Implied Probability

Implied probability turns a price into something a bettor can reason about. For decimal odds it is one divided by the price, so 4.00 implies 25%. For fractional odds it is the denominator over the sum of both numbers, and for American odds it depends on the sign. The figure is not the bookmaker's true estimate of the chance, because every price carries margin, so implied probabilities across a market always sum to more than 100%.

That gap is the whole commercial point. The excess over 100% is the overround, and removing it proportionally produces the "fair" or de-vigged probabilities that models are judged against. A bettor who believes the fair chance of an outcome is higher than the implied probability after margin has, by definition, found value. This is also how closing lines are used as a benchmark: the market's implied probabilities at kick-off are treated as the most efficient available estimate, which is why beating them consistently is the standard test of a genuine edge.