Understanding Vigorish & How it Works
You may know the term vigorish by another name — juice, cut, commission or its abbreviated version, vig. Whatever you call it, vigorish is a concept that every sports bettor should understand because it impacts every wager placed with your online or in-person sportsbook.
To turn a profit, sports bettors must win 52.38% of all wagers (assuming all bets are identical amounts), not 50%. That extra 2.38%? That’s the vig.
What is the Vigorish?
The vigorish is the house advantage in betting odds a sportsbook creates to produce a profit. It’s built into the betting line in every game.
Here’s a typical example:
The NFL betting line for the New England Patriots-Seattle Seahawks game is pick’em, with each team listed as -110. Whichever side you take, you bet $110 to win $100. That extra $10 is the vigorish you pay. If you win, you receive $210 — $100 in winnings added to your $110 original stake. If you lose, it’s simply a loss of $110. So, if the bookmaker accepted a $110 bet on each team, it would have paid out $210 and collected $220. That’s a $10 gain from the vigorish.
Why do Bookies Take a Cut?
The sportsbooks are in business to make money. They are not set up to be non-profits. For bettors, the vigorish is the bookie’s fee for accepting your wager.
Ideally, the sportsbooks want to attract an equal amount of money on both sides of a game, so that no matter which team is the winning side, the books make a profit. It doesn’t always work out that way and the sportsbooks may experience wild swings on specific games. But at the end of the day, the vig is a powerful tool for sportsbooks, which bettors must factor into every wager.
If you’re determined to place a sports wager with no vig, find a friend or someone else to take the other side of your bet.
CHECK OUT:Our Odds Calculator Helps You Calculate Potential Payouts And Convert Odds
How Odds Changes Affect the Vig
Odds changes affect the vig, so it’s up to every sports bettor to shop around to find the best odds and pay the lowest vig possible.
In the above example, the Patriots and Seahawks were both listed as -110, which translates into a 4.5% vig. On bookies.com, you may find another legal book that offers both teams as -105, a lower 2.3% vig.
The disparity on vigs is often more significant when betting the moneyline, especially when one team is a heavy favorite over another. Bottom line: The more a bettor shops for the best line, the better their chance of lowering the vig, and the bigger advantage to maximize profits.
Are the Vigorish and Overround the Same Thing?
Vigorish and overround are similar, but not the same.
Vigorish is the fee charged by the sportsbook for accepting a wager on a specific game to produce a profit.
Overround is the cumulative total of all odds on the outcome of a particular event. When setting odds on a particular game, sportsbooks calculate the probabilities of each team winning. Instead of adding up to 100%, the books may set the probabilities (based on decimal odds) at 105% or more to create a profit margin. That 5% is considered the overround.
Calculating the Vig
There are many websites on the Internet that offer vig calculators. Simply enter the odds of both teams and the calculator will compute vig and overround percentages. The higher the percentage, the more the bookmaker is charging for your wager.
If you want to do the math yourself, you will need to perform a number of conversions and calculations and determine implied probability on the outcome of your game.
Here’s an example featuring NBA odds:
In the moneyline for an NBA game, the L.A. Lakers are -300 and the Dallas Mavericks +200.
The formula for Implied probability is risk/return, so a bet on the Lakers means 300 (wagered)/400 (return) = 0.75, or a win probability of 75%. A bet on the Mavericks means 100 (wagered)/300 (return) = 0.33, or a win probability of 33%.
Add the two implied probabilities (0.75) + (0.33) = 1.08 total implied probability. That means an overround of 8%. Theoretically, that bookie will pay out $100 for every $108 in wagers accepted.
The vig formula is 1-(1/overround) x 100. In this case, that’s 1- (1/108) x 100. That calculates to 0.740, or a vig of 7.40%.
The vig calculators save time and are a good way for a player to evaluate what each sportsbook charges on every wager.
Why Should I Even Calculate the Vig?
To a casual bettor, the vig percentages may not sound significant. But add them up over a large number of wagers and experienced bettors know the savings can be sizable, in the hundreds or thousands of dollars, depending on your wagering level.
It’s important to remember that sportsbooks make the bulk of their profits off their vigs, so they obviously matter. By minimizing the vigs you pay and maximizing potential returns, a player has a better chance to stay ahead of the game and achieve long-term profitability.
How the Vig Works for Each Bet Type
The vig that sports bettors pay varies not only by sportsbook, but the type of wager that is placed. For example, spread and over/under wagers almost always offer lower vigs than parlays, in which the house takes a larger edge.
A look at how the vig varies by type of wager:
Vig & the Moneyline
Betting the moneyline is a wager on a team to win the game straight-up, with no point spread.
When teams are evenly matched (say both teams are -110) the vig in moneyline wagers is straight forward.
But in games in which one team is a prohibitive favorite (say the favorite is -400 and the underdog is +325), the house edge is less obvious. These are also the games in which odds may vary significantly between sportsbooks, which puts a premium on line shopping at top sports betting sites. Why bet a team at -400 if it’s available at -370 somewhere else? This is especially true when betting on heavy favorites, where the profits margins on a winning wager are smaller.
Vig & Point Spreads
When point spreads are initially released, both the favorite and the underdog are usually listed in the -110 range, next to the point spread. Ideally for the books, the lines are accurate and draw an equal amount of money on both sides.
But it doesn’t always work out that way. To compensate for one-sided betting, books may initially adjust the vig before deciding to adjust the point spread. That means a team that was -110 with the point spread is moved to -115 or even -125.
That’s why it pays to frequently monitor betting lines. By noticing the change in vig in some games, bettors can not only maximize value on their wagers, they also can see how the betting is trending on specific games and where a point spread moves appear likely.
Vig & Totals
A totals bet is also known as an over/under wager. It’s a bet that the combined score of both teams will be over or under the number set by the sportsbook. It’s estimated that about 25% of all bets on NFL games are total wagers.
The vig on totals wagers is similar to spread betting and tends to be less volatile than on moneyline bets.
That said, the sportsbooks were forced to make significant vig and points adjustments to their initial totals during the early portion of the 2020 NFL season. Overs are traditionally the more popular bet and over-the-total wagers were a combined 29-19 during the first three weeks, forcing the books to subsequently set higher numbers.
Vig & Prop Bets
There are many different kinds of proposition bets, so the amount of vig varies with each. Generally, the vig is higher for prop bets than for spread or total wagers.
Examples of prop bets include how many touchdown passes Tom Brady will throw in a game; how many points and/or rebounds LeBron James will have; or how many home runs will be hit in a game.
Generally, these bets have low betting limits (which minimize the book’s exposure) and the vigs tend to be relatively stable.
Note that prop bets are not the same as futures wagers. A futures wagers is a bet on an event that will occur at a later point in time (such as who will win next year’s Masters or NBA Championship). Futures wagers almost always have higher vigs than prop bets.
Vig & Parlays
A parlay is a single bet linking two or more games, all of which must win for the parlay to cash. The more teams in the parlay, the higher the odds and payoff.
At standard -110 odds, a typical parlay payout is:
Parlays can include more than a dozen teams (+60000 or 600-1 on 12 teams) and are popular because they give the bettors the opportunity to cash big tickets for a relatively small stake. But be aware that vigs on parlays are higher than for straight wagers because true odds are not paid out. For example, a sportsbook pays off a three-team parlay at +600 (6-1) odds. The true odds are +700 (7-1). The more teams in your parlay, the higher the vig.
All sports bettors should have a basic understanding of vigorish, since it applies to every wager they make.
Causal bettors who wager infrequently and don’t risk large sums may typically shrug off the vig. They view the vig as a reasonable fee and are not inclined to invest additional time to potentially find a lower price somewhere else.
More seasoned bettors see the value of shopping around and paying less. There is a mental and financial reward to making the best wager possible on every game. Remember, it’s not just winning selections that allow for long-term sports betting success. Money management, vig awareness and successful wagering execution matter, too.