What Is an Underdog Bet? A Beginner’s Guide

For individuals new to the world of sports betting, understanding the terminology is a critical first step. Among the most common and fundamental concepts is the underdog bet. The term refers to the team, player, or competitor that is statistically less likely to win a particular contest. In the context of betting, the underdog is presented with odds that reflect its perceived disadvantage, typically offering a higher potential payout for a winning wager compared to the favorite.

The concept of the underdog is not just a label; it is the cornerstone of a specific type of betting strategy. While the favorite is the expected winner, the underdog represents an opportunity for a higher return on investment, should the unlikely outcome occur. This guide will provide a comprehensive overview of what an underdog bet is, how it is represented in various odds formats, and the strategic considerations involved in placing a successful wager on a perceived weaker competitor.

 

What Is an Underdog Bet?

What is an underdog bet? An underdog bet is a wager placed on the competitor that oddsmakers have determined is the least likely to win a specific sporting event. This competitor is considered to be at a disadvantage, whether due to historical performance, current form, team composition, injuries, or other relevant factors. The underdog is the antithesis of the favorite, which is the competitor deemed most likely to win.

• The Symbolism of the Underdog: In betting lines, the underdog is almost always represented by a plus sign (+) before its odds. For example, if a team has odds of +150, it is the underdog. The plus sign indicates that a bettor stands to win more than their original stake if the underdog wins. This contrasts with the favorite, which is indicated by a minus sign (-) and requires a larger stake to win a specific amount.
• The Role of Odds: The odds assigned to an underdog reflect the implied probability of them winning. A higher plus number indicates a bigger underdog and, consequently, a lower implied probability and a higher potential payout. For instance, an underdog at +200 is considered a bigger longshot than one at +150.
• Beyond Straight-Up Bets: While the term most commonly applies to moneyline bets (a straight-up win), the concept of the underdog also extends to other betting types, such as point spreads and pucklines/runlines. In these cases, the underdog is given a handicap to level the playing field, making the bet more about the margin of victory or loss rather than just the final outcome.

The allure of the underdog bet lies in the promise of a significant payout, which can make it an attractive option for bettors looking for a higher-risk, higher-reward strategy.

 

Understanding the Different Odds Formats for an Underdog Bet

Understanding the different odds formats for an underdog bet is essential for any bettor, as it allows for a clear interpretation of potential payouts across various platforms and sportsbooks. While the plus sign (+) consistently identifies the underdog, the payout calculation differs depending on the odds format used.

• American Odds: This is the most common format in the United States. An underdog is represented by a positive number, such as +150. This number indicates the amount of profit a bettor would win on a $100 stake. A bet of $100 on an underdog at +150 would return a profit of $150, plus the original $100 stake, for a total payout of $250. The formula for calculating profit on an underdog with American odds is: (Odds / 100) x Stake.
• Decimal Odds: This format is widely used in Europe, Australia, and Canada. The decimal number represents the total payout (including the original stake) for a $1 stake. For an underdog bet, the decimal odds will be greater than 2.00. For example, an underdog with odds of 2.50 means a $100 stake would return a total of $250 ($100 x 2.50), which includes a $150 profit. The formula for calculating total payout is: Odds x Stake.
• Fractional Odds: Popular in the United Kingdom and Ireland, this format expresses the profit relative to the stake. An underdog’s odds will be shown as a fraction with a numerator greater than the denominator, such as 3/2 (read as “three to two”). This means that for every $2 staked, a bettor would profit $3. A $100 stake on a 3/2 underdog would return a profit of $150, plus the original $100 stake, for a total of $250. The formula for calculating profit is: (Numerator / Denominator) x Stake.

No matter the format, the underlying principle remains the same: the higher the number (positive American, decimal above 2.00, or a larger fractional numerator), the bigger the underdog and the larger the potential payout.

 

When to Place an Underdog Bet

When to place an underdog bet is a strategic question that moves beyond simple odds; it requires a deep understanding of value, situational factors, and a willingness to diverge from the consensus. While the high payouts are appealing, successful underdog betting is not about randomly picking longshots but about identifying specific circumstances where the odds misrepresent the true probability of an outcome.

 

Assessing Value in an Underdog Bet

Assessing value in an underdog bet is the cornerstone of a profitable betting strategy. Value betting means identifying situations where the odds offered by the bookmaker are higher than what a bettor’s independent analysis suggests they should be. This represents a long-term profitable opportunity, even if the bet does not win every time.

• Comparing Implied Probability to True Probability: Every set of odds has an implied probability. For an underdog at American odds of +150, the implied probability is 100 / (150 + 100) = 40%. A value bet exists if a bettor’s research indicates the underdog’s true chance of winning is actually greater than 40%. For example, if a bettor determines the team has a 45% chance of winning, the bet has positive expected value.
• Utilizing Statistical Models: Experienced bettors often use statistical models and historical data to quantify the “true” probability of an underdog winning. These models take into account factors that the betting market may have overlooked or undervalued, such as advanced analytics, situational trends, or recent player performance not yet reflected in the odds.
• Identifying Market Inefficiencies: Bookmakers set odds based on a combination of their own analysis and the expected public money. Sometimes, public opinion or heavy betting on the favorite can cause the underdog’s odds to become inflated, creating an even greater value opportunity. A savvy bettor looks for these market inefficiencies.

Placing an underdog bet is most strategic when a bettor has a compelling reason, based on their own analysis, to believe the odds are incorrect and a valuable opportunity is present.

 

Key Situational Factors to Consider

Key situational factors to consider are a vital part of the analysis when deciding whether to place an underdog bet. These are external variables that can impact the outcome of a game but may not be fully factored into the initial betting odds. A thorough understanding of these factors can give a bettor a significant edge.

• Injuries and Roster Changes: A last-minute injury to a key player on the favorite team, particularly a quarterback, star forward, or ace pitcher, can drastically alter the game’s dynamics. If the odds haven’t adjusted to reflect this new reality, the underdog’s chances of winning increase significantly, creating a value opportunity.
• Recent Team Performance: Sometimes, a team’s recent win/loss record might not tell the full story. A team on a losing streak might be improving in underlying metrics (e.g., offense, defense, special teams), while a team on a winning streak might be benefiting from an unsustainable string of luck. A bettor can find value by analyzing this “hidden” performance data.
• Motivation and Scheduling: A team’s motivation can play a huge role. Is the favorite resting its starters before a playoff game? Is the underdog fighting to make the playoffs or for a rival team? Is the favorite on the second night of a back-to-back road trip? These non-statistical factors can tip the scales in favor of the underdog.
• Home-Field Advantage: While bookmakers account for home-field advantage, its true impact can vary widely between teams and sports. Some teams may have a particularly strong home-field advantage that the odds do not fully reflect, especially in venues with hostile crowds or extreme weather conditions.
• Public Opinion and “Square” Money: The public often bets heavily on favorites and popular teams. This can cause the favorite’s odds to become less favorable (or their point spread to increase), in turn making the underdog’s odds more attractive. This is a classic “fading the public” strategy.

By carefully analyzing these situational factors, a bettor can often find compelling reasons to back an underdog, especially when the market has overlooked the true impact of these variables.

 

Odds Format	Underdog Indicator	Calculation Example (+150 Odds, $100 Stake)	Total Payout
American	Positive number (+)	(150 / 100) x $100 = $150 Profit	$250
Decimal	Number greater than 2.00	($100 x 2.50) = $250 Total Return	$250
Fractional	Numerator is larger than denominator (e.g., 3/2)	(3/2) x $100 = $150 Profit	$250

 

Managing Risk with an Underdog Bet

Managing risk with an underdog bet is a crucial aspect of any long-term betting strategy. While the allure of high payouts is undeniable, the very nature of an underdog bet means it has a lower probability of winning. Proper bankroll management and emotional discipline are essential to navigating the inherent volatility and avoiding significant losses.

 

Bankroll Management for Underdogs

Bankroll management for underdogs requires a careful and disciplined approach to capital allocation. Because underdog bets are less likely to win, a bettor can expect to experience longer and more frequent losing streaks (known as negative variance). A sound bankroll strategy is designed to withstand these downswings and ensure the bettor stays in the game long enough for their positive-expected-value bets to pay off.

• Staking Smaller Amounts: A common practice is to use a smaller unit size for underdog bets compared to bets on favorites or on even-money lines. For example, a bettor might use a 1-2% stake for a standard bet but reduce it to 0.5-1% for a high-odds underdog bet. This mitigates risk and protects the bankroll during the inevitable losing streaks.
• Flat Staking vs. Proportional Staking:
  • Flat Staking: This involves betting the same amount on every wager, regardless of the odds. While simple, it can be inefficient for underdog betting, as the larger potential payouts can tempt a bettor to risk more than is prudent.
  • Proportional Staking: This method, such as the Kelly Criterion (or a fractional version), adjusts the stake size based on the perceived edge. A bettor would risk a larger portion of their bankroll on an underdog bet with a high perceived value. However, this method requires accurate analysis and can be highly volatile. For beginners, a more cautious, fixed-percentage approach is recommended.
• Accepting Losing Streaks: A bettor must mentally prepare for the reality that a series of underdog bets will not win. A five-bet losing streak on underdogs is not a sign of a bad strategy; it is a normal part of the process. A strong bankroll ensures these streaks are survivable.

By adopting a conservative bankroll management strategy, bettors can responsibly pursue the higher returns offered by underdog bets without putting their entire capital at risk.

 

Emotional Discipline

Emotional discipline is arguably the most important factor in successfully navigating the world of underdog betting. The psychological highs and lows can be more extreme with underdog wagers, as the wins are infrequent but lucrative, and the losses can pile up in quick succession. Maintaining a rational mindset is crucial to avoid common pitfalls.

• Avoiding Impulsive Decisions: The lure of a high payout can lead to impulsive, poorly researched bets. A disciplined bettor places an underdog bet only after a thorough analysis that indicates genuine value, not because of a “gut feeling” or the excitement of the odds.
• Not Chasing Losses: After a long string of losses, the temptation to place a large, emotional wager to recoup funds is strong. This is a critical error. A disciplined bettor sticks to their pre-defined staking plan and does not attempt to chase losses with larger, less-thoughtful bets.
• Staying Grounded After Wins: Similarly, a big win on an underdog bet can lead to overconfidence. A bettor might feel invincible and begin placing larger, riskier bets, ignoring their bankroll management rules. A disciplined bettor understands that a big win is a result of positive variance on a single bet and does not reflect a sudden increase in skill.
• Focusing on Process, Not Outcome: The focus should be on the quality of the analysis and the identification of value, not on the outcome of a single bet. If a well-researched underdog bet loses, it is not a sign of a failed strategy. The long-term profitability of underdog betting is a function of the quality of the analysis over a large sample size.

In essence, placing a successful underdog bet is as much about understanding the odds and the game as it is about managing the psychological challenges that come with a high-risk, high-reward strategy. By combining sound analysis with unwavering discipline, a bettor can harness the power of the underdog and make it a profitable part of their betting portfolio.