True Odds vs Implied Odds: How to Find the Real Price
True odds vs implied odds explained with 4 worked examples. Learn how to strip vig from any line and find fair probability using our free de-vig calculator.
What Are Implied Odds?
Every sportsbook line encodes a probability. That probability is called the implied odds (or implied probability). It is the chance of an outcome winning as expressed by the odds the book posts. It is not the true chance. It is the price the book charges you, and that price includes their cut.
Converting any line to implied probability is straightforward. At -150, the implied probability is 150 / (150 + 100) = 60.0%. At +200, it is 100 / (200 + 100) = 33.3%. The odds converter handles this instantly for American, decimal, and fractional formats. If the conversion math is unfamiliar, the odds formats guide walks through every formula.
The critical point: implied odds always overstate the real probability on each side. The book inflates the implied probability on every outcome so the total includes their margin.
Consider a market priced at -180 / +155:
- Favorite implied probability: 180 / 280 = 64.3%
- Underdog implied probability: 100 / 255 = 39.2%
- Total: 103.5%
That 3.5% above 100% is the overround. It is the vig baked into every market. The implied odds on each side are inflated by the book's margin, which is why they sum to more than 100%. This is how sportsbooks guarantee a profit regardless of which side wins.
What Are True Odds?
True odds (also called fair odds or no-vig odds) represent the actual probability of an outcome after removing the sportsbook's margin. They are the odds you would get in a perfectly efficient market with zero vig.
Using the same -180 / +155 market:
- Book sum: 103.5%
- Favorite true probability: 64.3% / 1.035 = 62.1%
- Underdog true probability: 39.2% / 1.035 = 37.9%
- Total: 100.0%
The favorite's true probability is 62.1%, not the 64.3% the sportsbook displays. The underdog's true probability is 37.9%, not 39.2%. The difference between implied and true is the vig, distributed across both sides.
True odds are what you need for every downstream calculation. You cannot compute expected value with implied odds because those odds include the house's cut. Plugging implied probability into the EV formula guarantees a negative result on any bet priced at standard vig. The math only works with true probability as the input.
How to Find True Odds: 4 De-Vig Methods
De-vigging is the process of converting implied odds into true odds. The de-vig calculator runs seven methods simultaneously. Here are the four most common, each applied to the same -180 / +155 market.
Method 1: Multiplicative (equal-margin)
Divide each implied probability by the book sum. This assumes the vig is distributed proportionally to each side.
- Favorite: 64.3% / 1.035 = 62.1%
- Underdog: 39.2% / 1.035 = 37.9%
Simple, fast, and sufficient for most two-way markets.
Method 2: Additive (equal-vig)
Subtract a flat amount from each side so the total reaches 100%. The excess is 3.5%, so subtract 1.75% from each.
- Favorite: 64.3% - 1.75% = 62.5%
- Underdog: 39.2% - 1.75% = 37.5%
This method treats both sides as equally taxed in absolute terms. It tends to overestimate longshot probabilities in markets with large favorites.
Method 3: Shin method
The Shin model assumes part of the overround comes from the book protecting itself against informed bettors. It redistributes vig based on the odds, shifting more margin onto longshots and less onto favorites.
For this -180 / +155 market, the Shin output is close to multiplicative:
- Favorite: ~62.3%
- Underdog: ~37.7%
The Shin method matters most in multi-runner markets like horse racing or multi-outcome prediction markets where favorite-longshot bias is pronounced.
Method 4: Power method
The power method raises each implied probability to a power that normalizes the total to 100%. It produces results between multiplicative and Shin for most two-way markets.
For two-outcome markets, the practical differences between methods are small. For markets with 3+ outcomes or extreme longshots, the gap widens. The de-vig calculator shows all methods side-by-side so you can compare.
Why True Odds vs Implied Odds Matters for EV
The gap between true odds and implied odds is the entire basis of profitable betting. Every +EV bet exists because you are paying implied odds that are better than the true probability.
Worked example: finding edge with true odds
A sportsbook posts an NBA line at +140 on the underdog. You want to know if this is a good bet.
Step 1: Get the true probability. Pinnacle (the sharpest widely available book) closes at -155 / +135 on this game. De-vig the Pinnacle line using the multiplicative method.
- Favorite implied: 155 / 255 = 60.8%
- Underdog implied: 100 / 235 = 42.6%
- Book sum: 103.4%
- Underdog true probability: 42.6% / 1.034 = 41.2%
Step 2: Compare to your available odds. Your book offers +140. That implies 100 / 240 = 41.7%. But the true probability is 41.2%. Your book is pricing the underdog as less likely than the market's best estimate says. You are getting a better price than fair value.
Step 3: Calculate EV. Using the true probability of 41.2% and odds of +140:
EV = (0.412 x $140) - (0.588 x $100) = $57.68 - $58.80 = -$1.12
Actually, this is slightly -EV. The edge is not there. Your available price (+140) needs to be better than +143 (which corresponds to 41.2% implied) for the bet to be +EV.
This is exactly why the distinction between true and implied matters. Without de-vigging the sharp line, you would compare +140 to raw implied odds and get the wrong answer. Run every comparison through the EV calculator with de-vigged probabilities as input.
Worked example: when the edge is real
Same setup, but your book offers +155 instead of +140.
Your available implied probability: 100 / 255 = 39.2% True probability (from Pinnacle de-vig): 41.2%
EV = (0.412 x $155) - (0.588 x $100) = $63.86 - $58.80 = +$5.06
That is a 5.1% edge. Now the bet is worth taking, and you can size it using the Kelly Criterion.
The math is identical every time. True probability is the reference point. Your available odds are the comparison. If your price implies a lower probability than true, you have edge. If it implies a higher probability, the vig is eating you alive.
True Odds and Implied Odds on Prediction Markets
Prediction market prices are implied odds in their purest form. A "Yes" contract at $0.58 on Kalshi implies 58% probability. A "No" contract at $0.47 implies 47%. Combined: 105%. The 5% excess is the spread, which functions as vig.
The de-vig process is identical. Divide each side by the book sum:
- Yes true probability: 58% / 1.05 = 55.2%
- No true probability: 47% / 1.05 = 44.8%
On top of the spread, platforms charge explicit fees. Kalshi's taker fee reduces your net payout on wins. Polymarket takes 2% of net profits. These fees stack on top of the spread vig, which means the effective vig on prediction markets is often higher than it first appears. The prediction market fee calculator accounts for both layers.
One structural difference: prediction markets do not have a single "house" setting the line. Prices emerge from the order book. This means the spread can be tighter on liquid markets and wider on thin ones. On a high-volume Polymarket contract with $5M+ in liquidity, the spread might be 1-2%. On a low-volume Kalshi contract, it can exceed 10%. Always check the actual bid-ask before assuming the mid-market price is available. For more on prediction market structure, read the fees guide.
Common Mistakes When Comparing Implied and True Odds
Using implied odds directly in EV calculations. This is the most common error. If you plug implied probability into the EV formula, every bet at standard vig returns negative EV by definition. That is not because the bet is bad. It is because you are using a probability that includes the house's margin. Always de-vig first.
Assuming all vig is equal. A -110/-110 market has 4.5% hold. A -130/+110 market has 2.6% hold. The second market has less vig even though the favorite side looks more expensive. You cannot judge vig from one side of the line. You need both sides to calculate the book sum and hold.
Treating the de-vigged line as your probability estimate. The de-vigged line is the market's best estimate of true probability, not yours. If you have a model that disagrees with the market, your probability estimate might be higher or lower than the de-vigged number. The de-vigged line is one input. It is the best available input in most cases, but it is not the only valid one.
Ignoring vig differences between books. A -115 line at a recreational book and a -108 line at Pinnacle have different implied probabilities. De-vig both separately. The one with less vig gives you a more accurate true probability estimate because less margin distorts the number. This is why sharp books like Pinnacle are the standard reference for true odds. Their lines carry less vig, so the de-vigged output is closer to reality.
Forgetting fees on prediction markets. The contract price is only the first layer of implied cost. Platform fees add a second layer that further separates the price you pay from the true probability. De-vig the spread, then subtract fees. The de-vig calculator handles the first step. The fee calculator handles the second.
The De-Vig Calculator: Your Bridge Between Implied and True
Every concept in sports betting math connects through a pipeline. True odds vs implied odds is not a standalone concept. It is the critical conversion step that sits between reading odds and calculating expected value.
The pipeline: read the odds, convert to implied probability, de-vig to find true probability, calculate EV, size with Kelly, then verify with closing line value.
The de-vig calculator is the bridge. Plug in both sides of any two-way market or all outcomes of a multi-way market. It returns true probabilities across seven de-vig methods, shows the overround and hold, and gives you the clean numbers your EV calculation needs. Skip this step and every number downstream is polluted by the book's margin.
Frequently asked questions
- What is the difference between true odds and implied odds?
- Implied odds are the probabilities derived directly from the sportsbook's posted line, including their vig margin. True odds are the fair probabilities after removing that margin. On a -180/+155 market, the implied probabilities sum to 103.5%. The true probabilities sum to exactly 100%.
- How do I calculate true odds from a betting line?
- Convert each side to implied probability, sum them to get the book sum, then divide each side by that sum. This is the multiplicative de-vig method. For a -110/-110 market, each side implies 52.4%, the book sum is 104.8%, and true probability is 52.4% / 1.048 = 50.0% per side.
- Why do implied probabilities add up to more than 100%?
- The excess above 100% is the overround, also called vig or juice. It is the sportsbook's built-in margin. A book sum of 105% means the sportsbook keeps roughly 4.8% of every dollar wagered, regardless of which side wins.
- Can you calculate EV using implied odds instead of true odds?
- You should not. Implied odds include the vig, so using them in an EV formula produces a result that is biased negative. You will conclude every bet is -EV because the house margin is baked into the probability. De-vig first, then calculate EV with the true probability.
- Do prediction markets have implied odds and true odds?
- Yes. If a Yes contract trades at 58 cents and No at 47 cents, the combined price is $1.05. The implied probabilities are 58% and 47%, summing to 105%. De-vig them the same way you would a sportsbook line. The 5% overround is the spread-based vig.