The probability of an outcome embedded in bookmaker odds — calculated by dividing 1 by the decimal odds.
Implied probability is the percentage chance of an outcome that is built into the bookmaker's odds. For decimal odds, it is simply 1 ÷ decimal odds. Odds of 2.00 imply a 50% probability; odds of 3.00 imply 33.3%; odds of 1.50 imply 66.7%.
The word "implied" is key — the probability is not stated directly. You derive it from the price. It represents what the bookmaker believes the chance of the outcome is, after including their profit margin (the overround or vig).
Understanding implied probability is the foundation of value betting. If you believe a team has a 60% chance of winning but the bookmaker's implied probability is only 50% (odds of 2.00), there is a positive expected value edge on that bet.
To find true fair odds, you need to remove the bookmaker's margin from the implied probability. Dividing each implied probability by the sum of all outcomes' implied probabilities gives you the margin-free, "true" probability.
Value Betting
Betting at odds that are higher than the true probability of the outcome — finding bets where the bookmaker has underestimated the chances of an event.
Expected Value (EV)
The average outcome of a bet over a large number of repetitions — positive EV means the bet profits long-term; negative EV means it loses.
Overround (Vig / Juice)
The bookmaker's built-in profit margin — the amount by which the implied probabilities of all outcomes in a market sum to more than 100%.
Kelly Criterion
A mathematical formula that calculates the optimal fraction of your bankroll to stake on a bet, maximising long-term growth given your estimated edge.
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