What is a Vig? A Must Know Concept to Beat the Books!

Today, we’re diving deep into the concept of the vig, also known as the juice, the fee, the hold, the rake, the house edge, or the tax. Understanding the vig is essential for anyone looking to place bets successfully and profitably. You should also watch this video below that explains what the vig is!

Understanding the Vig

The vig is essentially a fee that sportsbooks include in their lines. This fee guarantees that they profit long-term, regardless of the outcomes of individual bets. A common example of this is when you log onto a sportsbook and see odds of -110 on both sides of a line. This means each bettor must place a $110 wager to win $100. So, the sportsbook collects $220 in wagers and pays out $210 to the winner, keeping the $10 as their edge, or vig.

This equates to about a 4.76% vig when it comes to a spread set at -110 on each side. The vig is what complicates becoming a profitable sports bettor. You might think that winning more than 50% of your bets would make you profitable, but that’s not the case. For a -110 line, you actually need to win 52.38% of your bets just to break even.

The Challenge of Beating the Sportsbooks

Beating the sportsbooks is no small feat. These billion-dollar companies have extensive data and resources at their disposal, making it extremely challenging for individual bettors to compete. They aim to set their -110 lines as accurately as possible to ensure that the vig becomes their profit. If bettors are losing an average of 4.76% on their wagers, the sportsbooks are collecting that amount consistently.

To put it simply, you need to win a significant percentage of your bets to offset the vig. Winning 51% of the time is impressive, but without the proper tools and research, you’ll still lose money in the long run. It’s important to remember that sportsbooks are professionals at setting lines, and they do so with precision.

Using Vig Percentages to Your Advantage

Now that we understand the vig, how can we use vig percentages to our advantage? Understanding how to calculate these percentages provides valuable insights into specific sportsbooks and their markets. Sportsbooks tend to have lower vig percentages on markets where they are confident in their lines, while they increase the vig on markets they are uncertain about.

For instance, sportsbooks are usually confident in full game spreads, so you might see a 4.76% vig there. However, if you look at NBA player props for a bench player, you might see a 7% vig. This indicates that the sportsbooks are less certain about these lines, and they are padding the vig to protect themselves.

Identifying Sharp Sportsbooks

You can also use vig percentages to identify sharp sportsbooks. Retail books like FanDuel or DraftKings typically offer spreads at -110. However, sharp books like Pinnacle or Bookmaker might offer odds of -108 or even -105. This indicates that they are more confident in their prices, resulting in lower vigs.

Understanding how sportsbooks set odds is crucial for any bettor aiming for long-term profitability. In this comprehensive guide to sharp vs soft books, we’ll explore the intricate process of odds-setting, highlight the differences between market-making and retail sportsbooks, and provide actionable insights to help you exploit these odds for consistent profits.

The Outlier Pro plan allows you to search for plays using these sharp books, providing you with the ability to find great bets. This is how I make most of my money in sports betting.

Understanding the Super Bowl Coin Flip Example

Another great example of how sportsbooks manage vig is the Super Bowl coin flip. The true probability of a coin landing heads or tails is 50%. Sportsbooks, confident in this outcome, might offer odds of -105 on both sides. They can afford to provide better prices for such a predictable event because they know they will profit regardless of the outcome.

The Impact of Parlays on Vig

When discussing vig, we also have to consider parlays. As mentioned, sportsbooks typically make a little over 4% ROI on standard bets. However, they actually make over 9% profits on every bet placed due to the growing popularity of parlays. For example, if you create a three-leg parlay with a 5% vig for each leg, the total vig adds up to 15%.

This means that if you bet $100 on a three-leg parlay, you’re expected to lose $15. That’s why I generally advise against betting parlays unless you have a distinct edge. Many bettors love the allure of big payouts, but it’s much wiser to focus on straight bets.

Best Practices for Betting

When placing bets, it’s best to stick to mainline bets where the vig percentages are lower. If you’re betting for fun, you want to minimize your losses in the long term. Even if sports betting is often viewed as entertainment, it can also be a way to earn money on the side.

Finding Positive Expected Value Bets

Using tools like Outlier Pro, you can discover thousands of positive expected value (EV) bets each year. For example, if you come across a player prop with a high vig percentage, it indicates that you might be losing value. Conversely, if you find a bet with lower vig, you can be more confident in its potential profitability.

For instance, if you see a player prop with a 7.58% vig, it’s likely that the sportsbook isn’t very confident in that line. This means you could be giving up a lot of value if you’re just placing bets blindly.

Conclusion

Understanding the vig is crucial for anyone serious about sports betting. While it may seem like a daunting concept, recognizing how it impacts your bets can significantly enhance your profitability. By leveraging the right tools and strategies, you can minimize the vig’s effect and make smarter betting decisions. For more insights, check out Outlier, the best sports betting tool to do player prop research and trends.