As the old saying goes, there’s no such thing as a free bet. Sportsbooks are for-profit entities that are in it for the long haul. Like any other company, the aim is to make money. In a perfect scenario from their point of view, they’ll pay out much less than they take in. They also have some insurance built in to make sure they come out ahead.
Vigorish, often referred to as the vig or juice, is built into the overall business model. In a nutshell, you can think of it as a fee for facilitating bets. Using a standard spread bet as an example, winners generally aren’t doubling their money. That’s because of the vig, which ensures the book will get a cut of the action.
The vig is readily apparent in spread and total bets, but it may not seem like it’s there in other wager types. It is.
In this detailed guide, we’re going to walk through this often misunderstood topic in full detail. By the time you’re through, you’ll understand how it works, ways to calculate it and what it means to your bottom line.
In the world of placing money at stake in hopes of earning more, it’s not uncommon for the house to keep a cut of the action. This applies in a number of different circles, such as casino gaming, financial trading and even your average pool or other contest of chance. It also happens in live and online sports betting.
The term vigorish is standard industry parlance and refers to the amount that the house takes. Once upon a time, the corner bookie would charge a fee for bets, AKA the vig. As sports betting moved into physical locations and into the worlds of online and mobile sports betting, the concept of vigorish went right along with it.
It can be helpful to think of the vig in sports betting as a fee or commission. When you lay out money on bet types such as the spread or total and win, you won’t be doubling your money. At standard odds of -110, you can expect a profit of about 90.91%, which means you’ll take home $90.91 on a $100 winner. The difference between that and pulling in the full $100 — $9.09 — is the vig.
On certain bet types, standard odds of -110 are used on both sides as a starting point. When the odds are at that level, then the vig will always be the same. However, market action will often influence those numbers. For example, heavy betting on one side of a total could lead to the odds being adjusted. Here’s an example:
To even out the action, sportsbooks may make the side that’s not seeing as many bets more appealing while lessening the attractiveness on the opposite side. When this happens, the amount of the vig in relation to the individual bets has been shifted. To ballpark the vig, you can use the -110 standard, but remember that these shifts will change the final amount you pay.
For other bet types in which the odds can be all over the map, such as moneylines, the amount of the vig will vary. When you’re betting on an underdog at positive odds, it may appear as if there’s no vig there. Since you’d double your money or more on a winning wager at positive odds, it’s technically not there, but it’s being made up for elsewhere.
To fully understand how the vig works, it’s important to understand its relation to the various bet types. The vig is going to impact the return you see and by extension your overall sports betting profit and loss. We’ve given you the gist for the top three bet types for team-based sports, but there’s a lot more to see here.
Let’s take a deeper dive on the vig in relation to them.
The point spread bet is most commonly associated with football and basketball betting. Oddsmakers set the spread, and bettors then pick the favorite minus the points or the underdog plus the number. When the bet is placed, the odds determine how much winning bettors will get back. At most sportsbooks, the default for spread bets is -110.
Occasionally, you’ll see operators who offer specials or reduced juice, such as -105, so keep your eyes out for that. At the initial release, the odds will be the same on both sides. Once bets start coming in, the books may tweak them to level out the action. When you plug in a bet amount at a sportsbook, you’ll see the potential return listed out based on those odds.
Using the standard of -110, users can expect back $90.91 on winners, or 90.91%. When the odds have been adjusted, you can ballpark the return by using the odds as the amount you have to lay out to get $100 back — i.e. $115 at odds of -115 or $105 at -105. We’ll walk through how to calculate the exact vig shortly.
Forms of a spread are also used for other team sports, but they go by different names. Variations of the spread include:
Some operators will also offer alternative spreads and lines, such as 2.5 for MLB or a different number on an NFL game. The odds for the bet type will be adjusted accordingly. Additionally, spread variations for the other sports can see more variation than what you would find in football and basketball betting, such as -135/+105 on two sides of a runline.
The vig for totals works very similar to the spread. For most books, the default for both the Over and Under is set at -110 and you’ll see that number listed upon the initial release. Special promotions may impact the number, and there will also be movement once bets begin to come in. It’s not uncommon to see a good amount of variance from the norm on heavily-bet contests.
For all bet types, shopping around and comparing the lines at multiple books is highly recommended. It can be particularly worthwhile to do so on totals. You may find ticks of difference on the actual total — such as 209.5 on an NBA game at one book and 209.0 at another — as well as on the odds.
When the odds change, so too does the vig and potential return. As an example, consider what you would get back on a winning $100 bet at the following price points.
While a small amount of additional profit may not seem like much when considering a single wager, think about the impact it can have over the course of a season or with a volume betting approach. These small amounts can absolutely add up to a lot while impacting your bottom line. As such, seeking out the best possible returns is the way to go.
On the standard moneyline bet, the favored side has negative odds while the number is positive for the dogs. When dealing with negative odds, it’s clear that vig is being applied. Winning bettors at positive odds will double their money or more, but the vig is being made up for elsewhere, not to mention that the books get to keep the losing wagers on the other side.
Let’s consider the return for winning bets on both sides for what looks to be a tight game in which the odds are split at -130 for the favorite and +110 for the underdog. A winning $100 wager on both sides returns:
If we drill down into the single bet, the sportsbook is taking in a total of $200 on this contest. When the underdog side wins, they’ll pay out $110 plus the stake on that end, while a win by the favorite means they’re paying out $76.90 and returning the initial $100 bet on that side.
Operators aren’t going to make a profit on every single wager, but they do over the long haul. The vig charged on moneyline bets and other wager types helps to make sure that’s the case. When betting on the moneyline, be sure to take the time to shop around to find the most appealing prices, which will help lead you to the best possible returns on winning bets.
The vig can also be found in other wager types, such as props, futures and live betting. In these cases, it’s similar to what we covered with the moneyline. There will be times when a premium is paid for winning bets on positive odds, but there will also be lots of losers on top of the winners for which no payouts have to be made.
The book may take a beating here and there, but coming out ahead over time is the business model. It can be helpful to think of it like this: the book will pay less for a likely outcome, and more for an unexpected outcome. On the less likely side, odds are negative with vig built in, and favorites have a good overall track record.
Surprises are going to happen with all bet types. Underdogs are going to win their fair share, and there’s just no way around that for operators or users. For both sides, the ultimate goal is to come out ahead over the long run. On the sportsbook end of the equation, they have the extra security of the vig built in to help them out.
There are plenty of handicapping calculators to be found online. These can be useful tool to keep in your back pocket as they can help you figure out the following with ease:
Let’s consider a standard point spread bet as an example. Odds on both sides are at -110, and equal wagers of $100 come in on each. The side that wins will get back $190.91 — the initial stake plus a profit of $90.91. The book took in a total of $200, so they’re keeping $9.09 here, which works out to 4.54%.
Things aren’t always so straightforward. Calculating the implied probability can help you figure out the vig in these situations. You can do so by using the following formulas.
Now let’s see it in action with a moneyline bet in which the favorite sits at -135 and the dog is listed at +105. Working through those two formulas, we come up with this:
If we add together the implied probabilities of 57.44 and 48.78, we get 106.22. The total range of outcomes should equal 100%, so what gives? An implied probability over that amount tells us that vig is being charged, which in this case is 6.22%. Outside of a handicapping calculator, figuring out the vig takes some effort, but it’s worth taking the time to do so.
Vig, which is short for vigorish, refers to the fee that’s being charged by a bookmaker for facilitating a bet. In a nutshell, it’s already factored into the odds that are displayed. You can figure out the amount you are being charged manually by working through some formulas, or lean on an online handicapping calculator to do so.
The odds on the bets you place, and by extension the vig, have a direct impact on your overall profit and loss. As such, it’s an important factor to consider for those who are looking at sports betting as more than just a hobby or entertainment. To help mitigate some of the impact, you can always take the time to shop around for the most appealing odds when you want to wager.