What Is Vigorish And What Does It Mean In Sports Betting?
by Doc's Sports - 10/9/2014
"Vigorish", or "vig" for short, is a term used to describe an amount that a bookmaker or sportsbook takes as a commission on bets. Another term that can be used is juice. Basically, the vigorish is what allows the books to make a consistent profit, and to stay in business.
The easiest way to understand vigorish is with a simple example. The standard price for a pointspread bet is -110, which means that you have to bet $110 to make a profit of $100. Let’s say that $110 is bet on each team, and the favorite wins. The bet on the underdog is a loser. The bet on the favorite wins. The sportsbooks uses $100 from the losing underdog bet to pay the favorite bettor his profit. There is $10 left over. That profit for the sportsbook is called the vigorish.
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A lot of people are under the impression that sportsbooks are trying to be smarter than you and to pick games better than you. That isn’t the case. In reality, what they are trying to be is a market maker. If they have action balanced on both sides of a bet - or at least close to it - then thanks to the vigorish they can make a profit without any risk. In our example above the favorite won, but the result would be the same if the underdog won. So, linemakers don’t set lines based on how they think the game is going to turn out. They set their lines based on how they the betting public is going to view a game. They don’t adjust their lines in response to a change in the opinion of how the game will turn out. They change it in response to the betting patterns - in an attempt to better balance the action. The better you can understand the motivations of sportsbooks - to pocket as much of the vigorish as they can on each bet - the better you will become at interpreting how lines move, what they mean, and what that means in your search for value.
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