Implied probability is the chance of an outcome that is baked into the book odds. It converts a price into a percentage so you can compare it to your own estimate.
The math
For decimal odds, the conversion is simply:
implied probability = 1 / decimal odds
Worked example. Decimal odds of 1.50 imply 1 / 1.50 = 66.7%. Odds of 2.00 imply 1 / 2.00 = 50%. Shorter odds (a heavier favorite) mean a higher implied probability.
The overround (vig)
Add up the implied probabilities of both sides of a match and you get more than 100%. That excess is the overround, also called the vig or juice, and it is the book's built-in margin.
Example. If both players are priced at 1.90, each implies 1 / 1.90 = 52.6%, and the two sum to 105.2%. That extra 5.2% is the house edge. It is why beating the closing price consistently is hard, and why a real model edge has to clear the vig before a value bet exists.
Smashrs always measures edge against these real book-implied probabilities, never against a price invented from the model itself.