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Sportsbetting 101
09. What is "vig"?
Vig, which is short for vigorish, is a term used to describe the book's
theoretical edge, or commission, on each betting online wager. It is
also sometimes referred to as the book's hold, particularly when looking
at futures markets. For spread betting, balanced action would result
in 11 dollars bet on each side (as an example) for a total of 22. As
long as there isn't a push, the winner would be paid 21 and the book
would keep 1. This 1/22 that is the book's commission is called the
vig.
Most express it as a percentage. In this case, for spread betting, it is 4.545%. To compare to some popular casino gambling games, the vig in craps is approx. 1/72 (1.389%) and in roulette gambling it is 2/38 (5.26%) on a double zero wheel. It is a representation of the house's long term betting edge over time based on the mathematics of the game. Each and every gambling strategy has this "vig" inherent in it, barring a push.
In order for a bettor to win, he must win an adjusted percentage high enough to overcome or counteract this vig. For spread betting, at typical "lay prices" of -110 each way, that magic number is 52.38%. This break even percentage is what you need to surpass long term to win.
One interesting side note is that the farther away from even a money sports betting line goes, if the differential is held constant, the less vig is inherent. That is, the sports book is skimming a higher percentage of the players' money (assuming balanced action) on sports betting lines of -110/-110 than -130/+110, -160/+140, etc. This is why books have "break points" along the way where the differential is increased. So it might be a 20 cent differential up to -149/+129, then a 30 cent differential up to -199/+169, then 40 cents, etc.
A place like Canbet is a little unusual in that it keeps the vig percentage constant, so the differential expands gradually, making all the sport bedding odds along the way identically favorable (except for slight rounding) to the -110/-110 starting point (-107/-107 for some sports). I can see the fairness in this, but obviously a bettor would prefer keeping the differential constant, as something like -200/+180 odds carries with it very little vig.
Patton:
This is a great description of vigorish. I like to think of the book
as a middleman like a stockbroker, putting together people who want
to be on opposite sides of a transaction. Instead of buying and selling
shares of stock, the players are buying and selling sports teams. The
vig is the commission the book earns for bringing the two parties together,
just as a stockbroker earns a commission for bringing the buyer and
seller of a stock together.
Buckeye:
Some may well disagree with my ideas about this subject, but I always
think of vig like it is used in casino betting contexts. I have heard
some say that the vig is dependent on your actual winning percentage,
and is only paid by the winner. I disagree with this interpretation.
In roulette gambling, for example, the vig can be seen in payoff gambling
odds that are based on 36 numbers when there are actually 38 numbers
on the wheel. Sports betting has this 5.26% vig inherent in it. It matters
not whether you win or lose; the vig is constant and a reflection of
the theoretical edge.
If everyone at the table bets "10" and "10" hits and everyone leaves, the house's profit on that spin isn't 5.26%, obviously. Nor if the same situation happens and the spin is instead "0" and everyone loses is the house's profit 5.26%. But the vig is the expected long term mathematical betting edge, assuming balanced action, not the actual profit of one particular spin. It is based on the fact that if you played all 38 numbers every spin, you would lose 2/38 of everything bet.
Think about it as if you were sport betting on both sides of the same game, at the same spread betting line. You'd be sacrificing 1/22 and giving the book the vig. Some do this when they make a mistake and accidentally bet the wrong side, or if they change their mind before kickoff and want to get out of the bet. This is called "juicing out" of the bet. You sacrifice the juice, that is, pay the vig.
Vig determines the book's theoretical edge, rather than actual one, because a book's actual profits are affected by unbalanced action, money bet on both sides of line moves (by scalpers or middlers possibly), etc. It depends on the actual skill and policies of the book's linesmakers and managers.
I did read in one Vegas report that Vegas's take on football betting is closer to 5%, partly based on teasers and parlays and possibly the many square tourists that bet there, while their take on basketball betting is closer to 2.5%, and on baseball betting their take is smaller still.
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