VIG, short for Vigorish, is a crucial concept in sports betting, defined as a percentage that represents the bookies’ commission on a sporting event. Essentially, VIG is the bookmaker’s profit margin. Understanding VIG is vital for successful bettors as it helps determine the sure profit a bookmaker makes regardless of the outcome.
VIG is known by several other names. English bookmakers often use the shortened term VIG, while in North America, it is referred to as edge or juice. Other synonyms include “cut,” “take,” “margin,” “commission,” and “percentage”. The word Vigorish potentially stems from the Russian word “Vyigrysh” or the Ukrainian word “Vygrash,” which local bettors use to define winnings. VIG exists to secure the bookmakers’ profit.
The VIG Formula and Calculation
The percentage of VIG differs among bookmakers depending on the specific betting site, the sport being wagered on, and the type of market. Generally, Asian bookmakers tend to charge a lower commission (between 2% and 4%), whereas international betting sites typically set average margins ranging from 5% to 10%.
For manually calculating the VIG for 3-way markets (such as WDW or Win-Draw-Win), the mathematical formula is:
$$ \text{VIG} = [1 – {1 / (1/\text{Outcome A Odds} + 1/\text{Outcome B Odds} + 1/\text{Outcome C Odds})}] \times 100 $$
This formula can be adjusted for 2-way markets (like Moneyline or DNB) or events with several potential outcomes (e.g., a horse race with eight participants) by simply adjusting the number of fractions in the denominator.
Calculation Example
Consider a Champions League match between Barcelona and Bayern Munich on the “Full-Time Result” market with the following odds:
- Barcelona Odds: 3.30
- Draw Odds: 4.00
- Bayern Munich Odds: 2.00
Applying the VIG formula: $$ \text{VIG} = [1 – {1 / (1/3.30 + 1/4.00 + 1/2.00)}] \times 100 = \text{5.3%} $$
If a bettor sought to win €100 by placing three wagers on all possible outcomes, the total required stake would be €105.3 (€30.3 + €25 + €50). The resulting loss of €5.30 represents the bookmaker’s commission, equating to the VIG of 5.3%. This calculation means that the bettor’s payout for these prices is 94.7% (100% minus the 5.3% VIG).
Using the VIG Calculator
To avoid complicated mathematical calculations, bettors can use an online VIG Calculator to instantly view the implied probability and commission for each market. Calculating the VIG is described as a “safe way to understand where the value is”.
The process for using the VIG Calculator involves the following steps:
- Set all possible outcomes for the event (e.g., 2-way, 3-way markets).
- Add the odds for each outcome.
- Choose the desired format among the six available odds types.
- Tap “Calculate” to receive the VIG percentage and the implied probability of the possible outcomes.
Why Vigorish and Market Hold are Important
The importance of VIG lies in its direct impact on profitability: the higher the Vigorish, the lower your profits. This fact is often ignored by players who are drawn to high odds on risky markets.
To compare odds effectively based on the bookmakers’ commission, bettors should evaluate the market hold. This number shows the VIG percentage among different bookmakers, allowing the bettor to select the best price for each outcome.
For experienced bettors, monitoring the VIG has an instructive role as it helps them understand where they are investing their money and which prices (especially high ones) include less margin.
Fair Odds: How to Remove the VIG
When the implied probabilities of a market are totaled, the sum is typically greater than 100% (e.g., 105.3% in the example above). This excess percentage is due to the VIG.
To eliminate the VIG and determine the fair odds, you must divide the implied probabilities by the overall VIG percentage of the market (e.g., 105.3%). The formula for finding the No VIG Probability is:
$$ \text{No VIG Probability} = (\text{Implied Probability} / \text{Overall Percentage Market}) \times 100 $$
Once the margin is removed, the sum of the No VIG probabilities will be exactly 100%. These probabilities can then be converted into Decimal Odds (or Fair Odds) using the formula:
$$ \text{Decimal Odds} = 1 / (\text{No VIG Probability}/100) $$
The resulting No VIG odds reflect the real possibilities for an outcome to happen. For example, in the Barcelona match, the offered odds of 3.30 for Barcelona convert to higher No VIG odds of 3.47.
Strategies to Avoid High VIG
- Avoid Large Accumulators (ACCAs): The most crucial rule is to avoid betting on big ACCAs and instead place singles. When wagering on multiple events, you multiply the VIG along with your potential earnings.
- Seek 0% VIG Offers: A few leading bookmakers offer odds with 0% VIG in certain elite matches, primarily for the WDW market in football, to attract bettors who are chasing fair odds. However, bookmakers offering 0% VIG typically do not allow the bettor to combine that offer with other promotions, such as early payout offers.
- Monitor Price Changes: Odds are subject to change depending on the amount of money attracted by each outcome, which means every change has an immediate effect on the VIG.
Key Difference: Payout vs. VIG The payout percentage demonstrates the return ratio bookmakers pay back to bettors across all possible outcomes, while the VIG is strictly the bookmakers’ commission. When you total the implied odds and percentages of all probable results, the percentage usually falls between 100% and 110%, which includes both the bettors’ payout and the VIG.