Implied Probability

Implied probability is the likelihood of an outcome as read straight off the odds a sportsbook posts. It turns odds into a percentage, giving you a cleaner view of what the market thinks about each result. But because the bookmaker’s margin (juice or vig) is baked into the odds, the implied probabilities across a market add up to more than 100%. That amount over 100% is the overround – the sportsbook’s built-in edge.

To turn decimal odds into implied probability, divide 1 by the decimal odds and multiply by 100. American odds use a different formula depending on the sign. For negative American odds (say -150), it’s the absolute value of the odds divided by (the absolute value plus 100). For positive American odds (say +200), it’s 100 divided by (the odds plus 100).

Getting a handle on implied probability matters because it lets you stack the market’s read against your own estimate of an outcome’s true likelihood. When your number beats the implied probability, the bet may carry positive expected value.

Example

A sportsbook posts a tennis match with Player A at -200 and Player B at +170. Converting to implied probability:

• Player A: 200 / (200 + 100) = 66.7%
• Player B: 100 / (170 + 100) = 37.0%

These add up to 103.7%. The 3.7% excess is the bookmaker’s overround. The true (no-vig) probabilities land around 64.3% and 35.7%. If you peg Player B at a 40% chance – north of the market’s implied 37% – the bet on Player B may be value.

Key Points

• Odds are probabilities in disguise: Every set of odds maps to an implied probability. Learning to flip between them helps you judge whether a bet is priced fairly.
• The overround inflates probabilities: Thanks to the vig, implied probabilities across a market always top 100%. Strip out the overround and you get the true, fair probabilities.
• Comparing to your own estimates reveals value: A bet has positive expected value when your read on an outcome beats its implied probability after the margin is accounted for.
• Lower implied probability means higher potential payout: Longshots carry low implied probabilities and high odds, while heavy favorites carry high implied probabilities and low odds.