In sports betting, the “vig” or “juice” is the commission that the bookmaker charges for taking your bet. It’s how sportsbooks make money, regardless of the outcome of the event. The vig is typically built into the odds that are offered on a bet. To calculate the vig from the odds, you need to understand the format of the odds and then apply a formula.
Sportsbooks use different formats to represent odds, such as decimal, fractional, or American (moneyline) odds. Here’s how you can calculate the vig in each case:
### Decimal Odds
Decimal odds are commonly used in Europe, Canada, and Australia. The vig can be calculated using the following formula:
1. Calculate the implied probability for each outcome by taking the reciprocal of the decimal odds (odds of 2.0 would imply a 50% chance of winning, for example).
2. Add the implied probabilities of all possible outcomes.
3. The vig is the difference between 1 (which represents a fair market with no vig) and the sum of the implied probabilities.
For example, if you have two outcomes with decimal odds of 1.9:
– Implied probability of outcome A: 1 / 1.9 = 0.5263 (or 52.63%)
– Implied probability of outcome B: 1 / 1.9 = 0.5263 (or 52.63%)
Sum of implied probabilities: 0.5263 + 0.5263 = 1.0526
Vig: 1.0526 – 1 = 0.0526 (or 5.26%)
### Fractional Odds
Fractional odds are popular in the UK. To calculate the vig:
1. Convert the fractional odds to decimal odds by adding 1 (e.g., 5/2 becomes 2.5 + 1 = 3.5).
2. Follow the same steps as for decimal odds to calculate the vig.
For example, if you have two outcomes with fractional odds of 5/2 (2.5 in decimal):
– Implied probability of outcome A: 1 / 2.5 = 0.4
– Implied probability of outcome B: 1 / 2.5 = 0.4
Sum of implied probabilities: 0.4 + 0.4 = 0.8
Since the sum is less than 1, the vig is calculated as 1 – 0.8 = 0.2 (or 20%).
### American (Moneyline) Odds
American odds are represented by a plus (+) or minus (-) sign, with the plus sign assigned to the underdog and the minus sign to the favorite. To calculate the vig:
1. Convert the moneyline odds to decimal odds.
2. Calculate the implied probabilities.
3. Add the implied probabilities and subtract from 1 to find the vig.
For example, if you have two outcomes with moneyline odds of -150 (favorite) and +130 (underdog):
– Convert to decimal odds: (-150 + 100) / 100 = 1.5 for the favorite; (100 + 130) / 100 = 2.3 for the underdog.
– Implied probability of favorite: 1 / 1.5 = 0.6667
– Implied probability of underdog: 1 / 2.3 ≈ 0.4348
Sum of implied probabilities: 0.6667 + 0.4348 = 1.1015
Vig: 1.1015 – 1 = 0.1015 (or 10.15%)
Remember, these calculations assume that the bookmaker has set the odds such that the implied probabilities of all outcomes exceed 100%. The difference between 100% and the sum of the implied probabilities is the vig. It’s important to note that the vig can vary between different bookmakers and different markets.