What is a Bookie’s Vig?

The world of betting is littered with its own distinctive terminology. From drifters to steamers, jollies to rags, and BOG offers, it can all sound rather odd to the uninitiated. While some terms are fairly self-explanatory, others take a little more explaining. Falling into that latter category is the term “vig”, shortened from the equally mysterious “vigorish”.

Thankfully, as with most things betting-related, the vig isn’t as complicated as it may first appear. In simple terms, the vigorish is the bookmaker’s profit margin built into the odds. Here, we take a detailed look at this US-centric term, including its origins, how to calculate it, and how it compares to the overround.

Is Vig an American Betting Term?

They like to do things a little differently in the USA – just look at how American odds differ from their fractional and decimal counterparts. In addition to talk of American odds calculations, sports betting fans are more likely to hear the terms vig or vigorish when tuning into an NFL betting show than ITV Racing. In the UK, bettors more commonly use the terms margin, overround, or book percentage.

What Does Vig Mean in Betting?

Also known as the "juice" in American betting, the vig represents the bookmaker's built-in advantage in the prices.

Consider tossing a fair coin, with a 50% chance of landing on heads and a 50% chance of landing on tails. Here, the fair odds for heads and tails are even-money. However, the bookmaker won't offer even-money. Instead, they might offer odds of 10/11 for heads and 10/11 for tails. This slight difference from the fair odds is essential for the bookmaker to make a profit in the long run.

Say the bookmaker offered even-money for both outcomes and took a £100 bet on heads and a £100 bet on tails, for total stakes of £200. Whatever the outcome, they would pay £200 to the winner (£100 at even-money returns £200), resulting in a net profit of zero – not much of a business model.

What if the bookie took £100 on heads at 10/11 and £100 on tails at 10/11, for total stakes of £200? They would now pay out only £190.91, guaranteeing a £9.09 profit, whatever the outcome.

The coin toss is a very simple example, but the vig is present across all bookmaker markets, be it a football match with three outcomes, or a big-field horse racing handicap with 20 possible results. For the operator, the vig represents the built-in edge; for the punter, it is a cost reflected in the odds.

Why Is It Called the Vig?

So that is what it is, but where on earth does the name come from?

Vigorish is generally believed to derive from the Russian word vyigrysh, meaning winnings or gain. Under that original meaning, the word referred to winnings or profit rather than specifically to the bookmaker’s profit margin.

By one route or another, vyigrysh eventually appeared in American gambling slang, where it evolved into “vigorish” and was commonly shortened to "vig". Over time, the definition subtly shifted from winnings in general to the bookmaker's cut.

Vig vs Overround: What’s the Difference?

This is where things become a little murkier. While the terms vig and overround are sometimes used interchangeably, their definitions are similar but not quite the same.

Overround is the amount by which the total implied probabilities in a market exceed 100%. Let’s go back to our 10/11 for heads and 10/11 for tails coin toss example. Expressed as a percentage, 10/11 = 52.38%. Therefore, the sum of the implied probabilities in this market is 52.38% + 52.38% = 104.76%, creating an overround of 4.76%. This is referred to as a 104.76% book.

Vig is closely related to overround but expresses the bookmaker's theoretical percentage return. In our example, the 4.76% overround is measured against a total book percentage of 104.76%. Expressed as the vig, this is 4.76 ÷ 104.76 × 100 = 4.55%.

We can also illustrate this vig definition using actual bets placed. Say, for example, our bookie took bets of £110 at 10/11 on heads and £110 at 10/11 on tails, for total stakes of £220. Whatever the result, the payout would be £210 (£110 at 10/11 returns £210), leaving our bookie with a £10 profit. Putting this into the vig calculation gives: £10 (profit) ÷ £220 (total stakes) × 100 = 4.55% (percentage profit).

While this example neatly illustrates where the 4.55% vig comes from, in reality, bookmakers won’t necessarily receive equal stakes on every outcome. As such, the 4.55% is a theoretical vig rather than a guarantee that they’ll make 4.55% profit on the market.

How to Calculate a Bookmaker’s Vig

When calculating a bookmaker's vig in the real world, you won’t often find a scenario quite as simple as a coin toss. However, whatever the sport or event, the process is the same. To calculate the vig, follow these three steps:

• Convert each set of odds into a percentage - For fractional odds: denominator ÷ (numerator + denominator) × 100. E.g. for 2/1: 1 ÷ (2 + 1) × 100 = 33.33%
• Add all the odds percentages together - This gives the book percentage. Anything above 100% is the overround, as in the 4.76% of our coin toss example.
• Divide the overround by the book percentage and multiply by 100 - E.g. 4.76 ÷ 104.76 × 100 = 4.55%

Let’s look at a couple of betting margins and vig calculations from the UK's most popular betting sports of football and horse racing.

Football Example: Manchester United vs Tottenham Hotspur

In this example match from Old Trafford, the odds and their respective percentages are:

• Manchester United Win - 4/6 = 60%
• Draw - 29/10 = 25.64%
• Tottenham Win - 7/2 = 22.22%

Adding the percentages gives 60% + 25.64% + 22.22% = 107.86%, giving a book percentage of 107.86% and an overround/margin of 7.86%. This example demonstrates how to calculate a football betting margin for a typical three-way match-result market.

Finally, complete the vig calculation: (7.86 ÷ 107.86) × 100 = 7.29%.

Horse Racing Example

Horse races typically have more than three possible outcomes. However many runners there are, the process of calculating horse racing betting margins and vig is the same. Let’s look at a fictional five-runner contest:

• Randolph Reigns - 11/8 = 42.11%
• Torzels Terrific - 9/4 = 30.77%
• Hobo Harrison - 5/2 = 28.57%
• Wrexhams Finest - 15/2 = 11.76%
• Ronnietherobot - 12/1 = 7.69%

Adding the percentages gives 42.11% + 30.77% + 28.57% + 11.76% + 7.69% = 120.90% for a book percentage of 120.90% and an overround/margin of 20.90%.

Finally, complete the vig calculation: (20.90 ÷ 120.90) × 100 = 17.29%.

The Vig: The Lower, the Better

In summary, the vig is the theoretical price we pay for betting – bookmakers are in the business of making a profit after all. However, an understanding of the vig can also benefit the punter. In particular, knowing how to calculate the vig can help identify betting sites that consistently offer the most competitive odds. And remember, when it comes to the vig, it's a case of the lower, the better.