“Vig” or vigorish, also known as “juice,” is the fee bookmakers or sportsbooks charge bettors for placing their wagers. This fee allows the bookmakers to profit on every betting line, regardless of the event’s actual outcome. It is usually added into the odds as overround, which means the total implied probability of all potential outcomes exceeds 100%.
How to Read and Calculate Sport Odds
To read sports odds effectively, it’s essential to understand the format in which they are presented. For example, a spread may look like this:
|L.A. Rams: -3.5 -110
|Seattle Seahawks: +3.5 -110
The “-110” indicates that a bettor must wager $110 to win $100. The $10 difference is the vig, which the sportsbook retains as profit.
Why You Should Remove the Vig
Removing the vig from the betting line allows you to understand the bookmakers’ expectations better. It helps you compare odds from different sportsbooks and assess the actual probabilities they assign to each potential outcome.
Here’s how to remove the vig and calculate actual probabilities:
- Calculate the implied probability (including the vig) for all outcomes. Implied probability = risk/return.
- Find the total implied probability by summing up the probabilities for all outcomes.
- Calculate the vig as a percentage using the formula: Vig = 1 – (1/Overround) x 100.
- Remove the overround (vig) to find the actual probability for each outcome: Actual probability = team implied probability/total implied probability.
Actual Probability Provides an Inside View
By removing the overround, you gain insight into the bookmakers’ predictions before they account for the vig.
Remember, when analyzing the potential value of a bet, compare your estimated probability with the implied probability suggested by the odds with the vig included.
Understanding how to remove the vig allows you to make more informed betting decisions and get a clearer picture of the bookmakers’ expectations. It provides a valuable behind-the-scenes viewpoint for sports bettors, helping them identify overpriced bets and potential value in the odds.