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The Power of the Vig by Jeremy Martin
In a perfect world, sportsbooks in Nevada and worldwide could take in a proportionate amount of money on each side of a football game without ever moving their line. This would guarantee bookmakers a 4.4 percent profit and it would eliminate the risk that is inherent with taking sports wagers. The profit on balanced action comes from the vig, or juice, that is charged on sports bets. The vig - short for vigorish -- gives the books a built-in edge against the betting public.
It's not a perfect world, however, for bookies in the new Millennium. Every sportsbook must sweat out a multitude of games each week of the football season where they have big decisions riding on each outcome. While some shops prefer to have a decision on a larger ratio of games - often setting their lines in a fashion where they are betting against the recreational bettors, or 'squares' as they are often called in the industry -- many prefer to balance as many games as possible - relying on the vig for assured profits -- and hope for some favorable results in the rest of the contests.
Because the books often have decisions riding on a number of games on any given football Sunday, there is a real chance that they can lose money during any NFL weekend. The bookies tend to do well on college football Saturdays - as they tend to book more balanced action than they do in the pros -- but there is always the threat that things can go wrong on Sundays, even with the protection provided by the vig.
Books must be extremely careful when setting and moving their numbers. If they move the line around key numbers like three and seven at certain times during the week, they can run the risk of getting 'sided' if the game falls on the key number (say the line on a game opens at 2 ½ with heavy action on the favorite. If the line moves to three and the game falls on that number, the book pushes on all bets at three and pays the bets at minus 2 1/2). If the bookie moves his number around too much, there is a chance the game can fall somewhere in the middle, therefore causing the bookie to pay out on both sides. Bookmakers refer to this as getting 'middled.'
Even pushes can be bad for the books because they lose out on all operating costs incurred for that particular game. Sportsbooks in this day and age are bringing in hundreds of thousands of dollars in handle each weekend of the football season and there are many operational costs associated with booking those games. A push, however, is a much-preferred option to getting sided or middled.
In order to reduce some of this exposure, bookies now use an off-standard line more than ever before. Instead of offering a player the standard minus 10 cents vig (bet $110 on a side, win $100), bookies are now moving their juice around according to their action instead of moving the actual number for the game. For example, if the line on a Monday night game opens at minus three and then a player puts a limit bet on the underdog, the bookie may move the number to minus-three (minus 35 cents) for that team in order to offer more attractive juice on the favorite. This promotes balanced action and allows the bookie to stay on three instead of moving to 3 ½, which could put him in a vulnerable position.
"If you didn't have to move lines to get balanced action there would be no better setup," said Rob Gillespie, president of BoDog.com Sportsbook and Casino. "It's like running a poker room. You just go in there and you know you are going to have your rake (the vig) on every single game.
"What you don't want to have is the situations where you balance action all day and then you get completely lopsided on one game. You have no chance to win that money back if you lose. You can completely wipe out your players with a big win. When you get a group of five or six games that are lopsided you hope you go down the middle and split. It keeps the money in circulation."
Gillespie makes no excuses for BoDog's style of bookmaking. The book releases its lines after most other books have already posted theirs. Gillespie turns away most of the professional action as well. Plus, they use the off-standard line more than most others in the industry. They rely heavily on the vig to keep their business profitable.
Still, balancing all action is nearly impossible even when a book like BoDog installs measures intended to do just that. For the NFL, BoDog has roughly 35 percent of their weekly action balanced to where they have no 'root' on the games. For another 40 percent of the games they have what Gillespie describes as a small decision where they stand to lose $15,000-$20,000 if the bettors hit their side. In the other 25 percent of the games they just have to sweat them out and hope they booked the right number.
With a large decision riding on approximately a quarter of the NFL games on any given weekend, Gillespie would rather take his chance against the squares.
"Typically, Sunday and Monday night games are hard to balance (because of a run of public money)," added Gillespie. "Obviously there are games where you look and say, 'I don't see what the public sees here. This doesn't seem right.' We don't want to put too many opinions out there. But there are certain times obviously where we feel we have a big advantage with our line. If we think a fair line is five and (the public) is wanting to lay six, getting that extra point is real powerful for us."
Now that most books offer first-and-second-half betting and a plethora of teaser options, balancing the books can become even more difficult. Doc at Rio, the head oddsmaker for Skybook, often uses his second-half numbers to help balance his books - even if it means giving the professionals some lines that they can win with. As long as they can help balance out some of the public action he knows he will always be ensured a profit with the vig.
"Depending on how much action I have written, I let people bet a lot in the second halves," he said. "I am not really worried about the second half number falling unless it is a key number. I will let them bounce around. I really don't care. But I want to write action that suits me. If I have no decision on a game, I will just try and balance out my second half like the game and go for the juice."
Skybook is one of the books that chooses to abandon the conservative approach and go heavily against the public bettors. Doc from Rio said that he only has one NFL game per weekend that he is balanced on.
"You get a lot of public action and you want to root against them," he said. "You don't want to try and write back all their money."
"I am one of the guys that tends to hold larger decisions probably than a lot of sportsbooks," added Leo Shafto, head oddsmaker for Royal Sports. "It depends on who's playing. If I have real sharp guys that I know are sharp customers; those guys are a lot more influential to me if they play $500 on a game than what I perceive to be a complete square who has more money than he knows what to do with and he comes in to bet $10,000 on a game. I would move (the number) off of the $500 before I would move off the other guy's $10,000."
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