Okay, so today I wanted to mess around with something called “vig betting.” I’d heard the term tossed around and was curious, so I dove in to figure it out.
First off, I needed to understand what this “vig” thing even was. Turns out, it’s short for “vigorish,” which is basically the cut or fee that bookmakers take on bets. It’s how they make their money. Like, if you’re betting on a coin flip, the odds should be even, right? 50/50. But with the vig, the bookie might offer odds that are a bit worse for you, so they’re guaranteed to make a profit over time, no matter who wins.
Next, I wanted to see how this worked in practice. I grabbed a few examples of betting lines from some sports games. Let’s say there’s a game between the Lakers and the Celtics. The bookie might offer odds like this:
- Lakers -110
- Celtics -110
What this means is, for both teams, you’d have to bet $110 to win $100. That extra $10 is the vig. The bookie is taking that as their fee. So, if you bet $110 on the Lakers and they win, you get $210 back ($110 bet + $100 winnings). If they lose, you’re out $110.
Now, I wanted to figure out how to calculate the implied probability from these odds. There’s some math involved here, but it’s not too crazy. For negative odds like -110, you use this formula:
Implied Probability = (Odds / (Odds + 100)) 100
So, for our -110 odds:
Implied Probability = (110 / (110 + 100)) 100 = 52.38%
This means the bookie thinks each team has a 52.38% chance of winning. But wait, if you add those probabilities together, it’s over 100%! That’s the vig at work again. The bookie is essentially saying the combined probability of either team winning is more than 100%, which is impossible, but it’s how they ensure they make money.
To find the actual vig percentage, you add up those implied probabilities and subtract 100. In this case, 52.38% + 52.38% = 104.76%. Then, 104.76% – 100% = 4.76%. That’s the vig percentage.
So, yeah, that’s my little exploration of vig betting. I kind of see how this could be useful to know if I’m placing bets. I can determine what kind of edge the bookmaker has.
