Vig Bookie

• Bookies Charge Vig
• Vig Bookie
• Vig. Bookie Payment
• Vig Bookie
• The Vig Bookie
• Typical Bookie Vig
• Vig. Bookie Payment

Dec 29, 2020 Vig is short for the word 'vigorish.' Traditionally, it refers to the interest charged from borrowing a loan. In sports betting, it's what the bookie charges to book your action. The vig can also be known as 'the juice,' 'the cut,' or 'the take.'. The word 'bookie' has a specific connotation, though. A bookie is usually an individual running a sports betting business outside the law. You never hear someone talking about a Las Vegas bookmaker as a 'bookie.' The term has more of a specific connotation than that.

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• Sportsbooks take a cut of every bet placed on a sporting event, called the ‘juice' or ‘vig'
• The vig influences odds, so you need to remove it for a clear picture of likely outcomes
• Learn how to remove the vig to place smarter bets with this guide

'Vig' (also known as vigorish or ‘juice') refers to the fee a bookmaker or sportsbook charges a bettor for placing their wager. The vig allows the bookmaker or sportsbook to make money on every betting line, regardless of the actual outcome of the event. Bettors win and lose, but the right vig guarantees the bookies always win.

Sportsbooks collect the vig by adding it into the odds as overround, or setting probabilities such that the total implied probability of all potential outcomes exceeds 100%. Because it's baked into the odds as overround, the vig will shift the numbers, so you need to remove it to gain an accurate picture of what bookmakers actually expect to happen in a game.

Check out our comprehensive guide if you want more detail on how and why your favorite sportsbooks take their cut.

How to Read and Calculate Sport Odds

Before you can remove the vig from the line, you need to be confident effectively reading sports odds.

You've probably have seen a spread similar to this:

Bookies Charge Vig

• L.A. Rams: -3.5 -110
• Seattle Seahawks: +3.5 -110

The -110 indicates that for the bettor must wager $110 for every $100 they want to win.

The $10 withheld from the bettor is the vig, which the bookmaker or sportsbook keeps as their profit.

If you need a hand converting odds, check out our guide on how to read and calculate sports betting odds.

Why You Should Remove the Vig

Sportsbooks are in the business of dealing risk, but they like to play things safe themselves. Their goal with any betting line is to ensure the money comes in on each side in optimal proportions, such that they can cover their payout obligations while still pocketing some for themselves. This is one reason the odds will change in the lead up to an event: to attract more action on one side of the line, or to include a higher ‘vig' percentage to guarantee profit.

Because the odds consider profitability rather than likely outcomes alone, you need to remove the vig from the betting line to gain an accurate picture of the actual probabilities oddsmakers assign to each potential outcome. We refer to this as ‘actual probability' to differentiate it from ‘implied probability,' which includes juice in the form of overround.

Finding this actual probability will help you handicap your wagers by getting a clearer view of the oddsmaker's expectations. This exercise allows you to compare how much the sportsbook has inflated the price on a betting line, or to compare the handling fees baked into the odds at two different sportsbooks.

That said, it's key to remember that you are ultimately wagering on the odds as they're offered. When analyzing the potential value of any given bet, you should compare your estimated probability with the implied probability suggested by the odds with the vig included.

How to Remove the Vig

There are a number of calculations that need to be completed to remove the vig and look at the actual probabilities oddsmakers have assigned to each outcome of an event. Follow the following steps for a ‘clean line' that isn't influenced by the money coming in on each side:

1. Calculate implied probability (including the vig) of all outcomes.
2. Total implied probability includes overround, and we can use this value to find the vig as a percentage, or to remove it from the betting line.
3. Calculate actual probability by removing the overround (which also removes the vig) to bring total implied probabilities to 100%.
4. Compare actual probability with your own handicapping efforts to determine if a line has value.

How to Calculate Implied Probability

The formula to find implied probability is risk/return = implied probability.

As an example, let's find the implied probability of the following NHL moneyline:

In this scenario, you'll need to bet $300 to win $100 (with a total return of $400).

Using the above formula of risk/return: 300(risk)/400(return)=0.75. The 0.75 number, or 75%, is the implied probability of the Capitals winning.

For the Vegas Golden Knights you would calculate: 100(risk)/325(return)= 0.30. 30% is the implied probability of the Golden Knights winning.

Now, you've got to determine the total implied probability, also known as the overround. To do so, you add each team's implied probability, which would be .75 + .30 = 1.05, or 105%.

As you can see, the sum of total implied probabilities is more than 100. By effectively taking wagers on a range of outcomes that's greater than the actual possible outcomes, overround is a simple way for bookmakers to guarantee they take in more money than they pay out. In the example above, the bookmaker would expect to pay out $100 after receiving $105 worth of wagers.

How to Calculate the Vig as a Percentage

The vig is technically defined as the associated percentage amount the sportsbook will profit on the line. Overround can be used to calculate this percentage using the following formula:

Vig = 1 – (1/Overround) x 100

Vig = 1 – (1/105) x 100

Vig = .0476

Vig = 4.76%

It's worth noting that you don't need to calculate the vig as a percentage to find actual probability, or the implied probability of each outcome before books add the vig.

How to Calculate Actual Probability (Odds without the Vig)

Vig Bookie

You must remove the overround to find actual probability by dividing each team's implied probability by the total implied probability (or overround).

Actual probability = team implied probability/total implied probability

So 75.00/105.00 = .71 or 71%. The actual probability of the Capitals winning is 71%.

30.00/105.00= .29 or 29%. The actual probability of the Golden Knights winning is 29%.

To confirm you have done your calculations correctly add up both of your actual probabilities. The total should be 100 or 1, as a percentage or decimal, respectively:

.71 + .29 = 1.00. or 100%.

By removing the overround, we can see the actual probabilities of each outcome as estimated by the bookmakers before they account for the vig.

Actual Probability Provides an Inside View

Removing the vig provides a behind the scenes viewpoint for sports bettors. If you don't remove the vig or juice, you won't know what the sportsbook actually thinks is going to happen in the game.

Vig. Bookie Payment

Calculating the vig on a betting line also helps you identify those bets that are simply overpriced.

For more great articles on sport betting tactics and tips, check out our guide to the sharpest strategies in the business.

According to a study by the American Gaming Association, 38 million American adults planned to bet on the 2019 NFL season. That's 15% of the adult population, betting only on professional football. That's a huge potential client base.

It's nice to win bets, but the guaranteed money is in bookmaking. Once you see the profits from betting explained, you won't want to be a gambler anymore. You'll want to be a bookie.

What Do Bookies Do?

Before looking at how bookmakers, or bookies, get paid, it's worth considering what bookies do. In other words, why should bookies get paid at all?

A bookie is someone who facilitates gambling. They make it possible for people to place bets by:

• Setting the odds (and sometimes changing them, but more on that later)
• Accepting and placing bets
• Paying out winnings

In popular culture, bookies are often shady figures. There are countless movies where a bookie sends some goons to break some problem gambler's knees after he can't pay.

Real bookies are nothing like that, especially now that sports gambling is legal in many places. Even with legal gambling, most bettors still place their wagers with local bookies. If these bookies broke knees, they would quickly lose all their customers.

In reality, a bookie is just a person who makes it possible for you to gamble. Like anyone else who provides a service, they exact a fee for it.

Betting Explained: The Vig

The fee that bookies charge is called the vigorish, or the vig. People also call it the juice, the take, or the margin. Because bookies usually don't place bets themselves, they make their money from this extra fee they charge on every bet, win or lose.

The place you can see the vig the clearest is in the moneyline for a particular game. Let's use a football game, Eagles versus Bears, as an example.

Suppose the Eagles are the home team and are the favorite to win the game. The point spread for the game might be Eagles -6.5. That means the Eagles must win by at least seven points for you to win your bet, or to 'cover' the spread.

But, the betting line will also include the moneyline. As the favorite, the Eagles are probably sitting at -110. That means if you bet $100, you would only win $90 (in addition to receiving your original bet back). If you wanted to win $100, you'd have to bet $110.

The easiest way to think about the moneyline is the amount you would have to bet to win $100. In this case, that extra $10 is the vig or the fee for the bookie.

There is no standard vig. The most common one is -110 (in other words, an 11 to 10 advantage for the bookmaker), but that varies depending on the game, the teams, and the bookmaker.

The moneyline could even go the other way. If the bookie wanted to encourage more people to bet the Bears, they could set the moneyline at +110. That means for every $100 you bet, you would win $110.

Balancing the Book: Betting Lines Explained

Vig Bookie

Because bookies make their money from the vig, they want to encourage equal numbers of people to bet on each side of a game.

From our example, they want the same number of people to bet the Eagles and the Bears. The bookie will not have to cover any winning bets himself and can pocket his 10% profit.

With sports gambling, there are two ways a bookie can adjust which side people bet on: shifting the point spread or shifting the moneyline.

Suppose after the bookmaker set the point spread at Eagles -6.5, most people placed their bets on the Eagles. The bookmaker, seeing this, would move the spread to Eagles -7.5 or higher to encourage people to bet the Bears.

Again, the bookmaker wants to get the bets on each side close to even to avoid an unbalanced book.

On the other hand, if the bookmaker did not want to move the spread, he could shift the moneyline down to -120 or -130. Then the payout for winning a bet on the Eagles would be lower (which is the same as having fewer bets).

The Vig Bookie

Bookmakers want a balanced book, so it's imperative that they set the right line, or adjust it as more bets come in. The volume of bets helps too: the more bets that come in, the more likely the bookie will adjust the line correctly.

Because the line is so important, the biggest bookmakers will have teams of statisticians helping them create and adjust their lines. They also recognize strong, or 'sharp', gamblers and respond to those bets by shifting the lines.

Most neighborhood bookies do not set their own lines. Instead, they rely on bookmaking services or copy lines from larger bookmakers.

What the Vig Means for Gamblers

People placing bets should never lose sight of the vig, especially if they hope to make money over the long term and not just on single bets. It changes the break-even point for betting.

With a -110 Moneyline, each time you lose a bet, you lose $100. But, each time you win, you only win back $90. Your wins are insufficient to cover your losses if you are betting the same amount each time.

In other words, the break-even percentage for winning is no longer 50%. Instead, it's higher, maybe around 53% or 54% depending on the exact vig. Given bookies set betting lines to encourage equal play on both sides, it's actually pretty easy to win 50% of your bets.

But, a sports gambler who wins half their bets will soon run out of money. Gamblers must win enough to cover the vig, hopefully with some profit left over.

For the Bookie, It's Not Really Gambling

Typical Bookie Vig

The nice part about being the bookie is that so long as you set the right lines, you're no longer gambling. It's just math: the winners and losers cancel each other out, and you pocket your fee, every time. That's betting explained for bookies.

Vig. Bookie Payment

But, just because it's simple doesn't mean it's easy. Otherwise, everyone would do it. Luckily, the right pay-per-head sportsbook service can help you start and grow your sportsbook as an independent bookie.