🎓 Lesson 2: Vig (Vigorish)

🎯 Objectives

By the end of this lesson, you will:

• Understand what the vig is
• Be able to calculate the vig in any market

🧠 Introduction

                 A bookmaker is a business, and like any business, it needs to make money to keep operating. Bookmakers don’t charge you a flat fee or visible commission when you place or win a bet.

So how do they make money? 🤔

                 The answer is the vig (short for vigorish) also known as the margin, the hold, or the juice.
The vig is the hidden commission a bookmaker charges on a bet.
Most punters don’t notice it because it’s baked into the odds, not taken from the payout.

We’ve already seen that: Payout = Odds × Stake

So by adjusting the odds slightly, bookmakers directly charge a commission on the payout.
It’s a subtle but powerful trick 😅.

🎬 The Vig in Action

In the last lesson, you created a book like this:

You saw two problems with this book:

1. ❌💰 You (the bookmaker) don’t make any money.
2. ⚠️ Uneven stakes expose you to losses.

✅ The vig solves the first problem by guaranteeing a margin for the bookmaker, regardless of the outcome.

🧮 Example: Adding a 5% Vig to Your Book

The new vigorish book:

Let’s see what happens when two punters each place $100 bets:

• $100 on Heads
• $100 on Tails

Market liquidity: $100 + $100 = $200

After the coin toss, one punter wins. Their payout is:
1.90 × $100 = $190

You pay them $190, and you’re left with $10 profit 🎉.

That $10 matches exactly what you’d expect from a 5% vig, which is 5% of your market liquidity:
5% of $200 = $10

👏 You’ve just made money simply by adjusting your odds smartly!

💡 A Key Insight

That might seem like magic at first, but it’s just math. The vig is a guaranteed commission. The vig gives you an idea of the return to player (RTP) in the market you bet in.

Remember:

• 📈 The higher the vig, the more profit a bookmaker makes per bet.
• 📉 The higher the vig, the more money a punter loses per bet (higher RTP).

⚠️ Read that twice and let it sink in. It’s one of the most important concepts in sports betting.

                 As a bookmaker, you want to charge as much vig as possible. As a punter, you want to play in markets with the lowest vig you can find. A higher vig means a lower RTP and a lower vig means a higher RTP. As a good punter you want to always get a higher RTP, this means you make more money in the long run or you lose less in the long run.

Notice that we didn’t show how to apply a vig to a market. That’s because it’s tricky and not necessary to know as a punter. But unlike applying a vig, calculating the applied vig on a market is straightforward.

You can use the 🔗 free Vig Calculator from OddsFantasy

🧮 Using the Calculator

Enter the odds of each outcome into the calculator, and it will show you:

• 🧾 The no-vig odds
• 📊 The implied probabilities of the no-vig odds
• 📈 The actual vig %

This process is called “de-vigging”, removing the vig from the bookmaker’s odds to reveal the true probabilities.

🚀 Call To Action

Open your bookmaker, navigate through different sports and markets, and calculate the vig.
You’ll quickly see how much your bookmaker charges on average per market.

This gives you a big advantage in choosing where to bet. You should always try to place bets in markets with the lowest vig possible. This gives you a better chance of winning long term

                 In the example above, if the market vig was small and the price was 1.95, you’d get a payout of 1.95 * $100 = $195. Good news for the punter, because you get a higher payout.

🔁 Recap

• The vig (vigorish) is the bookmaker’s hidden commission, baked into the odds.
• Adding a vig to your book guarantees profit regardless of the outcome.
• The higher the vig, the more profit the bookmaker makes and the more the punter loses.
• You can easily calculate a market’s vig using tools like the OddsFantasy Vig Calculator, and even remove it to see the “true” probabilities.

🔮 Next Lesson Preview

                 In the next lesson, you’ll learn about Market Limits, the maximum amount bookmakers allow punters to stake on specific markets. Understanding market limits will show you how bookmakers:

• Manage risk
• Protect themselves from sharp bettors
• Keep their books balanced

⏭️ Next