When you place a sports bet with your friends, a $10 bet means a $10 win. So why is it that when you bet with a professional bookmaker, a $10 bet pays less than $10?
The answer is simple. You pay for the bookmaker’s services through what is known as juice, the cut, or the vig – short for vigorish, a term that comes from a Russian word meaning “winnings.”
The industry standard for vig is 10 percent, which means that for every $1.10 you wager, you can take $1 in winnings. This is why when you look at a bookmaker’s posted point spreads, they look like this, with the last column representing your actual take (including the vig):
Chargers +2.5 (-110)
Ravens -2.5 (-110)
A bookmaker’s ultimate goal is to create a point spread that results in an equal amount of action on either side of the line.
This protects them from the potential of taking a significant loss; something bookmakers notably failed to protect themselves against in Week 9 of the 2018 NFL season when teams that received the majority of action went 11-0.
At William Hill, the Kansas City Chiefs received 90 percent of the point spread bets placed on its game with Cleveland, and they went on to win by 16 points on an eight-point spread.
Overall, Nevada-based sportsbooks lost nearly $10 million that Sunday because their point spreads didn’t create equal action. The vig is there to help protect against losses like that or to ensure a profit when the action is equal.
Can I avoid paying vig?
The short answer is no. Think of it as a built-in service charge. If you want the service, you pay the charge.
The long answer is no. Though, you can find bets where the vig is lower than 10 percent. As bets come in and the point spread moves in the direction of the public action, so does the vig. It’s not uncommon to see posted numbers as low as -105 to -103 based on where the wagers fall.
Vig percentages can also shift even when the point spread doesn’t. If a particular game sees a lot of action equally spread out, the potential for a big loss for the bookmaker drops considerably. Lower risk for them can often mean a lower vig for you.
On the flipside, when games don’t see a lot of action, a bookmaker’s margin for error goes down, their risk level goes up, and so does the vig they’re likely to charge.
Because of the competitive nature of the growing sportsbook industry, you can shop around and potentially find opening spreads with the vig as low as 5 percent. You might also see some new customer offers where the sportsbook pays the vig on initial wagers.
However, as a general rule, the vig will always be there, and you will always have to pay it. It’s merely the cost of doing business.