# What is the Vigorish in Sports Betting?

What is the vig in sports betting? Quite simply, **the vig**, vigorish, or juice, **is the house edge**. The word itself carries a bit of a negative connotation because it is also used to describe the usually high interest charged by loan sharks.

The goal of every sportsbook is to set lines that draw an equal amount of action to either side of a bet. Once that happens, the sportsbook can earn the vig from the difference between what the losing side lays on the bet and how much the winning side is paid out.

That means, in a perfect world, online sportsbooks would have **no interest** in the outcome of the sporting events you bet on. They don’t have to sweat results and can rely solely on the vig to earn profits that most players agree the sportsbooks are entitled to. In actuality though, it is difficult getting the action evenly split across lines, which means the sportsbooks can lose money if the action is not balanced.

Read on for more on how it works, how sportsbooks use the vig to earn money, and how you can calculate vig yourself just by looking at the lines.

## How do sportsbooks make money?

Sportsbooks earn money by collecting a commission on bets. This is the vig.

Most of the time, that vig is less than 5%. It’s an amount most gamblers are happy to part with in exchange for the service provided by the sportsbooks.

While sportsbooks don’t post the vig, it’s easy enough to calculate yourself using the odds. That’ll tell you when a sportsbook is getting out of line with the vig on a bet and help you avoid it.

## How is the vig calculated?

Unfortunately, sportsbooks don’t post the vig on bets, so it’s not that easy to find. However, sportsbooks do post the odds, and the odds will ultimately tell you everything you need to know about the vig.

You just need to do a little math first.

The complete formula you can use to calculate vig yourself is:

(Favorite odds/(Favorite odds + 100) X 100) + (100/(Underdog odds + 100) X 100) – 100 = Vig

## How to calculate the juice yourself

Of course, not every bet with only two possible outcomes pays the same odds on both sides as in the example above.

The moneyline for the same NFL opener described above might be **Texans** (+350) @ **Chiefs** (-460).

In this case, or any other where one side is a favorite over the other, you can calculate the vig yourself by converting the odds to implied probability.

Then, you simply add the two probabilities together and compare that number to 100%. The difference is the vig.

You can convert negative moneyline odds for the favorite to a probability by extrapolating the figure and using it in the following formula:

Odds/(Odds + 100) X 100 = Probability

Therefore, at -460, sportsbooks are giving the Chiefs an 82.14% chance of winning (460/(460 + 100) X 100 = 82.14%)

You can convert positive moneyline odds for the underdog to a probability by extrapolating the figure and using it in the following formula:

100/(Odds + 100) X 100 = Probability

Therefore, at +350, sportsbooks are giving the Texans a 22.22% chance of winning (100/(350 + 100) X 100 = 22.22%)

Add 82.14% to 22.22% and you get 104.36%. The difference between 104.36% and 100% is 4.36%

That means the sportsbook is earning a 4.36% vig on the Texans @ Chiefs moneyline.

## How does vig work?

Perhaps the best way to see how vig works in betting is to look at a simple example.

The Houston Texans are scheduled to visit the Kansas City Chiefs to open the NFL season.

Most sportsbooks have set the totals line for the game somewhere around O/U 54.5. That means you can bet either the total combined score at over or under that line of 54.5 points. At most sportsbooks, you’ll book the bet at -110 odds, whether you bet the over or the under.

The sportsbooks have set the line at a point where it should draw an equal amount of bets on the over and the under. If there is heavier betting on one side, a sportsbook will move the line to incentivize people to bet the other side until there is an equal amount of betting on both sides.

The -110 odds means whether you bet the under or over, you’ll have to lay down $110 to try to win $100, plus your bet back. For the purposes of this example, let’s say $110,000 is bet on each side for a total of $220,000 in wagers.

Remember, for a totals bet including a half-point, there are only two possible outcomes and only one side can win. For argument’s sake, let’s say the game ends 31-27 Chiefs, making for a total of 58 points. That means the over wins.

Since $110,000 was bet on the over at -110 odds over, bettors will be paid out $100,000 in winnings, plus the $110,000 originally bet, for a total of $210,000.

The sportsbooks will take the $110,000 bet on the over and return it to the winners. The other $100,000 will come from the $110,000 lost on under bets.

That leaves the sportsbooks with a $10,000 profit, meaning the vig earned on the $220,000 in totals bets for this game was $10,000.

Of course, $10,000 is approximately 4.5% of $220,000, meaning the sportsbooks earned a 4.5% vig on the bet.

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## What’s the difference between vig and overround?

There really is no difference between vig and overround in gambling. Although the number might be expressed differently, both the vig and overround are how sportsbooks make money.

Whether you call it an overround or a vig, it is still the profit margin sportsbooks factor into the price, or odds, of any bet.