Sep 16, 20222 min read

Vig

Updated: Apr 24

Quick Read

Ever been dumbfounded by how exact a spread or total line was?

Sportsbooks use statistical models to convert massive amounts of data into understandable lines and odds

Ever wonder how sportsbooks make their money? Vig

While converting this data into odds, sportsbooks also include their own fee (juiced odds)

One of the most common examples of vig is with the spread being -110 / -110 on both sides

Originally the data had generated a spread line that was a “50/50” bet
What should’ve been +100 / +100 on both sides is then changed to -110 / -110
This fee (~5%) makes it very difficult to ever be a profitable bettor

Below I’ll show how sportsbooks use vig to guarantee profits as well as a method for removing this vig so we can see the fair odds

This a sportsbooks’ lines & odds for the Phillies vs. Braves game

To see vig in action let’s look at two scenarios...

In scenario 1 we can see that the Phillies (+1.5) covered the spread and Bettor A wins

In scenario 2 we can see that the Braves (-1.5) covered the spread and Bettor B wins

We can see that there’s a net loss of -$0.91 regardless of the outcome

While -$0.91 may seem insignificant on its own, this fee (~5%) on every bet means we as bettors need an ROI of 1.05 (105%) to break even

While research and experience is important when making our picks, it’s difficult for bettors to consistently find this 5% edge since sportsbooks already set their lines with extensive data analysis and modeling