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What Is The Definition Of Vigorish In Sports Betting?
1. The vigorish, or vig, is the extra charge included on top of the odds in order for the sportsbook to earn a profit. In slang, this difference is referred to as the juice.
How Do You Calculate Vigorish?
Sportsbooks normally don’t publish the vig, so the best way to learn how to calculate it is through an example.
For instance, in the 2021 Cotton Bowl, a semifinal matchup between the Cincinnati Bearcats and the Alabama Crimson Tide, the moneyline looks like this:
- Bearcats +425
- Tide -600
Alabama holds the favorite selection, while Cincinnati is the underdog. In order to win $100 on the Tide, wagers need to be $600. Wagering $100 on the Bearcats would net $425 if they win.
To figure the vig, you need to find the implied probability of risk/return based on the odds, and then find the surplus. That surplus is the vig. You can use the following formula to calculate the probability and then the vig:
- Favorite probability = Favorite Odds/(Favorite Odds + 100) * 100
- Underdog probability = 100/(Underdog Odds +100) * 100
- Vig = (Favorite Probability + Underdog Probability) – 100
Using this formula, the probabilities and vig calculations look something like this:
- Alabama probability = 600/(600 + 100) * 100 = 85.71%
- Cincinnati probability = 100/(425 + 100) * 100 = 19.05%
- Vig = 85.71% + 19.05% = 104.76 – 100 = 4.76%
How Does A Vig Work?
In theory, sportsbooks would set the line to draw even bets on the two outcomes. The odds set in this line, however, do not often add up to 100%. This difference would be the unbiased profit for the sportsbook.
For this reason, a lot of bets hold the -110 line. In order to profit $100, $110 must be wagered. This $10 difference is the vig or juice.
What Is A Normal Vig?
A normal vigorish is somewhere under 5% of the total projected profit, usually 4.76%.
In the standard -110 odds, betting $110 would net $100 in addition to the wagered amount, resulting in a profit of $210 if the bet hits.
The $10 wagered on top of the $100 earned and wagered is the juice. Accordingly, $10/$210 = 4.76%.
How Do You Remove Vig Odds?
Removing vig odds is simple if the calculations above are already complete.
Otherwise, you can do this by making the implied probabilities a fraction of the total probability (including the vig). Thus, the probability without the vig for each team would look like this:
- Alabama = 85.71/104.76 = 81.82%
- Cincinnati = 19.05/104.76 = 18.18%
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