What is vigorish?
Vigorish, from the Russian word for “winnings”, is the cut of a wager a sportsbook takes for holding a bet. However, there can be some confusion surrounding vigorish, or vig as it is commonly referred to, and some places may even offer incorrect information about the vig, so keep reading for a guide on how to calculate vigorish for yourself.
Why do the bookies take a cut?
When someone provides a service, they can expect to be paid for this service. This is how to look at what vig is. It is basically someone being paid for their service, or in essence a sporting casino or bookmaker being paid a commission for taking a bet. If you were to place a bet without using such services, such as against a friend at home, then of course there is no vig. So the vig is the cut the bookmakers or sports agencies take which means consequently they have an edge and in turn make a profit, which makes sense, since they are a business after all.
Another important thing to note when learning about the vig is that even when something is a 50-50 bet, sports agencies and bookies will still take their cut, so the odds will never be true odds of 1:1; with sports books an even-money event could have prices ranging anywhere from 1.85 to 1.99. Paying the vigorish isn’t something you want to do, but being able to place a wager is a service which needs to be paid for.
A standard example might involve a player betting on a team rated an even-money chance but the player having to place $110 bet to win $100. If the team loses the gambler will obviously lose the $110, but if it wins they will receive $210. The sports book’s rake here is $10. So the bookie or sports agency has taken a percentage of 4.55%. The odds can change and the vig percentage can, too, depending on where you are betting. It may not seem like much in this standard example, but the tiny percentages can be crucial when you are turning over thousands of dollars.
How to calculate the juice
The vig, which can also be known as the juice, isn’t always the same. If the odds change then so, too, does the vig percentage.
In order to calculate the vig, first up convert the odds to decimal. To do this divide one by the odds given, for example on a sports betting site. For this example we have used the odds in an international football match. Australia are 1.57 to win while China are paying 6.50 and the draw 3.60. So we divided one by 1.57 which equals 0.639 for Australia. For China we divided one by 6.50 which equals 0.154. And for the teams to draw we have one divided by 3.60, which is 0.277. We then add all of these together and we get 1.07 and times it by 100 to get the overround. This means we get an overround of 107%. Overround is slightly different to the vig but we can use it for the calculation.
Using Vig = 1 – (1/overround) x 100
Vig = 0.066 x 100
Vig = 6.6%
Therefore, the vigorish is 6.6%. Obviously you won’t do this calculation for every single bet you make but there are vig calculators online to make life a lot easier.
Why calculate the percentage?
There are some common misconceptions about bookies and sports betting which can be solved by simply calculating the vig. Many new gamblers and even some experienced and informed gamblers believe the odds are always against them, However, this isn’t exactly right. As long as the bookie, sports agency, online casino or other establishment is making a profit then they don’t concern themselves with whether you win or lose. So this is where calculating the vig comes in. Many bookies might say they offer low vig percentage, a real incentive for informed gamblers. However, they might also be banking on you not calculating the actual percentage. By calculating the vig you can ensure you are getting the lowest vig possible, which will ultimately add to a more enjoyable gambling experience.
Who pays the vig?
This is one of those chicken-or-the-egg scenarios. If you explore online forums of sports betting you will see the argument rages on about who pays the vig.
Obviously more than two players punt on any given contest, but to discuss who pays the vig we will look at two players – the winner and the loser. You would think that since the loser loses, they pay the vig, while the winner gets their money back as well as their winnings. However, it isn’t that simple and the debate has many answers. It can be said to be determined by certain external factors such as how much a player expects to win, how much they are willing to risk, as well as the changing odds.
Others argue that you pay the juice when you bet, before the outcome is determined. So for the $110 bet we have discussed above, if there are two players, one winner and one loser on opposites side of that bet, they would each pay $10 due to the fact both players have a 50% chance of winning and losing. With this perception comes the idea that even if the odds change, both have already paid even vig. At the end of the day it most likely has to be determined by looking at the individual’s bet and the odds when betting. Regardless, the best thing to do is shop around for the best odds from bookies and sports agencies, so you can get the most out of your gambling experience.
House edge in casino games
While vig or juice is generally referenced in sporting bets, it can also mean the house edge when playing casino games. The house edge is the advantage the casino has against a player so that they can make a profit. As a general rule of thumb, land-based casinos have a higher house edge due to high running costs in comparison with their online counterparts. Online blackjack has one of the lowest house advantages of any casino game, so be sure to check out this game at any of our recommended online casinos. The edge can depend on the number of decks used, whether or not the dealer hits or stands on 17, and other blackjack rules. You can even use a blackjack house-edge calculator to determine the exact house advantage. At our favourite online casino, Royal Vegas, we found online blackjack with a house edge as low as 0.25%.
Baccarat and craps also have low house edges on certain bets with the banker bet lowering the house edge in baccarat, and the ‘don’t pass’ bet lowering the house advantage in craps.
Always shop around for the best odds and use online calculators if need be as some gambling establishments may advertise a low vig, in the hopes you won’t really test it.