Odds are the mainstay of betting across sports and esports. However, they had to have come from somewhere. The concept of calculating probability isn’t a new one. But, using probability formally as betting odds does have a long history. This article provides a brief overview of history to explore the origins of betting odds, their evolution, and their current functioning.
The origins of probability and betting
Language using odds, such as the phrase ‘ten to one’ has actually been used since the sixteenth century when Shakespeare used the phrase. Impressively, this was before probability theory was actually developed. It’s likely that odds have been around since the ancient times, as the Romans, Greeks and Chinese all used to bet.
It wasn’t until the 17th Century, though, that betting became more popular again, and the first bookmakers came into effect. Prior to this, there were a lot of casual betting systems rather than more structured ones, which then paved the way for structured betting to arise.
In 1700s Britain, horse racing was commonly a popular attraction for the wealthy. Back then, predicting the winner was the only form of betting, and it wasn’t until later that Harry Ogden recognised that there were varying likelihoods of different horses winning and subsequently introduced the idea of odds within betting.
Ogden began spending his time on the track and took bets based on his form of odds. These had been strategically created to favour him and ensure he could be profitable over the long term. This was the first bookmaker with a systematic approach to betting. And it wasn’t long before others followed across Britain and then Europe.
Interestingly, it was during this era that Blaise Pascal and Pierre de Fermat, two mathematicians, discovered probability theory and this was able to inform betting odds and the way bookmakers operated even further.
How odds work today
But where do the odds come from? Well, sportsbooks take a considerable amount of time to put together. Statistics regarding the wider betting market and overall data are used to create the odds. And, as with the past, the goal here is to ensure that the bookmaker is favoured, giving them a profit in the long run. Essentially, they try to minimize the risk and chance of losing big, such as on a popular favourite. So, if a favourite loses, the sportsbook wins.
Across the world, different odds are used in different areas. For the UK, the fractional odds were developed between the 18th and 19th centuries. Following this, decimal and moneyline formats were developed in Europe, Asia and then America. Each of these works in slightly different ways.
Fractional odds, also known as traditional odds show a fractional listing of the odds. So, when you see something like 6/1, it just means that for every £1 beet, you would get £6 for each pound. A £10 bet with these odds would give you £60 plus your initial £10 back.
Decimal odds, or continental odds, show the amount you would take home for every £1 bet. It’s the total payout, not the profit, which means your stake is already included in the decimal number. Odds of 4.00 for a horse winning and 1.3 for another horse winning mean that if you bet £10 on the 4.00 bet, you’d get a total payout of £40. Premier Bet Malawi uses this format, which makes it easy to understand when adding a new bet to the betting slip.
Moneyline, or American odds, show the favourites with a – and the underdogs with a +. If a team has odds of -150 and the opposition has +200, then you instantly know who the favourites are. Betting on the favourites means you’d have to bet £150 to win £100. But, betting on the underdogs means that for a £100 bet, you’d win £200.
Final thoughts
From ancient times to modern day, odds have always been a part of the betting process. The accuracy of creating and placing odds continues to grow, though, as technology continues to improve the way data is parsed and analysed. It’s likely that in the future, AI will be used to create odds, potentially making them even more accurate and accessible.
