What is the Vigorish in Sports Betting?

What is the vig in sports betting? Quite simply, the vig, vigorish, or juice, is the house edge. The word itself carries a bit of a negative connotation because it is also used to describe the usually high interest charged by loan sharks.

The goal of every book is to set lines that draw an equal amount of action to either side of a wager. Once that happens, the site can earn the vig from the difference between what the losing side lays on the wager and how much the winning side is paid out.

That means, in a perfect world, online books would have no interest in the outcome of the sporting events you wager on. They don’t have to sweat results and can rely solely on the vig to earn profits that most players agree the books are entitled to. In actuality, though, it is difficult to get the action evenly split across lines, which means the books can lose money if the action is not balanced.

Read on for more on how it works, how sportsbooks use vig to earn money, and how to calculate vig yourself just by looking at the lines.

How do sports wagering sites make money?

Michigan sportsbooks earn money by collecting a commission on wagers. This is the vig.

Most of the time, that vig is less than 5%. It’s an amount most gamblers are happy to part with in exchange for the service provided by the books. Any more than that creates the potential for a sucker bet.

While books don’t post the vig, it’s easy enough to calculate yourself using the odds. That’ll tell you when a book is getting out of line with the vig on a bet and help you avoid it.

How is the vig calculated?

Unfortunately, books don’t post the vig on bets, so it’s not that easy to find. However, understanding how to bet while factoring in the vig is an important part of successful wagering. Fortunately, sites do post the odds, and the odds will ultimately tell you everything you need to know about the vig.

You just need to do a little math first.

The complete formula you can use to calculate vig yourself is:

(Favorite odds/(Favorite odds + 100) X 100) + (100/(Underdog odds + 100) X 100) – 100 = Vig

How to calculate the juice yourself

Of course, not every wager with only two possible outcomes pays the same odds on both sides as in the example above.

The moneyline for the same NFL opener described above might be Texans (+350) @ Chiefs (-460).

In this case, or any other where one side is a favorite over the other, you can calculate the vig yourself by converting the odds to implied probability.

Then, you simply add the two probabilities together and compare that number to 100%. The difference is the vig.

You can convert negative moneyline odds for the favorite to a probability by extrapolating the figure and using it in the following formula:

Odds/(Odds + 100) X 100 = Probability

Therefore, at -460, books are giving the Chiefs an 82.14% chance of winning (460/(460 + 100) X 100 = 82.14%)

You can convert positive moneyline odds for the underdog to a probability by extrapolating the figure and using it in the following formula:

100/(Odds + 100) X 100 = Probability

Therefore, at +350, books are giving the Texans a 22.22% chance of winning (100/(350 + 100) X 100 = 22.22%)

Add 82.14% to 22.22% and you get 104.36%. The difference between 104.36% and 100% is 4.36%

That means the book is earning a 4.36% vig on the Texans @ Chiefs moneyline.

How does vig work?

Perhaps the best way to see how vig works in betting is to look at a simple example.

The Houston Texans visited the Kansas City Chiefs to open the NFL season.

Most sites have set the totals line for the game somewhere around O/U 54.5. That means you can wager either the total combined score at over or under that line of 54.5 points. At most books, you’ll book the wager at -110 odds, whether you select the over or the under.

Books set the line at a point where it should draw an equal amount of wagers on the over and the under. If there is heavier wagering on one side, a site will move the line to incentivize people to bet the other side until there is an equal amount of betting on both sides.

The -110 odds mean that whether you wager the under or over, you’ll have to lay down $110 to try to win $100, plus your bet back. For the purposes of this example, let’s say $110,000 is wagered on each side for a total of $220,000 in wagers.

Remember, for a totals wager, including a half-point, there are only two possible outcomes — and only one side can win. For argument’s sake, let’s say the game ends 31-27 Chiefs, making for a total of 58 points. That means the over wins.

Since $110,000 was wagered on the over at -110 odds, bettors will be paid out $100,000 in winnings, plus the $110,000 originally bet, for a total of $210,000.

The books will take the $110,000 wagered on the over and return it to the winners. The other $100,000 will come from the $110,000 lost on under wagers.

That leaves the books with a $10,000 profit, meaning the vig earned on the $220,000 in totals wagers for this game was $10,000.

Of course, $10,000 is approximately 4.5% of $220,000, meaning the books earned a 4.5% vig on the bet.

What’s the difference between vig and overround?

There really is no difference between vig and overround in gambling. Although the number might be expressed differently, both the vig and overround are how sites make money.

Whether you call it an overround or a vig, it is still the profit margin that books factor into the price, or odds, of any wager.