Sportsbooks are here to make money, right? But how so? Well, it’s not necessarily from just bettors losing more bets than winning. No, no, there’s also something called “juice” or “vig” that helps bookies profit and keep the lights on.
You see, they make their money by taking a cut of bets placed. If you bet a -110 betting line, the true odds of that should be +100. That extra -10 a bettor is paying is the “vig” we mentioned.
The vig gambling term is short for vigorish. Vig gambling allows bookmakers to make money on every betting line, regardless of the outcome — especially if they can draw close to equal money on the different betting sides. THat way, they’re guaranteed their 10 percent profit not matter what.
This is what the vig in betting is, a means to ensure that bookmakers aren’t simply relying on bettors to make unsuccessful bets on each wager. Otherwise, the business wouldn’t be sustainable, as profits and losses would fluctuate dramatically as each sports event ends.
But, “what is a vig in gambling?” Well, it’s calculated by adding the odds as overround, setting probabilities like the implied probability of all potential outcomes exceeding 100%. The vig is set into the odds as overround, as such, bettors must remove the vig from the bet in order to understand how the bookmakers actually value the probability of a certain outcome.
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Vig betting is essential for sportsbooks in order to ensure the money comes in on either side of any wager. This explains why the odds change as we approach an event. The aim is to attract more attention to the action on one side of the line, offering a higher vig percentage to guarantee profit for the provider.
While this is the case in every sport, it’s easily observed in combat sports such as boxing or the UFC, as the events approach the odds can change dramatically.
As a punter, it’s important to understand that first and foremost odds consider profitability rather than likely outcome. It’s understandable to not view it that way, but for experienced bettors, they’re quite aware of how bookies make their money. Removing the vig gives an accurate representation of the outcome, otherwise known as “actual probability”, different from canned vig odds providing an “implied probability”.
Calculating the actual probability not only gives you a clear picture of how much the sportsbook has inflated the price on a specific wager, but it also gives you an understanding of the handling fees each sportsbook has. This is a good gauge of how much vig is added to specific sports by each sportsbook provider.
While this is all well and good, ultimately the odds are what they are and by playing with online sportsbook providers, you’ll always be subjected to juiced odds.
As we mentioned before, removing the vig from sports betting odds is a good idea to calculate and understand the actual probability of certain wagers. There are a few calculations that need to be made in order to establish this. Follow the basic steps below to understand the actual probability of a bet:
Calculating actual probability isn’t a betting strategy as such, however, it does provide a different point of view, one that the bookmakers don’t necessarily want you to see. Without removing the vig, a bettor will never get the full picture and will be unaware of how the bettor actually sees the outcome of an event.
The ability to calculate the vig gives power to the bettor and helps to identify those bets that are simply overpriced or totally lopsided.
In order to calculate the actual probability (without the vig) bettors must remove the overround to find actual probability by dividing each team’s implied probability by the total implied probability (overround). This may sound confusing so we’ll explain this further.
So, the actual probability is equal to the team/total implied probability. To ensure you’ve got things right, add up both of your actual probabilities. The total should amount to 100 or 1, as a percentage or decimal.
The removal of the implied probability allows the bettor to see the actual probabilities of each outcome. This is the figure we’re after and the one which will give power to the bettor and allow them to understand the oddsmakers’ actual interpretation of the outcome of an event.
