Currently in the UK and Ireland the system that bookmakers use when offering fixed odds on a horse race is called fractional odds, particularly in on course betting. It is probable that in the not too distant future this will change, as Racing for Change, an organisation that is updating British horse racing to make it more appealing to young people, has determined that decimal odds are easier to understand and intend to phase them in over the next year or so. Here we will describe how both systems work. Note that many online bookmakers allow you to choose either system.
Fractional Odds
Fractional betting odds represent the potential payout on a bet as a fraction. We will illustrate this with an example. Paddy Power is offering ante-post odds on Denman winning the Cheltenham Gold Cup of 2/1. This is expressed verbally as odds of two to one.
What it means in reality is that if you bet £5.00 on Denman to win this event and he did, then your winnings would be two times your stake, which is £10.00. Additionally your original stake will be returned to you, so in total you would receive £15.00.
An expression for calculating this is your return = (stake x fractional odds) + stake.
Decimal Odds
Decimal odds are used throughout much of Europe and as indicated above are soon to be introduced to racecourses in the UK. They are already in use at sites such as Betfair.com in the UK. These are NOT simply the decimal expression of the fraction used in fractional odds. The figure given in decimal odds is the actual return that will be paid in the event of your selection winning. They already factor in the fact that your stake will be returned.
Taking the above example and expressing it as decimal odds we would find that they are 3.00. This means that the return on our £5.00 bet would be £5.00 x 3.0 = £15.
In many ways decimal odds are easier to use, particularly when used for accumulators, as to calculate the potential return of an outcome of an accumulator it is necessary to multiply only all of the fractional odds together rather than add in the stake for each stage of the calculation as is the case with fraction odds.
The Cheltenham Festival provides punters with a fantastic way of introducing yourself to Decimal Betting odds. Place your Cheltenham Bets with Betfair and you will also qualify for a free £25 bet.