How do sportsbooks make money? That’s a complicated question with plenty of moving parts, but the most straightforward answer is "the vig". The vig, also known as “juice”, is the edge that the sportsbooks get when posting each line.
No bet offered by sportsbooks truly pays out one-to-one. Think about it this way. Imagine that two NFL teams were dead even, with both owning exactly a 50% chance of winning the game. The true odds would suggest that both teams should then have odds of +100 odds. If you were to make a bet with a friend, those are the odds that you would likely give each other.
However, in that scenario, the sportsbooks would likely list both teams at -110. That difference between the -110 odds vs. the “true odds” of +100 is the vig. Sportsbooks are essentially charging you 10 cents of juice on whichever side you prefer in that contest. Instead of risking $100 to win $100, you’d have to risk $110 to win $100.
Let’s dive into everything you need to know about the vig and how to combat it as a savvy sports bettor.
What is the vig?
Vig is technically short for “vigorish”, though you’ll very rarely actually hear someone say the full word. The shortened version is far more prevalent, and the vig basically represents the house edge.
In games where the betting action is split 50/50, if both teams are listed at -110, the sportsbook will make a profit of around 10% regardless of who wins.
For example, let's say that the Kansas City Chiefs and San Francisco 49ers are both listed at -110, and both sides have $11 million in spread bets. Regardless of which team were to win, the sportsbooks would collect $11 million from the losing side and pay out $10 million to the winners. That would leave the sportsbook with a $1 million profit just for booking all the action.
Jan 28, 2024; Baltimore, Maryland, USA; Kansas City Chiefs quarterback Patrick Mahomes (15) passes the ball against the Baltimore Ravens in the AFC Championship football game at M&T Bank Stadium. Mandatory Credit: Geoff Burke-USA TODAY Sports
That’s why many people believe the goal of the sportsbooks is to garner equal action on every single game. In reality, that’s not exactly the case. Sportsbooks are happy to “take stands” on certain contests if they believe that the line is in their favor.
We see this every day in every single sport; there are games where the public overwhelmingly prefers one side over the other, and if the sportsbook disagrees with their assessment, they’re comfortable needing one team more than the other.
However, for games where they believe their edge is smaller, getting as close to even as possible to ensure a small win is their endgame.
The standard vig on a spread wager is -110 on both sides, meaning that each side will have to pay 10 cents of juice. That said, that’s not always the case. You’ll often see one side juiced to -115 and the other at -105, and occasionally, one side will even be -120 with the other as high as +100. It’s still the same amount of juice being collected, just not equally on both sides.
This is particularly true around key numbers. For example, let’s say that the Browns are favored by three points at home against their divisional rivals, the Steelers. If most of the action is coming in on Pittsburgh, the road team, the sportsbooks might be hesitant to move the spread from -3.0 to -2.5. Instead, they can move the juice, dropping the Steelers from -110 to -115 or even to -120.
Cleveland Browns' Myles Garrett pressures Pittsburgh Steelers quarterback Mason Rudolph during a third quarter pass play on Sunday, Jan. 3, 2020 in Cleveland, Ohio, at FirstEnergy Stadium. The Browns won the game 24-22. Photo Credit: PHIL MASTURZO / USA TODAY NETWORK
Sportsbooks are often hesitant to move the spread to -2.5 and open themselves up to a potential disaster where the favorite wins by exactly three points. In that scenario, all the underdog bets they took at +3.0 would push and all the bettors who took the favorite at -2.5 would win.
With moneyline bets, the vig can be significantly more expensive. The best baseball teams can get to -300 or higher when facing subpar competition. And in college football or basketball, you can see moneylines approach -1000. Those will result in bigger moneyline odds for the underdogs, but if you want to take a favorite to beat a lesser team, you’re going to have to lay heavy money.
One way or another, every bet posted by the sportsbook is going to have some sort of vig attached to it. You can combat this by shopping around to ensure that you’re getting the best price.
This is true for all types of bets. If FanDuel is offering a team at -110 but DraftKings is offering them at -105, then you should be making the bet on DraftKings 100% of the time. The five cents of juice may not feel like much savings, but if you can save five cents on every bet over the course of a year or a decade, it’s going to make a massive difference in profit margin.
It’s yet another reason why having access to as many sportsbooks as your state allows is the absolute best way to become a better sports bettor.
How to calculate the vig
Calculating the vig is extremely easy with the proper tools. All you need is an odds converter, which can show you the implied probability for each wager.
Let’s go back to our standard -110 juice. If we plug that into the Fantasy Life Odds Calculator, it will tell you that translates to an implied probability of 52.38%. I’m using American odds for this example, but it works exactly the same for decimal or fractional odds as well.
That 52.38% implied probability is the break-even point for standard wagers. If you’re winning more than 52.38% of your bets at -110, you’re going to be in the black. If you’re under that threshold, you’re going to be in the red.
The more juice that you’re paying on each wager, the higher the breakeven point. -120 odds convert to a 54.55% implied probability, and -150 converts to 60%. In other words, the more juice that you’re paying for each wager, the more confident you need to be that your bet is going to win.
Paying for “over-juiced” bets is one of the easiest ways to lose your bankroll as a sports bettor.
Think about it like this. The best MLB teams win roughly 100 games during the regular season. That sounds like a lot, but it means that they’re still winning just 61.7% of their games. If their average moneyline odds for the season is around -200, a 66.7% implied probability, that team would be unprofitable for bettors. Even though they’ll only lose 62 of their 162 wagers, the losing bets will be more than enough to cancel out the winning bets.
In short, you need to try your hardest to compare the implied odds of each bet you make to the “true odds.” Calculating “true odds” is extremely difficult, but using simulators like the ones offered at Unabated and Paydirt can help massively.
Why do sportsbooks have a vig?
First and foremost, sportsbooks are businesses. The goal of every business is to make as much money as possible. That’s true whether you’re selling goods, offering services, or anything in between.
The good news is that competition helps every consumer, regardless of the industry. It’s why monopolies were outlawed; the ability to shop around for the best prices helps keep sellers honest.
Your ability to choose where you place each wager is a massive advantage. If just one sportsbook is offering -105 on a particular wager while the rest of the industry is at -110, that’s a win for the consumer. It allows you to circumvent the traditional -110 vig very frequently.
Let’s take a look at the Super Bowl odds at the time of writing. You can save five cents compared to the rest of the industry by taking the 49ers on DraftKings, while you can grab an extra five cents on the Chiefs at FanDuel, Caesars, and BetMGM:
In other words, sportsbooks can levy a tax on the sides, but there are ways to work around it.
Additionally, keep in mind that sportsbooks have to offer lines on every game in every sport every day of the week. As bettors, we only have to bet on games where we see an edge. That’s an advantage.
The sportsbooks know that there are areas where they’re not as sharp – typically smaller sports like non-major college basketball, the WNBA, etc. – but they still have to post lines for them. The juice may feel like an unfair advantage for the sportsbooks, but I think of it as a tax for the freedom to bet on only the areas that I think are profitable.
How to beat the vig
If you’re a bettor, you’ve likely heard the phrase that “the house always wins”. It’s true in most areas of gambling. If you sit at a blackjack table long enough without counting cards, the house is generally going to beat you. They have the mathematical edge, so eventually, they’re going to take your money. The same is true for basically every other game in the casino: slots, roulette, craps, baccarat, you name it.
You know where it isn’t guaranteed? The sportsbook. The house can charge a vig, but if you’re better at predicting what will happen in any given game, you can beat them. That’s why sports betting is so alluring.
The easiest way to beat the vig is to shop around. You should be checking the odds for every bet that you place regardless of amount and whether it's a side, prop, or futures bet to ensure that you get the best line.
However, that’s still not going to guarantee profit. There are plenty of bettors who get the best line but aren’t beating “the vig.” It also helps to get your bets in as early as possible. When lines are first released, they are at their most vulnerable. The professional bettors have yet to weigh in, which means that the sportsbooks don’t yet know which side they’re going to prefer.
For example, a divisional matchup between the Bills and Dolphins could open at -110 on both sides, but that game could easily close at -130 for the Bills and +110 for the Dolphins.
Jan 7, 2024; Miami Gardens, Florida, USA; Buffalo Bills quarterback Josh Allen (17) throws the football against the Miami Dolphins during the fourth quarter at Hard Rock Stadium. Mandatory Credit: Sam Navarro-USA TODAY Sports
If you’re able to bet on Buffalo at -110 before the line moves, you’ve earned yourself 20 cents of closing line value (CLV). Even if that bet doesn’t win, you’ve now successfully managed to beat the vig. You were able to pay 20 cents less than the person who made the same bet later in the week. It’s a big part of the reason why looking to beat the line and grab CLV is a huge part of my betting philosophy.
But even then, it's not going to ensure profit. Ultimately, the only way to beat the sportsbooks over the long run is to be smarter than them.
It’s a daunting task, but there are a ton of resources available to help. Our team is up more than 56 units during the NFL season, and those bets are completely free in our NFL Bet Tracker. Leaning on all the resources available to you to make the best bets you possibly can is the only surefire way to beat the vig.
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Other types of vig
Vig and juice are the most commonly used terms for sports betting, but there are some other terms you’ll hear as well.
“House edge” is used more for things like table games. For example, the house edge in blackjack is less than 1% even if you’re playing perfect strategy. For roulette, the house edge is either 2.7% (single zero) or 5.26% (double zero). The house edge can get as high as 15% on some slot machines, and it’s around 3.5% in three-card poker.
“Rake” is another way that the casinos make money, but you’ll commonly hear it used in poker. The rake is the standard fee that the casinos take out of each pot. As with sports betting, poker is another game where skill ultimately reigns supreme. The rake is unilaterally applied across all pots, so the house doesn’t care who wins in poker. As long as you can win more pots than your opponents, you can successfully “beat the rake” and profit.
Finally, “overround” is another term that can be associated with sportsbooks. It works by calculating the implied odds for each bet and adding them up. If they equal 100% exactly, there is no overround for a particular bet. That said, that’s never going to happen. The sportsbook is always going to charge some sort of premium, and the percentage over 100% is the overround.
Going back to the example for Super Bowl LVIII, BetMGM has the 49ers at -130, which gives them a 56.52% implied probability. They also have the Chiefs at +110, which translates to 47.62%. Adding those figures together equals 104.14%, so the overround on that market is 4.14%.
Some markets will have a larger overround than others, and the bigger the overround, the worse the odds for bettors.
