How do I calculate vig?
Comprehensive guide on calculating vig and how arbitrage betting offers a superior alternative to fighting bookmaker margins.
How do I calculate vig?
To calculate vig, you determine the bookmaker's margin by comparing the implied probabilities of all possible outcomes and subtracting 100%.
The vig, or vigorish, represents the bookmaker's built-in commission ensuring profit regardless of the event's outcome.
Understanding vig is essential since arbitrage betting eliminates the impact of vig by exploiting differing odds across bookmakers for guaranteed profit.
What Is Vig in Sports Betting?
Vig, short for vigorish, is the commission or margin that sportsbooks include in the odds to ensure they make a profit regardless of the event's outcome. It shifts the true odds in the bookmaker's favor, meaning the total implied probabilities of all outcomes add up to more than 100%.
- •Also known as juice or margin
- •Ensures sportsbook profitability
- •Embedded in the odds offered to bettors
💡Basic Vig Illustration
If a two-outcome event is priced at -110 on both sides, the implied probabilities add to more than 100%, indicating the presence of vig.
Implied probability = 100 / (Odds + 100). For -110 odds: 100 / (110 + 100) = 47.62%. Total = 47.62% + 47.62% = 95.24%, so vig = 100% - 95.24% = 4.76%
How to Calculate Vig Step-by-Step
Calculating vig involves converting odds to implied probabilities for all possible outcomes, summing these probabilities, and then subtracting 100%. The difference is the bookmaker's margin or vig.
- •Convert odds (decimal or American) to implied probabilities
- •Sum all implied probabilities for the event
- •Subtract 100% from the total to find the vig
Converting American Odds to Implied Probability
For positive American odds, implied probability = 100 / (Odds + 100). For negative odds, implied probability = Odds / (Odds + 100) where Odds is absolute value.
- →Positive odds example: +150 → 100 / (150 + 100) = 40%
- →Negative odds example: -120 → 120 / (120 + 100) = 54.55%
Using Decimal Odds
Implied probability equals 1 divided by the decimal odds. For example, decimal odds of 2.0 imply 50% probability.
- →Decimal odds 1.5 → 1 / 1.5 = 66.67%
- →Decimal odds 3.0 → 1 / 3.0 = 33.33%
💡Calculating Vig for a Two-Outcome Event
Given odds of -110 on both sides, convert to implied probabilities and calculate vig.
Implied probability per side = 100 / (110 + 100) = 47.62%. Total = 95.24%. Vig = 100% - 95.24% = 4.76%
Impact of Vig on Bettors and Betting Strategies
Vig increases the break-even point for bettors, meaning you need to win more than 50% of bets at -110 odds to be profitable. This makes consistent profits challenging and requires precise calculations, especially when considering multiple bets or parlays.
- •Raises required win rate to break even
- •Reduces overall bettor profitability
- •Complicates long-term winning strategies
Challenges for Risky Strategies
Strategies like matched betting or value betting can have risks due to miscalculations of vig or odds changes. Arbitrage betting eliminates this guesswork by securing guaranteed profit regardless of vig.
- →Risk of misjudging vig impact
- →Potential losses if odds shift
- →Arbitrage removes these risks by using multiple bookmakers
💡Break-Even Win Rate at -110 Odds
Calculate the minimum win rate needed to break even with vig included.
Break-even win rate = 100 / (Odds + 100) = 52.38%
Advanced Vig Calculations for Multiple Outcomes
For events with more than two outcomes, calculate the implied probabilities of each outcome, sum them, and subtract 100% to find vig. This can get complex with varying odds formats and multiple betting lines.
- •Apply the same formula for each outcome
- •Sum all implied probabilities to find overround
- •Subtract 100% to get total vig
Example: Calculating Vig in a Three-Way Market
For a soccer match with home win, draw, and away win odds, convert each to implied probability and sum to find vig.
- →Home win odds: 2.50 → 40%
- →Draw odds: 3.20 → 31.25%
- →Away win odds: 2.80 → 35.71%
- →Total = 107.0%, Vig = 7.0%
💡Three-Way Market Vig Calculation
Using decimal odds for home, draw, and away, calculate vig.
Vig = (1/2.5 + 1/3.2 + 1/2.8) * 100 - 100 = (0.4 + 0.3125 + 0.3571)*100 - 100 = 107.0% - 100 = 7.0%
Tools and Software to Calculate Vig Efficiently
Manual vig calculation can be tedious and error-prone, especially across numerous events or complex markets. Tools like ArbitUp automate these calculations and help identify arbitrage opportunities, simplifying the process for bettors.
- •Automates conversion of odds to probabilities
- •Quickly calculates vig and overround
- •Integrates arbitrage detection to exploit vig differences
💡Using ArbitUp for Vig and Arbitrage
ArbitUp streamlines the process by calculating vig and spotting profitable arbitrage bets automatically.
No manual calculation needed; tool outputs vig and arbitrage percentages instantly.
Why Arbitrage Betting Is a Superior Alternative to Fighting Vig
While vig represents a challenge to consistent profitability in traditional betting, arbitrage betting leverages discrepancies between bookmakers’ odds to guarantee profit regardless of the vig. Instead of trying to beat the bookmaker’s margin, arbitrage exploits differences in vig across sportsbooks.
- •Arbitrage eliminates the negative impact of vig
- •Reduces risk by locking in profit
- •Turns bookmaker margins into opportunities
💡Arbitrage Example Overcoming Vig
By placing bets on both sides with different bookmakers offering varying odds, you can secure a profit even after accounting for vig.
If bookmaker A offers odds implying 52% probability and bookmaker B offers odds implying 50%, placing proportional bets can guarantee profit.
Common Mistakes to Avoid
- ⚠️Ignoring the vig when calculating potential profits, leading to overestimation of returns
- ⚠️Confusing decimal and American odds formats when converting to implied probabilities
- ⚠️Failing to sum all outcome probabilities, especially in multi-outcome markets
- ⚠️Assuming that odds reflect true probabilities without considering bookmaker margin
- ⚠️Not accounting for vig when using complex betting strategies, increasing risk
- ⚠️Attempting manual calculations for many bets which can lead to errors
- ⚠️Overlooking how arbitrage betting can eliminate vig-related risks
The Power of Arbitrage Betting
Arbitrage betting eliminates guesswork by ensuring guaranteed profits regardless of the bookmaker's vig or margin.
- ✓Removes risk caused by bookmaker vig
- ✓Provides consistent, risk-free profit opportunities
- ✓Simplifies betting decisions by focusing on odds discrepancies
Get Started with ArbitUp
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