Implied Probability Explained

The core formula for decimal odds

Most sportsbooks operating in Ontario let you display prices as decimals, and the conversion is the simplest of the three.

Implied probability = 1 ÷ decimal odds

Then multiply by 100 to read it as a percentage.

• Odds 2.00 → 1 ÷ 2.00 = 0.50 → 50%
• Odds 1.50 → 1 ÷ 1.50 = 0.667 → 66.7%
• Odds 3.40 → 1 ÷ 3.40 = 0.294 → 29.4%
• Odds 1.91 → 1 ÷ 1.91 = 0.524 → 52.4%

The shorter the price, the higher the implied chance. That 1.91 figure is worth remembering: it's the standard "even money after margin" price on a two-way market, and it implies 52.4% rather than a clean 50%. The extra 2.4 points is the operator's cut, which we unpack below.

Fractional and American odds conversions

You'll still see fractional odds on some markets and American (moneyline) odds across the US-facing books that are also licensed in Ontario, such as DraftKings, FanDuel and BetMGM.

Fractional odds — implied probability = denominator ÷ (numerator + denominator):

• 1/1 (evens) → 1 ÷ (1+1) = 50%
• 5/2 → 2 ÷ (5+2) = 28.6%
• 10/11 → 11 ÷ (10+11) = 52.4%

American odds split into two formulas.

For a negative price (favourite), implied probability = |odds| ÷ (|odds| + 100):

• −110 → 110 ÷ (110+100) = 52.4%
• −200 → 200 ÷ (200+100) = 66.7%

For a positive price (underdog), implied probability = 100 ÷ (odds + 100):

• +150 → 100 ÷ (150+100) = 40%
• +240 → 100 ÷ (240+100) = 29.4%

Notice −110, 10/11 and 1.91 all land on 52.4%. They're the same price in three notations, so once you convert everything to implied probability you can compare a moneyline book against a decimal book directly.

Worked example: an NHL two-way market

Say you're looking at an NHL game and one Ontario sportsbook prices it like this:

• Toronto to win: 1.80
• Opponent to win: 2.10

Convert both:

• 1 ÷ 1.80 = 0.556 → 55.6%
• 1 ÷ 2.10 = 0.476 → 47.6%

Add them together: 55.6% + 47.6% = 103.2%.

A fair market with no house edge would total exactly 100%. This one totals 103.2%, so the overround (bookmaker margin) is 3.2%. That extra slice is how the operator builds in profit regardless of the result.

To strip the margin out and see the book's "true" estimate, divide each implied probability by the total:

• Toronto: 55.6 ÷ 103.2 = 53.9%
• Opponent: 47.6 ÷ 103.2 = 46.1%

Those normalised figures now sum to 100%. If your own read on the game is that Toronto wins closer to 58% of the time, the 1.80 price (implying 55.6%, or 53.9% margin-free) looks like value to you. If you think it's 50/50, the price is against you.

Why the numbers add up to more than 100%

The gap above 100% is the margin, sometimes called the vig, juice or overround. It's the single biggest reason implied probability matters: the odds are never a neutral forecast, they're a forecast plus a built-in edge for the house.

Lower margin means the implied probabilities are closer to the operator's honest estimate and more of the price stays in your pocket over time. From the sampled odds data BETAURO holds, average two-way margins vary noticeably between operators:

• Pinnacle — average margin about 3.1% (221 markets sampled)
• FanDuel — about 4.1% (306 sampled)
• DraftKings — about 4.2% (898 sampled)
• BetMGM — about 4.7% (240 sampled)
• Caesars Sportsbook — about 5.3% (784 sampled)
• Unibet — about 5.7% (201 sampled)
• Betway — about 6.1% (191 sampled)
• BetRivers — about 6.3% (280 sampled)
• 888sport — about 6.6% (251 sampled)
• LeoVegas — about 6.9% (167 sampled)

On a two-way market, a 3.1% margin book implies numbers roughly 3 points closer to reality than a 6.6% book. That's the practical payoff of learning to convert: you can rank operators by how little edge they take. These figures reflect the sampled markets held in our data, not a guarantee of the price on any single game you'll see today.

How to use implied probability to find value

Value exists when your own estimated probability is higher than the price's implied probability. The workflow is the same every time:

1. Convert the odds to an implied percentage using the formula for that format. 2. Normalise out the margin if you want the book's true read (divide by the market total). 3. Compare against your own assessment of the event. 4. Back it only when your number is meaningfully above the implied number — small gaps get eaten by margin.

A quick reference for common prices:

• 1.50 → 66.7%
• 1.80 → 55.6%
• 1.91 → 52.4%
• 2.00 → 50%
• 2.50 → 40%
• 3.00 → 33.3%
• 4.00 → 25%
• 5.00 → 20%
• 10.00 → 10%

Because every book bakes in a different margin, the same outcome can carry different implied probabilities across operators. Line-shopping — checking two or three sportsbooks before you commit — means backing the price with the lowest implied probability for the outcome you want, i.e. the best payout. Our betting tools and odds pages exist for exactly that comparison.

Where this fits with parlays and bet builders

For multiples, implied probabilities multiply. A two-leg parlay where each leg implies 50% (2.00 each) implies a combined 0.50 × 0.50 = 0.25 → 25% chance, which matches the combined 4.00 price (1 ÷ 4.00 = 25%). Add margin on each leg and the combined implied probability climbs faster than many bettors expect, which is why longer parlays and Same Game Parlays carry a heavier cumulative edge for the house.

Several Ontario-licensed operators offer Bet Builder or Same Game Parlay markets — bet365, Betway, Unibet, 888sport, Betano and bwin among the Bet Builder set; DraftKings, FanDuel, BetMGM, Caesars and BetRivers among the Same Game Parlay set. Converting each leg to a percentage before you combine is the honest way to see how likely the whole ticket really is.