Gambling on MMA 102: Understanding American Odds

So in my last article we’ve established that 1. People bet on the fighters they like. Not always the fighters who are the smart bet. This will cause the bookmakers to adjust the odds to give the unpopular fighters more favorable odds.

and 2. Bookmakers don’t have time or money to write accurate odds on all the fights. Now there are a lot of MMA fights that sites online, or casinos, will put action on. Around 10 fights per UFC event, WEC event, Strikeforce, Dream, and all other big events. We know that the odds can be wrong a lot of the time. Before we step into any analysis we have to obtain a strong understanding of how odds work. 3. Understanding American Odds (-325 vs. +215)

When odds are placed on a fighter. Each fighter is given an amount in a + or – format. For example
Fighter A -300 Fighter B +200
This plus or minus amount is the odds on that fighter. The way American odds work, put simply, is if the odds placed on a fighter are prefaced with a minus sign (-) that means that to win $100, you as the gambler would have to place a bet equal to the value following the minus sign. In the scenario above, to win $100 dollars on fighter A, you would have to place a bet of $300 on fighter A, and fighter A would then of course have to win the fight. If a plus sign (+) prefaces the odds on a fighter, the number following is the amount you as a gambler would stand to win if you placed a bet of $100. So in the scenario above, if you were to place $100 dollar bet on Fighter B, and Fighter B wins the fight, then you would win $200.

It is implied that the fighter with odds listed at -300 is the favorite to win the fight, and the fighter with odds at +200 is expected to lose the fight, but how much is fighter A expected to win the fight? and how much is fighter B expected to lose the fight? This is where it gets fun. So to continue on with our scenario of Fighter A with odds at -300. Let’s imagine that the fight of A Vs. B happens 100 times. and every time the fight occurs we bet $300 on Fighter A. We have 3 different situations for each of these 100 fights.

1. We expect fighter A to win 60 times. 2. We expect fighter A to win  75 times. 3. We expect fighter A to win  90 times.

Every scenario we will bet $300, and win $100 profit everytime fighter A wins, and lose our initial bet of $300 everytime Fighter A loses (B wins.)

(in each of our scenarios our analysis of the fighter winning X amount of times comes true)

Scenario 1. we win 60 bets, and lose 40. we win $6,000 (60 x $100) and we lose $12,000 (40 x $300). This results in a net loss of $6,000.

Scenario 2. We win 75 bets, and lose 25. We win $7,500 (75 x $100) and lose $7,500 (25 x $300). Resulting in a break even.

Scenario 3 We win 90 bets, and lose 10. We win $9,000 (90 x $100) and lose $3,000 (10 x $300). Resulting in a net gain of $6,000.

What do we gather from this? That if Fighter A has odds of -300 placed on him, he is expected (by the odds) to win the fight 75% of the time. If fighter A wins the fight more than 75% (what the odds imply his chances of winning the fight are), and we place a bet on him at -300, then that is what we call an Economic Bet. So oddsmakers write the odds on a fighter, and whatever those values are (if they are negative, or positive) imply a percentage chance that said fighter will win. From now on I will call this implied percentage %SBO (Sportsbook odds).

We as gamblers assign our own percentage chance of a fighter to win a fight, we will call this %YO (your odds). We assign our own odds to a fighter, through our knowledge and research of MMA, the fighter, and his opponent. And sometimes through other professionals advice. An Economic bet is when %SBO < %YO. In laimens terms, when we believe a fighter has a bigger chance to win a fight than a sportsbook does.

So when we are analyzing a fight, we need to assess in our own minds what we believe a fighter’s chance to win the fight is. Don’t worry, I will provide more in depth ways to find and determine our own percentages later, but for the time being we are going to assign our own. It’s important not to get tied up in the single percentage point, but think in more general terms. So once we establish out percentage (%YO) we need to look at the sports book odds and find out what exactly their percentages are, and we need to figure that out by looking at american odds. Here is a chart for you.

American Odds = %SBO -100 = 50% -150 = 58% -200 = 66.66% -300 = 75% -400 = 80% -500 = ~83% -600 = ~86% +150 = 42% +200 = 33.33% +300 = 25% +400 = 20% +500 = ~17% +600 = ~14%

~ means about, because after that the odds start moving in very small amounts. If you want to calculate these odds, think of it like this. If a fighter is -700 he is a 7-1 favorite. (If the odds were -625 he’d be 6.25-1 favorite If the fighter was +400, he’d be 1-4 underdog.)  So 7 to 1 means, out of 8 fights, he will win 7 times. So divide 100% by 8 and that leaves us with a value of 12.5. multiply that number by 7 and we have 87.5%. 87.5% is the %SB0, while a fighter valued at +700 would be the other end of the odds (he would be the -1), having an %SBO of 12.5%

I don't go that high in magnitude in my chart because, well I’m lazy, and I also gave you a simple formula to calculate it. I did this because, after +/- 600, the values move at such a small rate, and typically it isn’t smart to be gambling at those odds in MMA. However, if you are and are making long term profit gambling at those odds, why are you reading this? A trend amongst the %SBO is as the american odds value grows in magnitude (gets bigger in either direction) the difference in the resulting %SBO begins to slow down. This will help us justify bets on far ends of the spectrum later on.

To recap, we’ve established that whenever there are odds placed on a fighter, those odds imply a percentage chance that said fighter will win that fight. If the fighter would actually win that fight more times than he would not, and we place a bet on those odds, we will make profit in the long term. We established in gambling 101 that this implied sportsbook value %SBO is often times not the same percentage chance that that fighter has to win the fight. We will establish that percentage %YO on our own, through research and knowledge. And when %YO is greater than %SBO we have found an Economic bet.

Join me next time when I explain how sportsbooks odds move, why they set values the way they do, and how to anticipate movement in those odds.