What implied probability tells you
Implied probability is the chance the sportsbook is pricing into the line. A line of -110 implies 52.38%; a line of +200 implies 33.33%. It's the break-even win rate that price requires: bet long enough at -110 and you need to win 52.38% of the time to break even on the wager itself, before accounting for the book's margin.
The formulas
Positive American odds: implied % = 100 / (odds + 100). So +200 = 100 / 300 = 33.33%.
Negative American odds: implied % = -odds / (-odds + 100). So -110 = 110 / 210 = 52.38%.
Decimal odds: implied % = 1 / decimal. So 1.91 decimal = 52.38%.
Why it includes the vig
The implied probability of both sides of a market sums to more than 100%. On a typical -110 / -110 two-way market, both sides imply 52.38%, summing to 104.76%. The 4.76% over 100% is the book's margin (the vig).
Sharp bettors use the no-vig version of implied probability to estimate what the book really thinks about the true probability of an outcome. Try our No-Vig Probability Calculator to see vig-free implied probabilities.
How to use it
Compare the book's implied probability to your own estimate of the true probability of an outcome. If your estimate is higher than the implied probability, the bet has positive expected value. If lower, negative. This is the heart of value betting.
For more on reading odds, see How to Read American Odds.