What are American Odds in sports betting? (How to read and use them)

Quick summary#

This article explains American odds and how to read and use them effectively in sports betting. You’ll learn how these odds indicate favorites and underdogs, how to calculate payouts, and how to identify value in your wagers so you can make smarter, more profitable betting decisions. 

Confused by American Odds?#

If you’ve ever opened a sportsbook app, seen +150 or -200, and felt completely lost, you’re not alone. Many new bettors, and even some seasoned ones, struggle to quickly interpret American odds, making it hard to spot value bets or manage risk effectively. 

Without understanding how these numbers translate to probability and payouts, it’s easy to misjudge your wagers and miss profitable opportunities.

In this Pinnacle Odds Dropper article, we’re going to break down what American odds are, how to read them, and how to use them to make smarter betting decisions. 

What are American odds?#

American odds, also called moneyline odds, are a way of expressing betting odds commonly used in the United States. They indicate how much you can win relative to your stake and whether a team or player is favored or considered an underdog.

#

1. Positive American odds (+)#

Positive odds show how much profit you will make on a $100 bet. 

Formula:

• Payout = (Bet Amount x Odds) ÷ 100
• Implied Probability = 100 ÷ (Odds + 100)

Example (NFL underdog):
The Chicago Bears are listed at +150 to beat the Packers.

• If you bet $50:
  Payout = ($50 × 150) ÷ 100 = $75 profit
  Total return = $125 (your $50 stake + $75 profit).
• Implied probability:
  100 ÷ (150 + 100) = 40%
  This means oddsmakers believe the Bears have a 40% chance to win

Positive odds are typically assigned to the underdog in a betting scenario. The higher the positive odds, the less likely the outcome is to occur, which is why the potential payout is higher for these bets.

2. Negative American odds (-)#

Negative odds show how much you need to bet to win $100. 

Formula:

• Payout = (Bet Amount ÷ Odds) × 100
• Implied Probability = Odds ÷ (Odds + 100)

Example (NBA favorite):
The Golden State Warriors are listed at -200 to beat the Kings.

• If you bet $50:
  Payout = ($50 ÷ 200) × 100 = $25 profit
  Total return = $75 (your $50 stake + $25 profit).
• Implied probability:
  200 ÷ (200 + 100) = 66.7%
  The Warriors are seen as about a 67% favorite.

Negative odds are typically assigned to the favorite in a betting scenario. The more negative the odds, the stronger the favorite, meaning you’ll need to wager more to win a standard payout of $100.

American odds vs. decimal and fractional odds#

How to use American odds effectively#

Understanding American odds is crucial for making smart, informed betting decisions. Here’s how you can use them effectively to identify value in the odds and maximize your potential returns:

1. Recognize value in the odds#

Successful betting hinges on identifying value. Value betting occurs when the odds offered are higher than the actual probability of an event happening.

• Positive odds indicate the underdog. These bets offer higher payouts because they are less likely to occur.

Negative odds represent the favorite, with a lower risk but a higher stake required to win $100.

2. Assess risk vs. reward#

Balancing risk and reward is key when using American odds. Negative odds require higher stakes for smaller payouts, while positive odds offer larger payouts for smaller bets but come with higher risk.

3. Identify overvalued and undervalued odds#

Bookmakers sometimes set odds that overestimate or underestimate the probability of an event. To bet effectively, you need to spot when the odds are mispriced:

• Overvalued odds are set too high for an event with a low chance of happening. These bets may offer large payouts but come with low probabilities.
• Undervalued odds are too low for events likely to occur, presenting opportunities for savvy bettors to capitalize on a higher likelihood of success.

4. Compare odds across multiple bookmakers#

Odds can vary across sportsbooks, so it’s important to compare the American odds offered by different bookmakers for the same event. By doing this, you can maximize your return by placing your bet with the bookmaker offering the best odds.

5. Use odds as part of your betting strategy#

American odds should not be the only factor in your decision-making process. They should be used in conjunction with other betting strategies such as research, bet sizing, bet diversification, etc.

Conclusion#

Understanding American odds is essential for making informed betting decisions. When you recognize value, assess risk versus reward, and identify overvalued or undervalued odds, you can enhance your betting strategy.

Mastering these concepts will help you place smarter, more profitable wagers and increase your chances of success.  For more betting strategies like this, check the The Advantage blog.Frequently asked questions

Can I bet amounts apart from $100 with American odds?#

Yes, you can bet any amount. The $100 reference in American odds is just for simplicity.

Are American odds used outside the U.S.?#

While most common in the U.S., some international sportsbooks offer American odds alongside decimal and fractional formats.

Do American odds include the bookmaker’s margin?#

Yes, sportsbooks build their margin into odds, slightly reducing potential returns compared to true probabilities.

Why do sportsbooks use $100 as the standard in American odds?#

The $100 benchmark makes it easy to show profit or stake requirements, but you can scale payouts to any bet size.

Which sports most commonly use American odds?#

American odds are standard in U.S. sports like football, basketball, baseball, and hockey. Many sportsbooks also use them for international events alongside decimal and fractional odds.