40 on winnings only. Scratchings and deductions covers the stake floor, several scratchings in one race, and deductions inside multis and each way bets.
Where the simple maths breaks down
The core of betting maths (return, implied probability and margin) holds for any fixed price, but some situations bend it. Use this as a decision rule before you trust a sum:
| Situation | Why the simple sum misleads | What to do instead |
|---|---|---|
| Tote approximates before the jump | The pool keeps growing until betting closes, so an approximate is an estimate, not a price | Read the dividend once it is declared; tote dividends explains how pools pay |
| Same game multis | Legs from one game are related, so multiplying them misstates the chance | Judge the combined price the bookmaker offers, as correlated bets explains |
| A market with outcomes missing | An outright or race market without every runner priced adds up to less than it should | Total a market only when every outcome is listed |
| Very short favourites and long shots | The margin does not always shorten every price by the same percentage, so a proportional de-vig can misprice the ends of a market | Compare methods, or an exchange price, and read up on the favourite-longshot bias |
| One price far from every other bookmaker | A stale or mistaken quote is a likelier story than a large edge, and bookmaker terms can let it void a bet struck at an obvious error | Confirm the price in your bookmaker account before you bet |
| A few dozen bets | Expected value is an average, and short runs swing well away from it | Judge your prices against the fair price or the closing line value, not a handful of results |
Mistakes that cost money when reading odds
With illustrative prices, these are the slips that turn a sound bet into a wrong one:
| Mistake | What it costs | The fix |
|---|---|---|
| Reading the price as profit | Expecting $55 profit from $20 at $2.75, when the profit is $35 | Profit = stake x (odds - 1) |
| Taking implied probability as the true chance | Player A at $1.62 reads as 61.7%, about 2.5 points more than the 59.2% estimate with the margin out | Take the margin out before you compare |
| Treating a short price as a safe bet | At $1.20 you need five wins in every six to break even, and one loss wipes out five wins | Compare the price with the chance, not the label |
| Forgetting each way is two bets | $10 each way costs $20, so a placing at a $3.00 place price makes only $10 profit | Count both halves in the outlay |
| Adding legs for a bigger return | Three legs from 104.28% markets compound to about 113.4% | Price the multi against the same legs as singles |
| Counting a bonus bet's stake in the return | A $15 bonus bet at $3.60 pays $39, not $54 | Winnings = bonus x (odds - 1) |
| Mixing up percent and percentage points | A firm from 25% to 33.3% is 8.3 points, but a third more likely | Say which one you mean |
Comparing prices across bookmakers with B337
Checking a price against other bookmakers and against a fair price means having many prices side by side, which is the job of B337's Terminal, its odds comparison board. It shows racing and sports prices from 40+ bookmakers in columns, with the best available price on each runner or selection picked out, Betfair back and lay beside them, price history (flucs) and closing lines. Not every bookmaker prices every race or game, so the columns follow the market.
EV overlays compare each price with an estimated fair price: for racing the reference is Betfair's own market, and for sports it is a global market reference with the margin removed. Both are estimates. The Terminal collects prices on a repeating cycle, not tick by tick, so a price on screen can trail the bookmaker's own: confirm it in your bookmaker account before you bet.
A free account opens a limited view of the Terminal with live odds. Betfair prices, closing lines and EV overlays start with Terminal View, which also lets you set your own de-vig settings, and the plans and pricing page lists what each plan includes. B337 is software, not a bookmaker: it does not take bets, set prices or hold your money. Bookmaker and exchange names are trade marks of their owners, and B337 is not affiliated with any of them.
For free and confidential support call 1800 858 858 or visit gamblinghelponline.org.au.
Risk: Betting involves risk. A price above the fair estimate can still lose, prices can move before a bet is accepted, and bookmakers can restrict or close accounts and void bets.