In sports betting, implied probability is what the odds suggest the likelihood of an outcome happening is. It is calculated by dividing one by the decimal odds. So, if the Chicago Bears are given odds of 2.50 to win a match, their implied probability of winning is 0.4, or 40%. If they are given odds of 1.50 to win a match, their implied probability of winning is 0.67, or 67%.
Expected value relates to how much you can expect to win from a wager. It is a theoretical measure that is based on the overall probability of it winning. Let’s use an example of betting on the Chicago Bears at 2.50 to illustrate expected value.
If you placed a $10 wager on the Bears to win at odds of 2.50 then you stand to make a return of $25, including your stake. Assuming the implied probability of them winning (which we’ve already established is 40% based on these odds) is an accurate reflection of their real probability of winning, you will be paid $25 40% of the time that you make this wager. You will lose $10 60% of the time that you make this wager.