What is Vigorish?
Vigorish, often referred to as juice, cut, commission, or simply vig, is an essential concept for sports bettors. It represents the sportsbook’s built-in profit margin included in every bet, directly affecting the outcome of wagers placed either online or in physical sportsbooks.
To achieve profitability, sports bettors need to overcome the vigorish by winning more than half of their bets; specifically, they must win 52.38% of the time, as opposed to the breakeven point of 50%. This additional 2.38% above the breakeven point accounts for the vig.
Example of Vigorish in Action
Consider a typical NFL game betting line, such as one for a matchup between the New England Patriots and the Seattle Seahawks, which might be set at pick’em with odds of -110 for each team. In this scenario, a bet of $110 could win $100. Thus, the extra $10 paid over a $100 win is the vigorish. If the sportsbook receives $110 bets on both teams, it pays out $210 to the winner while collecting $220, securing a $10 profit from the vigorish alone.
Why Sportsbooks Charge Vigorish
The primary reason sportsbooks implement vigorish is to ensure profitability. As businesses, they are not charitable organizations; instead, they aim to make money. The vig acts as a fee for the service of accepting bets.
Sportsbooks ideally want to attract equal betting on both sides of a game. This balance allows them to earn profit through the vigorish without significant risk, regardless of the game’s outcome. However, achieving this balance isn’t always possible, leading to potential profit or loss swings based on game results.
How Odds Changes Impact Vigorish
Changes in betting odds directly affect the amount of vigorish. Bettors should always seek out the best odds available to minimize the vig. For example, while one book may offer -110 odds (implying a 4.5% vig), another might offer -105, reducing the vig to 2.3%. This comparison highlights the importance of shopping around for the most favorable betting conditions to enhance profitability.
Vigorish vs. Overround: Are They the Same?
Although they are related, vigorish and overround are not identical. Vigorish refers specifically to the fee charged by a sportsbook for taking a bet on a game. In contrast, overround pertains to the total of the probabilities for all possible outcomes of an event as set by the bookmaker, which typically exceeds 100% to ensure a profit margin. For instance, a book might set total probabilities at 105%, meaning the overround is 5%.
Calculating the Vig
While numerous online tools exist to calculate vigorish, understanding the mathematics behind it can be insightful. For example, consider NBA moneyline odds where the L.A. Lakers are -300 (indicating a 75% implied probability of winning) and the Dallas Mavericks are +200 (indicating a 33% implied probability). The total implied probability of 108% suggests an overround of 8%, leading to a theoretical payout of $100 for every $108 wagered. The calculation of the vig from this overround would be approximately 7.40%, illustrating how sportsbooks charge for each bet placed.
Understanding and calculating vigorish is crucial for any sports bettor aiming to make informed and potentially profitable betting decisions. By learning how to find the best odds and calculate the associated costs, bettors can enhance their chances of success.
Why Calculating the Vig is Crucial
The Importance of Vigorish for Bettors
Although the percentages of vigorish (vig) might seem minor to a casual bettor, they accumulate significantly over time. Experienced bettors are acutely aware that even slight adjustments in the vig can translate into substantial savings—potentially running into hundreds or thousands of dollars depending on the volume and size of their bets.
It’s crucial to recognize that sportsbooks primarily derive their profits from the vig. Thus, by minimizing the vig you pay and seeking the best possible returns, you can enhance your odds of staying profitable in the long run.
How Vig Influences Different Bet Types
The vigorish varies not only from one sportsbook to another but also among different types of bets. Generally, straight bets like spreads and totals (over/under) come with lower vigs compared to parlays, which typically involve a higher house edge.
Vig and Moneyline Betting
Moneyline bets, which involve picking a team to win outright without a point spread, display straightforward vigs when teams are evenly matched (e.g., both teams at -110). However, when one team is a clear favorite (e.g., -400 vs. +325), the vig might not be as apparent, and the odds can differ significantly between sportsbooks. This variance underscores the importance of shopping around for the best lines, especially when betting on favorites where the profit margins are slimmer.
Vig and Point Spreads
When bookmakers release point spreads, they typically set both the favorite and the underdog at odds like -110. The goal for the sportsbooks is to balance the betting on both sides to mitigate risk and profit from the vig. However, uneven betting on one side might prompt the sportsbooks to adjust the vig (e.g., from -110 to -115) before altering the spread itself. Vigilant bettors can maximize their value by monitoring these shifts in vig, which can also indicate potential movements in the point spread.
Vig and Totals Betting
Totals betting, also known as over/under, involves wagering on whether the combined score of both teams will be over or under the sportsbook’s set number. Like point spread betting, the vig on totals is generally stable but can fluctuate more than moneyline betting. Significant adjustments to vigs and set points were notably evident during high-scoring periods, such as the early 2020 NFL season.
Vig and Proposition Bets
Proposition bets, or prop bets, cover specific game outcomes such as individual player performances. These bets often carry higher vigs than spreads or totals due to their speculative nature and typically have lower betting limits to limit the sportsbook’s risk. It’s important to note that prop bets differ from futures wagers, which predict outcomes of events far in the future and generally carry even higher vigs.
Vig and Parlays
Parlays combine multiple bets, requiring all selected bets to win for a payout. The vig on parlays is higher because the sportsbook does not pay true odds. For example, the actual payout for a three-team parlay might be +700, but the sportsbook offers +600, reflecting the higher vig.
The Bottom Line on Vigorish
Understanding vigorish is essential for all sports bettors, as it affects every bet they place. Casual bettors might overlook the vig, considering it a minor cost of the betting process. In contrast, more experienced bettors recognize the benefits of finding lower vigs and optimizing each wager for the best possible return. Effective money management and awareness of vigorish are pivotal to achieving long-term success in sports betting.
