How to Calculate Implied Probability

Implied probability is the win chance that the betting odds represent. Calculating it helps you decide if a bet is worth it. To convert American odds to a percentage: use a simple formula. For favorites (negative odds), implied probability = `odds / (odds + 100) * 100%`. For underdogs (positive odds), implied probability = `100 / (odds + 100) * 100%`. Don’t let the formula scare you – it’s straightforward. For example, -200 odds equate to 200/(200+100) = 0.667, or 66.7% chance. A +200 underdog is 100/(200+100) = 33.3% chance. In general, favorites above -100 imply over 50% chance, while plus odds imply less than 50%.

Let’s walk through an example: Say Fighter A is -120. Convert it to implied probability: 120/(120+100) ≈ 54.5%. Fighter B at +100 (even money) is 100/(100+100) = 50%. These percentages tell you how often the fighter needs to win to break even on that bet. If you think Fighter A would win more than \~55% of the time, a -120 bet on them has some value. If not, it might be overpriced. Similarly, an underdog at +150 has an implied probability of about 40%. If you believe that underdog has a greater than 40% chance to win, that bet is a value play.

The whole point of calculating implied probability is to find value. You compare the implied percentage to your own estimated probability of an outcome. A “value bet” is when your estimated true chance of an outcome is higher than the sportsbook’s implied chance. In those cases, the odds are in your favor. For instance, a fair coin toss is 50/50, but if a book offered heads at +125 (implying \~44.4%), that’s a value bet because 50% > 44.4%. By converting odds to probabilities, you can spot these edges. It’s a vital tool for smart betting – always look for when the odds undervalue a fighter’s chances. Consistently betting with an edge is how you come out ahead in the long run.

Sources: TheLines; Investopedia