What is Implied Probability in Sports Betting?

Implied Probability Explained in Detail

Implied probability translates odds into a language everyone understands: percentages. Instead of thinking about what -130 means in terms of dollars, you can convert it to 56.5% and ask yourself whether you think the team wins more or less often than that. If you believe they win 62% of the time, the bet has value.

The conversion formulas are straightforward. For negative American odds: Implied Probability = Odds / (Odds + 100). For -150: 150 / (150 + 100) = 150 / 250 = 60%. For positive American odds: Implied Probability = 100 / (Odds + 100). For +200: 100 / (200 + 100) = 100 / 300 = 33.3%.

Implied probabilities from both sides of a market always add up to more than 100% because of the vig. If one side is -150 (60%) and the other is +130 (43.5%), the total implied probability is 103.5%. The extra 3.5% above 100% is the vig. To find the true implied probability, you need to normalize by removing the vig.

Using implied probability as a framework for thinking about bets is one of the most powerful mindset shifts a bettor can make. Instead of thinking about which team will win, you think about whether the market is correctly pricing the probability. A team that is very likely to lose can still be a great bet if the odds overestimate how likely they are to lose.