The vig is one of the most important elements of sports betting and understanding it, and knowing how to beat it, is one of the most important lessons you’ll ever learn in betting. But what is it, why is it so important, and how can you, as a punter, try to reduce its impact? Let’s find out.
What Is Vig?
So, what is vig in sports betting?
Vig, short for ‘vigorish’ is a form of commission that bookmakers take for offering their services as a provider of odds on betting markets.
It's essentially a ‘cut’ that is inserted into betting odds by the bookmaker that ensures that the odds offered to customers are always a bit shorter than they should be.
Bookmakers will keep all stakes from wagers that go on to lose but also need to protect themselves somewhat from the bets that go on to win, especially when dealing with savvy, value-seeking punters.
The easiest way of doing this is by making sure that they pay out a little less than they should on all customers’ winning bets, saving vast amounts of money this way over time.
Difference Between Vig and Juice
The question of what is the vig in sports betting is the same as what’s juice in sports betting because they’re exactly the same thing. It can also be known as the cut, the take, the house edge or the margin, but they all mean precisely the same.
The Reason Why Sportsbooks Have the Vig
Let’s go back for a minute. What is a bookie, and how do they make their money?
Bookies lay odds on sporting events by deciding what price each of the runners should be based on the mathematical chances of something happening, which is in turn dictated by such factors as recent form, team news and head-to-head records.
All bets that are losers for the customer are winners for the bookie but that doesn’t tell the full story regarding what happens with winning bets for customers and the odds that they’re paid out at.
A bookmaker has fixed costs that they need to cover just to be in business, plus additional ones such as advertising to get more customers to join, plus the costs of offering bonuses and running other promos to keep customers engaged, which we always discuss in our sportsbook reviews.
They also need to cover other costs aside from laying odds and running promos that are part of offering a bookmaking service like the cost of setting up a website or app, providing live streaming, the rent required to occupy an office and staff costs.
If bookmakers always offered mathematically correct odds, they’d struggle to stay in business. That’s because if they broke even in terms of the money coming in and out through bets they accepted, that wouldn’t allow them to cover all the costs mentioned, let alone make a profit.
So, in terms of what is the vig in betting, it’s the safety net that bookies have in their odds.
It ensures that if they ‘balance their books’ properly - take bets on multiple different selections without having too much of a liability on any one outcome - they should always make money in the long term across their betting markets.
How to Calculate the Vig
This isn’t so easy to do and there’s no reason why you should try to do it with pen and paper or using complicated spreadsheets when you have a much easier way of doing it.
But before we get to that, it’s worth pointing out that you can’t calculate the vig on a particular selection; you can only calculate it across the betting market as a whole.
The easiest way it to find an overround calculator to do the work for you.
Let’s say you’re betting on a tennis match between Carlos Alcaraz and Novak Djokovic. Enter Alcaraz’s odds (1.7) in the first box and Djokovic’s (2.1) in the second. Once you’ve done that, the calculator will tell you that the market overround is 6.44%.
That means the vig, or house edge, is 6.44%. Or, to look at it another way, the odds on the selections across the market are 6.44% shorter than they mathematically should be.
Now, let’s say it was a football match with a third, extra outcome: the draw.
The odds are as follows:
- Arsenal: 2.2
- Everton: 3.8
- The draw: 3.0
In this case, the Vig is 5.1% on the match-winner market.
How Much Vig Do Sportsbooks Charge?
For those who want to know how to bet on sports successfully, it’s worth knowing that probably the most important factor of all is the generosity of the odds on offer.
So, it follows that the lower the vig, the better that is for you, the player.
The sportsbooks that offer the best odds out there might have an average vig of around 4 to 5% on their markets, which is actually pretty good and gives you a fair chance.
Other bookies who aren’t prepared to be so generous may have an average vig of around 6 to 7%, which is already a significantly higher house edge but still somewhat acceptable.
If, when working out the vig at a particular bookie, you find that it’s closer to 8 or 10%, then it might be an idea to swerve those odds and that bookie entirely because the vig is simply too high.
How Vig Influences Profitability
If each time you win a bet, you’re getting paid out more than you would at another betting site, that’s going to add up over time and make a huge difference to your long-term balance.
Let’s say Pete and John are both looking to back the same two bets for the same amount of money: £10 each. Pete always does so at Bookie A, and John always at Bookie B.
Here are the bets they’re going to place and the respective odds:
John at Bookie A:
- Real Madrid to beat Barcelona @ 2.8
- England to beat India in an ODI cricket match @ 2.3
Pete at Bookie B:
- Real Madrid to beat Barcelona @ 2.5
- England to beat India in an ODI cricket match @ 2.1
Let’s say both bets go on to win. John will have been paid out a total of £31 profit, while in Pete’s case, the higher vig that Bookie B inserts into their odds means that he’s only paid out £26 in profit.
This may not seem like much, but John got a payout of 19% more than Pete did, just by betting at a bookie with a lower vig.
If they were both perennial winners, John’s profit would be far greater in the long term than Pete’s. But if they were your average punter, that extra 19% could be the difference between being in profit or being in the red.
Other Types of Vig
As we started by saying, the vigorish definition can include other terms for it, some of which mean exactly the same thing, while in other cases, it can mean something slightly different.
House Edge
The house edge means the same thing as vigorish; it’s the cut the house takes for offering a betting product, whether that’s sports betting odds or, say, a casino game. So, you may hear someone say ‘single-deck Black Jack has a house edge of just 0.5%.’
The Rake
The rake is a term normally used in online poker, where the betting site charges a commission for running the poker game that customers can play in. The rake can be anything between 2% and 10% on each hand that is played, and it’s taken automatically from the overall pot for each hand.
The big difference between vig in sports betting and rake in poker is that the betting site has no real interest in the outcome of each hand in poker as they always make money from it, whatever happens. In sports betting, the vig is inserted into their odds, and the bookie will generally have some more profitable outcomes than others.
Overround
We’ve discussed the overround already. It’s expressed as a percentage and is a mathematical way of explaining the exact cut a bookie is taking across a particular betting market.
Tricks to Reduce the Impact of the Vig
The higher the vig, the worse for you, the player, has been the overall conclusion we've reached so far in this article on what is vig in sports betting. Thankfully, there are a few ways to reduce it, which can only be in your best interests.
Check Other Sportsbooks for a Better Vig
The example involving John and Peter is a perfect illustration of this: playing at a bookie with a much lower vig is going to make a huge difference over a long period of betting.
The solution when you’ve decided on a particular bet is to always place it at the betting site offering the highest odds. The best way of doing this is to check an odds comparison site and see who’s offering the best price on that particular outcome and place it with that bookie.
Of course, it’s not practical to hold accounts at 30 or so bookies, with a more realistic number being three or four. So, if that’s the case, bet with the sportsbook of those three or four that is offering the lowest vig/highest odds on that particular selection each time.
Look Out for Promos That Lower the Vig
One of the biggest developments in recent times that has aided customers in their quest for profits has been the Odds Boost, an ongoing promo that just about every bookie has run at one stage or another.
With Odds Boosts, the bookie will choose a certain number of selections a day across different sports, where the normal odds have been boosted to attract more business, normally for the biggest events in the likes of football or horse racing.
So, Mo Salah may have his odds to score a goal anytime boosted from 1.8 to 2.0, or a horse may be offered at 3.5 rather than 3.0 to win a race.
There’s no real downside here because you’re just being offered bigger odds than normal, and extra winnings are free of wagering requirements. That said, only certain selections that the bookie has chosen to boost are on offer at bigger odds each day. Not all of them, of course.
Look Out for Other Promos
Some bookies prefer to add an extra layer to boosting odds. Rather than the customer only being able to get them on a couple of selections a day, and on selections they don’t necessarily want to back, they’ll allow customers to boost any selection of their choice by 20 or 25%, once or twice a day.
So, in this case, a customer can seriously reduce the vig on bets that they want to back, rather than the ones the bookie has deliberately chosen.
Increase Your Win Rate
This sounds sensible and logical, but it’s not quite so straightforward.
For starters, there’s no surefire approach to having a better win rate than just betting at shorter odds, which isn’t necessarily a good strategy.
There’s another problem with this approach. Winning more often doesn't mean decreasing the impact on vig as such, it just means more frequent payouts. But as we said, you’ll probably need to bet at shorter odds to achieve that result.
