American odds and implied probability: how to calculate them
Implied probability is the chance of winning that a price represents. With American odds: for a favorite (negative odds) it is odds / (odds + 100), so -110 is 52.4% and -200 is 66.7%. For an underdog (positive odds) it is 100 / (odds + 100), so +150 is 40% and +300 is 25%. With decimal odds it is simply 1 divided by the odds.
The vig
Add up the implied probabilities of every outcome in a market and you get more than 100%. Example: Over -110 and Under -110 give 52.4% + 52.4% = 104.8%. That extra 4.8% is the sportsbook's margin, known as the vig or juice.
Removing the vig
To get the no-vig (fair) probability divide each implied probability by the sum. In the example: 52.4 / 104.8 = 50%. With uneven prices, Over -140 and Under +115: 58.3% and 46.5%, sum 104.8%, fair probabilities 55.6% and 44.4%.
How accurate closing odds are
We compared Pinnacle's no-vig closing probabilities with the results of more than 15,600 NBA games from 2020 to 2026. Games with a favorite priced between 50% and 65% ended with the favorite winning 58.4% of the time, against 57.8% predicted on average. In the 65-80% band the market predicted 72.0% and the favorite won 71.1% of the time.
| Closing probability | Games | Average predicted | Actual wins |
|---|---|---|---|
| up to 20% | 1,347 | 14.6% | 13.9% |
| 20-35% | 2,849 | 28.0% | 29.0% |
| 35-50% | 3,639 | 42.3% | 41.7% |
| 50-65% | 3,591 | 57.8% | 58.4% |
| 65-80% | 2,855 | 72.0% | 71.1% |
| over 80% | 1,341 | 85.4% | 86.1% |
In short: the closing price of a liquid market is already a very precise estimate. Beating it consistently is hard, and that is why Clutch shows data and not picks.
Frequently asked questions
How do you calculate implied probability from American odds?
For negative odds divide the odds by the odds plus 100: -110 is 110 / 210 = 52.4%. For positive odds divide 100 by the odds plus 100: +150 is 100 / 250 = 40%.
And from decimal odds?
Divide 1 by the odds. Decimal 2.00 is 50%, 1.50 is 66.7%, 4.00 is 25%.
Why do the probabilities add up to more than 100%?
Because the sportsbook's margin (the vig or juice) is built into the odds. The part above 100% is its expected profit.
How do you remove the vig?
The simplest method divides each implied probability by their sum, so the total goes back to 100%.
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Clutch publishes statistics for informational purposes, not picks. Today's games with lines and numbers are on the NBA today page.