Odds, Pot Odds, and Implied Odds
To play poker well, you must understand the terms odds, pot odds, and implied odds. Let’s be sure that you grasp each term thoroughly before we go on.
Probability and odds
“Probability” is the likelihood of an event happening. It is a number between zero and one, and is often expressed as a percentage. For instance, a .70 probability of rain today is the same as a 70% chance of rain.
“Odds” are another way of expressing probability and are more applicable to games of chance such as poker. Odds are shown as a pair of numbers separated by a colon; the pair represents a ratio between the probability of an event happening and its not happening. Being somewhat whimsical, we could say (from our example above) that rain is a 7:3 “favorite” today. That is, the odds of rain are 7:3 in its favor; for every seven times it rains on a day like today, there will be three dry days. The opposite of favorite is “underdog” (or “dog” for short). If you say, “That team is a 5:2 underdog,” you mean that for every two times they win in this situation, they will lose Five.
What do odds mean to betting? Let’s consider the weather forecast above. You and a friend decide to bet on whether it will rain. Given that you know rain is a 7:3 favorite, what is a “fair” bet? If you choose to bet on rain, and your friend bets on no rain, you should put up $7 for each $3 he wagers. Over 10 days, it will probably rain seven times. You will collect $3 from your friend on each rainy day for a total of $21. On the remaining three days, it will not rain. Your friend will collect $7 from you on each dry day for a total of $21. Thus, on any given day, one of you will pay the other, but in the long run, you will both expect to break even. Now, suppose you can find somebody willing to put up $4 for each $7 you bet, but you know that rain is indeed a 7:3 favorite. You still lose $21 on the three dry days, but you collect $4 each of the seven rainy days for a total of $28. In 10 average days, you make a $7 profit! This book will teach you to find and exploit opportunities where you have a similar edge over your opponents.
Let’s look at a hold’em example. Suppose you have flopped a heart flush draw. That is, you have two hearts in your hand, and two more come on the flop. What are the odds of making your flush on the next card (the turn)? There are a total of 13 hearts in the deck; you have seen four of them, leaving nine more. You have seen a total of five cards (your two plus three in the flop). That leaves 47 unseen cards, of which nine are the hearts you want to see. There are 38 cards that do not make your flush and nine that do; the odds are 38:9 “against.” You are a 38:9 (slightly worse than 4:1) underdog to make your flush on the turn.
Pot odds
Pot odds are the odds being offered to you by the pot compared to the amount of money you must invest in it. For instance, suppose after the river card is turned up, there is $30 in the pot. Your opponent bets $6. The pot now has $36 in it, and you have to call $6 to see his hand. You are getting pot odds of 6:1. You will also hear the expression “the pot is laying you 6:1.” Now your choice is (relatively) easy: if you are no worse than a 6:1 underdog to win the pot, you call the $6; otherwise you fold.
Pot odds also apply to draws. Suppose you have a draw that is a 3:1 underdog to be made. For you to call a bet there should be at least three times as much money in the pot as the amount you must call. Of course, that includes any bets that precede your call. For instance, if the pot contains $15 and your opponent bets $6, the pot now contains $21 and is laying you 3.5:1. Since you are only a 3:1 underdog, you can call.
Implied odds
Going a step beyond pot odds are implied odds. More accurately, they might be called implied pot odds. When you compute pot odds, you can only consider the money that’s already in the pot.
The concept of implied odds lets you ask the question, “If I make the hand I’m drawing to, how much more money will I win than what’s already in the pot?”
For example, suppose you have a flush draw with one card left to come. You know you are about a 4:1 underdog to make your flush. There is $16 in the pot, and your opponent bets $6. The pot (now $22) is laying you about 3.7:1, but you’re a 4:1 dog to make your flush. According to strict pot odds, you can’t call. However, suppose you’re “sure” that your opponent will call a $6 bet on the river if you make your flush. Now you can act as if the pot contains $28 (what it currently contains plus the $6 more you will win if you make your flush). You can make the $6 call with your flush draw.
Of course, when considering pot odds or implied odds for a draw, you must be “sure” that you will win the pot if you make your draw. If you’re not sure, then the pot must lay you a higher price to make your draw correct. Also, when considering implied odds, you must be just as sure that your opponent will call your bet after you have made your hand.