Implied Probability
Implied probability is the percentage chance an outcome must occur to break even at the offered odds. It's the raw conversion of odds to probability — before removing the bookmaker's vig.
Conversion Formulas
Decimal: P = 1 / decimal_odds
American positive: P = 100 / (odds + 100)
American negative: P = |odds| / (|odds| + 100)
2.00 decimal = 50%. +150 American = 40%. −200 American = 66.7%.
Implied ≠ True Probability
The sum of implied probabilities across all outcomes always exceeds 100% — that excess is the vig. To estimate the true (no-vig) probability you must devig the market.
Why It Matters for Value Betting
Comparing the bookmaker's implied probability to your own estimate (or to a sharp book's devigged price) is the foundation of finding +EV. If you believe true probability is higher than implied, the bet is +EV.
Frequently Asked Questions
How do I convert American odds to decimal?
Positive: decimal = (American / 100) + 1. Negative: decimal = (100 / |American|) + 1. +150 → 2.50. −200 → 1.50.
Why don't implied probabilities sum to 100%?
Because of vig — bookmakers price in margin. A 2-way market typically sums to 104–110%, with the excess being the overround.
Apply this concept to live value bets.
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