In statistics and gambling odds express how likely something is to happen, but in gambling odds can also be the ratio between the bet wagered and the payout.
Gambling Odds Versus Statistics Odds
Let’s talk about odds, how odds relates to probability, and how either the statistical or gambling version of odds can be used when talking about gambling.
Gambling Odds: 5 – 1 odds means a bet pays 5 to 1. ($5 for every $1 wagered. You win a total of $5). A 4 to 1 bet is statistically likely to hit more often than a 8 to 1 bet.
(Win) : (Wager)
Statistics Odds: In statistics odds are the probability of an event. A dice has 1 to 5 ( 5 – 1) odds, one chance to land on six and five to not land on six.
(Chances for) : (Chances against)
For more information on Odds versus Probability go to Ask Doctor Math.
Odds Versus Probability (Gambling)
Probability is the chances of something happening compared to total chances. While odds are chances for compared to chances against. In gambling odds are about money, but relate to chance loosely.
(Chances for) P(x) = --------------- (Total chances)
FACT: A coin has 1 to 1 odds even though it has a 1 in 2 chance of being heads. 1 in 2, 1/2, or 50% all express probability.
Saying Odds While Talking About Gambling
Sometimes we also talk about odds in the statistical way when talking about gambling. Especially when talking about the chances of something happening. Such as with the phrase “past odds don’t affect future odds”.
Past Odds Don’t Affect Future Odds
The probability of something happening more than once, before any event takes place, is not the same as the probability of each event happening. The chances of a coin landing on heads ten times is 1/2^10 or 1 in 1032, if a coin has already landed on heads 9 times the chances of it land on heads again is 1/2^1 or 1 to 1.
MYTH: It’s a myth that if a slot machine hasn’t paid out in a while that it is “due”. A slot machine has the same “odds” or probability of paying out any given non-progressive jackpot every spin.
How Odds Determine Return
Generally you can look at the probability of winning versus the payout (gambling odds), and calculate the expected return of a game over X amount of plays.
In some games knowing you have just hit the big win can make the difference between walking away a winner and walking away with less.