Online Sportsbooks receive a cut from every wager placed by customers, called the “vig” or the “juice.” The vig influences odds, so removing it will give a clearer picture of your possible outcomes.
The Juice or Vigorish refers to the percentage fee the sportsbooks or bookmakers charge a gambler placing wagers on their platform. This fee enables the institution to make money on every bet placed on its platform, regardless of the end outcome. The vig is baked into all kinds of odds, whether on soccer odds, NFL Odds or NBA betting lines. Of course, the bettors can end up losing or winning, but the vig ensures that the bookies always end up making money on every wager.
The vigs are added into the odds by the sportsbooks and bookmakers, or the probabilities are set as such that the significant implied probability of all the possible outcomes exceeds 100%. As the juice is integrated as overround (the book percentage) into the odds, it shifts the numbers, so you can gain a transparent picture of what the bookies think about the outcome of the game by removing the vigorish.
Reading and Calculating Sports Odds
To get rid of the vigorish from the betting lines, you must be an expert who is confident in reading sports odds effectively.
For example, a spread may read like this:
- Pittsburgh Steelers: -3.5 (-110)
- Minnesota Vikings: +3.5 (-110)
The -110 states that the player must put $110 on the line for every $100 he or she wants to win.
The vig here is the $10 that the sportsbook is withholding, which is its profit.
The Process to Getting Rid of the Vigorish
- Calculate the probability (implied) that includes the vigorish of all possible outcomes.
- This probability includes the overround value, which can be utilized to calculate the vigorish as the percentage of the wager value.
- Remove the overround from the value, which will also eliminate the vig. This will calculate the total probability (implied) to 100%.
- Use your handicapping skills to compare with the actual probability and decide if a betting line is worth investing in.
Calculating the Implied Probability
The mathematical formula for finding the implied probability is risk return=implied probability
For example, if you are wagering $300 to win $100 on the Steelers game, your total return is $400. Therefore, the implied probability will be 300/400 = 0.75.
If the implied probability for the Vikings, the opponent, is 0.30, you add both probabilities to get the total implied probability: 0.75 + 0.30 = 1.05 or 105%.
Now that the implied probability is more than 100%, the overround is 105%-100% = 5%. So in this particular wager, the bookmaker will be dishing out $100 for every $105 in bets it receives.
Calculating the Vigorish as a Percentage
The Vigorish is the associated % value that a sportsbook receives as the profit from the betting line. The calculation is as follows:
Vig = 1- (1/Overround) x100
Vig = 1- (1/105) x100
Vig = 0.476
Vig = 4.76%
Calculating the Actual Probability (Vig taken out of the Odds)
To get rid of the overround to calculate the actual probability, you have to divide every teams’ implied probability by the total probability (implied) or overround.
For the Steelers: 75/105 = 0.71 or 71%
For the Vikings: 30/105 = 0.29 or 29%
The probability of the Steelers winning = 71%
The probability of the Vikings winning = 29%
The vig can be removed to provide a view of the inside workings of sports betting. You won’t be able to see what the sportsbook thinks will happen in the game if you don’t remove the juice or vig. You can also calculate the vig for a betting line to identify bets that are just too expensive.
