What is the Vigorish in Sports Betting?

Can you explain the vig in sports betting? Essentially, the vig, also known as vigorish or juice, refers to the advantage held by the house. It’s worth noting that this term can have a somewhat negative implication, as it is also associated with the typically exorbitant interest rates imposed by illegal lenders.

Every sportsbook aims to establish lines that attract an equal amount of betting action on both sides. By achieving this balance, the sportsbook can profit from the vig, which is the difference between the amount wagered by the losing side and the payout received by the winning side.

In an ideal world, online sportsbooks would have no stake in the results of the sporting events you wager on. They would be able to solely depend on the vig to generate profits, a fair compensation that most bettors agree sportsbooks deserve. However, in reality, achieving an equal distribution of bets across different lines is challenging. This imbalance in action can potentially cause sportsbooks to incur losses.

Continue reading to learn more about the functioning of vig, how sportsbooks utilize it to generate profits, and how you can determine the vig by simply analyzing the betting lines.

How do sportsbooks make money?

Sportsbooks generate revenue by receiving a commission, commonly referred to as the vig, from bets placed.

The majority of the time, the vig amounts to less than 5%. This is a sum that most gamblers willingly give up in return for the services offered by the sportsbooks.

Although sportsbooks do not openly publish the vig, it is quite simple to determine it yourself by analyzing the odds. This will indicate when a sportsbook is offering an unfavorable vig on a bet, allowing you to steer clear of it.

How is the vig calculated?

Regrettably, the vig is not readily available on bets as sportsbooks do not disclose it. Nevertheless, sportsbooks do provide the odds, which ultimately reveal all the information you require about the vig.

Before proceeding, you only need to perform a simple mathematical calculation.

The formula that can be utilized to calculate vig on your own is as follows:

The formula to calculate the Vig is: (Favorite odds / (Favorite odds + 100) x 100) + (100 / (Underdog odds + 100) x 100) – 100.<br><br>The Vig can be determined by using the above formula.

How to calculate the juice yourself

Certainly, the example provided above does not imply that every bet with only two potential outcomes will have equal odds on both sides.

In the NFL opener mentioned earlier, the moneyline could be represented as Texans with odds of +350, while Chiefs have odds of -460.

You can determine the vig yourself by converting the odds to implied probability in this situation or any other where one side is considered a favorite over the other.

Afterwards, you can easily calculate the sum of the two probabilities and compare the resulting value to 100%. The discrepancy between the two is referred to as the vig.

To determine the probability of the favorite winning, you can convert the negative moneyline odds by extrapolating the figure and plugging it into the formula below.

The probability can be calculated by taking the odds and dividing them by the sum of the odds and 100, then multiplying the result by 100.

Hence, when the odds are at -460, sportsbooks are attributing an 82.14% probability of victory to the Chiefs (calculated as 460 divided by the sum of 460 and 100, multiplied by 100 equals 82.14%).

To determine the probability of the underdog winning, you can convert positive moneyline odds into a probability by extrapolating the given figure and plugging it into the following formula:

The probability is equal to 100 divided by the sum of the odds and 100, multiplied by 100.

Consequently, with odds of +350, sportsbooks are indicating that the Texans have a 22.22% probability of winning (calculated as 100/(350 + 100) X 100 = 22.22%).

When you combine 82.14% with 22.22%, the result is 104.36%. The discrepancy between 104.36% and 100% is 4.36%.

The Texans @ Chiefs moneyline implies that the sportsbook is making a 4.36% vig.

How does vig work?

To gain a better understanding of how vig operates in betting, it is helpful to examine a straightforward example.

The NFL season is set to commence with the Houston Texans paying a visit to the Kansas City Chiefs.

The majority of sportsbooks have established the game’s totals line at approximately 54.5 points (O/U). This implies that you have the option to place a bet on either the total combined score surpassing or falling below that line. Regardless of whether you choose to bet on the over or the under, most sportsbooks will offer odds of -110.

The line set by the sportsbooks aims to attract an equal number of bets for both the over and the under. In case one side receives more bets, the sportsbook will adjust the line to encourage individuals to wager on the opposite side until a balance is achieved in the number of bets for each side.

If you decide to bet on either the under or over, the odds of -110 imply that you will need to wager $110 in order to potentially win $100, in addition to receiving your initial bet back. In this particular scenario, assuming both sides receive equal bets, a total of $110,000 will be wagered on each option, resulting in a combined amount of $220,000 in bets.

Keep in mind that when placing a totals bet with a half-point, there are two potential outcomes, and only one side can emerge as the winner. To illustrate, suppose the game concludes with a score of 31-27 in favor of the Chiefs, resulting in a total of 58 points. In this case, the over bet would be deemed victorious.

A total of $110,000 was wagered on the over at -110 odds. As a result, the bettors will receive $100,000 in profits in addition to their initial bet of $110,000, resulting in a grand sum of $210,000.

The sportsbooks will refund the $110,000 wager placed on the over, granting it to the victorious bettors. The remaining $100,000 will be covered by the $110,000 that was lost in under bets.

The sportsbooks end up making a profit of $10,000 from the $220,000 in totals bets for this game, resulting in a vig of $10,000.

The sportsbooks earned a 4.5% vig on the bet, which is equivalent to approximately $10,000 out of $220,000.

What’s the difference between vig and overround?

In gambling, there is essentially no distinction between vig and overround. While they may be expressed in various ways, both vig and overround serve as means for sportsbooks to generate profits.

Regardless of whether you refer to it as an overround or a vig, it remains the profit margin that sportsbooks incorporate into the price or odds of any bet.