Definition
True odds represent the actual mathematical probability of an event occurring, expressed as a ratio. Unlike “payout odds,” which are set by the casino to ensure a profit, true odds reflect the pure chance of the outcome without any house edge factored in.
In context
In a standard game of Roulette with a single zero, there are 37 total numbers. The true odds of hitting a specific single number are 36 to 1 (meaning there are 36 ways to lose and 1 way to win). However, the casino’s “payout odds” for that same bet are 35 to 1. The difference between the 36-to-1 true odds and the 35-to-1 payout is where the house edge comes from.
Why it matters
Understanding true odds is the only way to see how much the casino is “charging” you to play. If the payout odds are significantly lower than the true odds, the house edge is high. In games like Craps, players seek out “Odds bets” because they are the only bets in the casino that pay out at actual true odds, meaning the house has 0% edge on that specific portion of the wager.
Related terms
In detail
To become a savvy gambler, you must learn to distinguish between the probability of an event and the price the casino pays you for that event. True odds are the “fair” price. Payout odds are the “market” price.
The Math of True Odds
True odds are calculated by comparing the number of ways an event can not happen to the number of ways it can happen.
Formula:
Ways to Lose : Ways to Win
Examples:
- A Coin Flip: There is 1 way to lose (Tails) and 1 way to win (Heads). The true odds are 1 to 1.
- A Six-Sided Die (Rolling a 6): There are 5 ways to lose (1, 2, 3, 4, 5) and 1 way to win (6). The true odds are 5 to 1.
- Roulette (Double Zero): There are 38 pockets. If you bet on Red, there are 20 ways to lose (18 Black + 0 + 00) and 18 ways to win. The true odds are 20 to 18 (or 1.11 to 1).
Why the Casino Doesn’t Pay True Odds
If a casino paid true odds on every bet, it would eventually go bankrupt. They would have no money to pay the dealers, keep the lights on, or provide the “free” drinks. The “House Edge” is simply the gap between the true odds and the payout odds.
Let’s look at the Single-Number bet in Roulette again:
- True Odds: 36 to 1 ($1 bet should return $36 profit).
- Payout Odds: 35 to 1 ($1 bet returns $35 profit).
- The “Tax”: The casino keeps that $1 difference. Over millions of spins, that $1 difference per winning bet aggregates into the millions of dollars the casino earns in profit.
The “Holy Grail”: Bets that Pay True Odds
In the entire casino, there is only one common bet that pays at exact true odds: the “Odds” bet in Craps. After a “point” is established in Craps, the casino allows players to place an additional bet behind their original Pass Line wager. This “behind the line” bet is unique because the house takes no edge.
- If the point is 4 or 10, the true odds are 2 to 1. The casino pays exactly 2 to 1.
- If the point is 5 or 9, the true odds are 3 to 2. The casino pays exactly 3 to 2.
This is why Craps is a favorite of math-conscious gamblers. By “taking max odds,” you are effectively diluting the house edge of your original Pass Line bet, making the overall game much “fairer.”
True Odds in Video Poker and Slots
In slots, true odds are hidden behind software. You don’t know how many “virtual stops” are on a reel, so you can’t calculate the true odds of hitting a jackpot. This is why many professional gamblers prefer table games or Video Poker—the “map” (the deck of cards or the roulette wheel) is visible, allowing for the calculation of true odds.
Common Misconceptions
- “The odds changed because I’ve been losing.” This is the Gambler’s Fallacy. True odds are static for every independent event. A roulette wheel doesn’t “remember” that it hit Black five times in a row. The true odds of it hitting Red on the next spin remain exactly the same.
- “True odds and Probability are the same.” Not quite. Probability is usually expressed as a percentage (e.g., a 50% chance). True odds are expressed as a ratio (e.g., 1 to 1). If an event has a 20% probability, the true odds are 4 to 1 (4 ways to lose, 1 way to win).
Strategy Tip
Whenever you look at a new game or a “side bet,” always ask: “What are the true odds, and what is the payout?” If a side bet pays 40 to 1, but the true odds are 60 to 1, you are paying a massive “premium” (house edge) to play that bet. The closer the payout odds are to the true odds, the better your chance of leaving the casino with money in your pocket.