"Implied probability, defined"

Implied probability is a set of odds expressed as a percentage chance. For decimal odds it is simply 1 / odds.

Decimal odds of 2.50 imply 1 / 2.50 = 40%. Odds of 1.25 imply 80%. The conversion is arithmetic, not opinion.

The catch is that across a whole market the implied probabilities sum to more than 100%. In a two-way match market you might see 55% and 50%, totalling 105%. That extra 5 points is the vig — the margin built into the prices — which means raw implied probability always overstates the true chance.

To recover an honest number the margin must be removed, which is what de-vigging does. Only then can two markets be compared like for like, or compared against a model.

See how to convert odds to implied probability for worked examples across decimal, fractional and moneyline formats.