Betfair Implied Probability: How to Read What the Market Thinks

Understanding implied probability is essential for value betting and profitable trading on Betfair. Odds alone tell you nothing unless you know how to convert them into real-world chances. This guide explains the maths in simple steps and shows how implied probability links directly to expected value (EV).

What Is Implied Probability?

Every decimal price on Betfair is simply another way of expressing a probability. The odds may look different, but they always reflect what the market believes a runner’s chance of winning is.

Implied probability is the market’s best estimate of the true chance of an outcome.

Once you know the implied probability of the odds, you can compare it with your own estimate to determine whether a bet is value.

The Formula: Converting Odds to Probability

For decimal odds, the formula is extremely simple:

impliedProbability = 1 / decimalOdds

Examples:

Odds 2.00 → 1 ÷ 2.00 = 0.50 → 50%
Odds 3.50 → 1 ÷ 3.50 ≈ 0.2857 → 28.57%
Odds 10.0 → 1 ÷ 10.0 = 0.10 → 10%

Once you see odds as percentages, betting decisions become clearer and less emotional.

Why Implied Probability Matters

Every profitable betting strategy is based on one simple principle:

You make money when your estimated probability is higher than the implied probability of the odds.

This is the foundation of value betting and expected value (EV) calculations.

Comparing Your Estimated Probability With the Market

Suppose Betfair offers odds of 3.0 on a horse.

Implied probability = 1 ÷ 3.0 = 33.33%

If your research or model suggests the horse wins 40% of the time, your estimate is higher than the market’s. This is a positive expected value (+EV) situation.

If your estimate is below the implied probability, the bet is negative EV.

Linking Implied Probability to Expected Value

Implied probability is half of the EV equation. The other half is your own probability estimate.

If:

Your estimate > implied probability → bet is value
Your estimate = implied probability → neutral EV
Your estimate < implied probability → negative EV

To calculate EV precisely, use the Smarter Trades EV Calculator: Open EV Calculator.

Examples of Implied Probability in Real Markets

Example 1: Football Match Odds

A team is trading at 2.40 on Betfair.

Implied probability = 1 ÷ 2.40 = 41.67%

If you believe their real chance is 50%, this is strong value.

Example 2: Tennis Match

A player trades at 1.80.

Implied probability = 1 ÷ 1.80 = 55.56%

If your model gives them 52% win probability, the bet is not value.

Example 3: Horse Racing Longshot

A runner is 15.0 on Betfair.

Implied probability = 6.67%

Many punters underestimate how rarely these horses win. Seeing the true percentage helps avoid emotional or speculative bets.

How Commission Affects Real Value

Betfair commission reduces your net winnings, so the real EV of a bet is slightly lower than the raw implied probability comparison suggests.

This is why the Smarter Trades EV calculator includes a commission input — to show the true expected value after fees.

Implied Probability for Lay Betting

When laying, implied probability still applies, but in reverse. Lay odds reflect how often the selection is expected to lose.

For example, laying at odds of 4.0 implies the runner wins 25% of the time and loses 75% of the time.

Understanding this helps you assess whether a lay bet is really value or a liability trap.

Frequently Asked Questions

Is implied probability always correct?

No — it is only the market’s opinion, not the truth. Your goal is to identify when the market is wrong.

Do I need a model to estimate real probability?

Not necessarily. Many traders use form study, trends, pricing tissue, or heuristics. A model helps, but experience matters too.

Can implied probability help avoid bad bets?

Yes. Converting odds to percentages often highlights how unrealistic certain bets are — especially longshots.

Where can I calculate EV properly?

Use the free EV calculator here: Smarter Trades EV Calculator.