Implied Probability

Implied probability is the chance an outcome will happen according to the odds. It’s the price translated into a percentage. It does not include the sportsbook’s margin (the vig), so it’s slightly higher than what the book actually believes will happen.

How to calculate it

The cleanest formula uses decimal odds:

Implied probability = 1 / decimal odds

A few examples:

• Decimal 2.00 → 1/2.00 = 50.0%
• Decimal 1.91 (which is -110) → 1/1.91 = 52.4%
• Decimal 1.50 (which is -200) → 1/1.50 = 66.7%
• Decimal 4.00 (which is +300) → 1/4.00 = 25.0%

For American odds you can shortcut:

• Negative odds: probability = |odds| / (|odds| + 100). So -110 → 110/210 = 52.4%.
• Positive odds: probability = 100 / (odds + 100). So +150 → 100/250 = 40.0%.

For fractional odds: probability = denominator / (numerator + denominator). 5/2 → 2/7 = 28.6%.

Why it’s higher than “true” probability

The sportsbook builds a margin into every line. On a coin-flip game, both sides are typically priced at -110 — implying 52.4% for each side. That sums to 104.8%, not 100%. The 4.8% gap is the book’s edge (the vig). Strip the vig and you get a closer estimate of the book’s true probability for each side.

Why it matters

Implied probability is the bridge between “what’s this priced at” and “is this a good bet.” If you think the true probability is higher than the implied probability, you have +EV. If it’s lower, you don’t.