How does betting odds work?

Question

How does betting odds work?

Answer 1

whats with the first guys answer? They just determine who in their opinion is most likely to win, it is just a guess on their behalf

Answer 2

In horse racing for instance, the bookmaker decides which horse is most likely to win (the favourite).  If it is a three horse race, the favourite would be probably 1 - 4, the second favourite 1 - 1 and the third 3 - 1.  Once betting starts, if he receives a large bet on the second favourite, he may cut the odds to 1 - 3 and increase the favourite to the same 1 - 3.  This continues until just before the off when he balances his books.  He may offer the favourite at 1 - 1 just before the off to ensure that he does not lose.   In, say, a boxing match, he will do the same 1 - 5 on his first choice and 1-1 on the second. When betting begins, these odds will fluctuate.  If it is a draw the bookie wins all, unless of course he took bets on the result being such.  (The odds 1 - 3 mean that you put three dollars on to win one, plus your initial bet, so if you win, you get four dollars back).

Answer 3

if a bet is 3 to 1 if you put 1on and win you get 3 back

Answer 4

A combination of the chances of something happening and risk covering previous bets, plus a bit of shortening of odds to cream a profit for the bookmaker.