Welcome back to our educational series on profitable sports betting. Over the past four posts, we've built a solid foundation of understanding as we develop the skills to approach sports betting strategically.
Here’s a quick recap:
Now, let’s pivot our focus to a crucial aspect that affects every bet you place: the vigorish (vig), also known as juice. This component is essential to grasp for anyone serious about making money through sports betting.
The vigorish, or "the vig," refers to the fee or commission a bookmaker charges for taking a bet. This fee is integrated directly into the odds offered on a wager, subtly shifting the profitability landscape of any given bet.
Simply put, the vig is the price you pay the bookmaker to place your bet.
It’s not charged separately but is embedded in the odds, influencing both the potential payout and the odds themselves. This built-in cost affects everything from the odds to payout amounts, making it a dynamic component of sports betting.
The terms vig and overround are often used interchangeably but represent slightly different concepts:
For instance, if a sportsbook offers odds implying a 57% chance for Team A and a 45% chance for Team B, the total probability amounts to 102%. This overround ensures the bookmaker profits regardless of the outcome, in this case 2% of the total amount bet.
For main lines (point spreads and totals for major professional sports), the standard odds at retail sports books is typically -110 on each side of the bet.
A standard -110/-110 priced wager has a vigorish of 4.54%. This figure indicates how much of your stake the sportsbook expects to keep, on average, as profit.
Not all bet odds are identical on both sides; it’s very common to see books shade one side or the other; you’ll see odds like -105/-110 or -120/-105. This fact makes it hard to just “eyeball” a line and its odds and know what the actual probabilities are with the vigorish removed.
Lucky for you, Optimal automatically de-vigs betting lines for you, and gives you an implied probability that represents that book’s actual pricing. This is what enables you to compare prices between books that are apples-to-apples, and grab the best price.
As we learned previously, betting money flows in and odds adjust - and so does the vig. This dynamic ensures that the sportsbook minimizes risk by balancing potential payouts. Less popular games or events often carry a higher vig due to the increased risk to the bookmaker.
For example, player props, with their lower betting limits and less-liquid markets, can be priced at -115/-115 (a vig of 6.54%) or even as high as -125/-125 (a staggering 11.11% vig).
Conversely, high-profile events with significant betting volume can afford lower vigorish rates, thanks to the larger pool of bets that offset potential losses. Sharp books like Bookmaker offer standard pricing of -107/-107.
Let’s learn how to de-vig a line, shall we?
To remove the vig from a betting line and uncover the true, or "fair," probabilities of each outcome, you follow a simple but systematic approach. This method recalculates the implied probabilities so that their total equals 100%, eliminating the overround that creates the vig.
We’ll use the example of the Knicks-Pacers matchup we discussed in Part 3.
Here's the step-by-step process to remove the vig, along with the formulas:
First, convert all betting odds for the possible outcomes into implied probabilities. The formula to convert odds into implied probabilities differs based on whether the odds are positive or negative (a recap from Part 3):
The Knicks have a 64.91% implied probability to win, and the Pacers’ is 39.37%, inclusive of the vigorish. We don't yet have vig-free probabilities.
Sum the implied probabilities of the outcomes. This total will be greater than 100% due to the vig.
To find the true probability of each outcome (removing the vig), divide the implied probability of each outcome by the total implied probability, and then multiply by 100 to convert it back to a percentage. This normalizes the probabilities so that their total equals 100%.
The sum of the probabilities are now equal to 100%, which confirms that you’re looking at a vig-free set of probabilities. These adjusted probabilities give an accurate reflection of the expected outcomes, with the house edge removed, allowing for clearer and more strategic betting decisions.
Now that the vig has been removed from this line, we can look at the lines offered on this game across other retail sportsbooks and determine which one is offering the best prices for the outcome we wish to bet - the cornerstone of EV betting!
The ability to understand and account for the vig is a crucial skill for any sports bettor. By learning how to remove the vig and interpret the true odds, you can make more informed decisions, increasing your profitability over time. Optimal de-vigs lines for you, so you don’t need to mess with manual calculations.In Part 6 of this series, we bring together everything we’ve learned and learn how to find and analyze positive EV betting opportunities.
