Implied probability is the win percentage that a set of betting odds suggests. Every price on every bet converts directly to an implied probability — and that probability is the market's estimate of the outcome's likelihood. Understanding implied probability is essential for evaluating bet value.
Calculating Implied Probability
From positive odds (underdog): Implied probability = 100 / (Odds + 100) Example: +150 → 100 / (150 + 100) = 100 / 250 = 40%
From negative odds (favorite): Implied probability = |Odds| / (|Odds| + 100) Example: -150 → 150 / (150 + 100) = 150 / 250 = 60%
The Vig in Probability Terms
On a -110/-110 spread, both sides have an implied probability of 52.38%. But there can only be one winner — the true combined probability of both outcomes must be 100%. The sum of 52.38 + 52.38 = 104.76% — the extra 4.76% is the sportsbook's margin built into the prices.
This is why a no-vig calculation is needed to find the true implied probability: divide each side's probability by the total to get back to 100%.
Using Implied Probability to Find Value
The key question: is the true probability of this outcome higher than the implied probability?
If you believe a team has a 55% chance of winning but the market implies 50%, you have positive expected value — the market is underpricing the team.
Your probability estimate doesn't need to be perfect — it needs to be consistently better than the market's estimate in specific situations. That's the definition of a genuine betting edge.
Applied Examples
Example 1: Team at +110 (implied: 47.6%). You estimate 52% true probability. EV = (0.52 × $110) - (0.48 × $100) = $57.20 - $48 = +$9.20 expected profit per $100 bet.
Example 2: Favorite at -200 (implied: 66.7%). You estimate 60% true probability. EV = (0.60 × $50) - (0.40 × $100) = $30 - $40 = -$10 expected loss per $100 bet.
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