What does it mean to be an "odds on" favorite?
I've heard this a lot and never knew what this meant.
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Answers ( 1 )
It means that you're better than 50% to win. If you're betting to win a dollar, you'll have to risk more than a dollar.
Ignoring the "vig", which is the portion of the math that gives the bookie or casino its profit, an odds-on favorite who's expected to win 80% of the time would be given opening odds of 1/4 -- that is, you have to risk 4 dollars, and if you win, you get those 4 back plus one more. The 20% underdog would be given 4/1 odds and you'd have to risk 1 dollar to get that one back, plus 4 more.
In order to make a profit, the bookie might offer 1/5 and 3/1 odds instead. So now, if I wager $5 on the favorite and you wager $1 on the underdog, the bookie is in good shape: If I win, he's taken in $6 from us and pays me $6. If you win, he's taken in $6 and pays you $4. And that's how bookmakers and casinos make a profit, no matter who wins.