Sportsbook Vig Explained: How Bookmakers Make Money

What Is Vig?

Vig (short for vigorish) is the commission a sportsbook charges on every bet. It's also called juice, margin, overround, or hold. It's the mechanism that ensures sportsbooks are profitable regardless of the outcome of any individual game.

Think of it this way: in a perfectly fair market, a coin flip would be priced at +100/+100 (even money on both sides). But sportsbooks price it at -110/-110, requiring you to bet $110 to win $100. That extra $10 per $110 wagered is the vig.

How Vig Works in Practice

A standard American sports betting line looks like this:

• Team A: -110
• Team B: -110

Both sides have the same implied probability:

Implied probability = 110 / (110 + 100) = 52.38%

Total implied probability: 52.38% + 52.38% = 104.76%

That 4.76% above 100% is the vig. In a fair market, both sides would be 50%. The sportsbook has inflated both sides, creating a built-in profit margin.

The Book's Profit

If the book takes equal action on both sides ($110,000 on Team A, $110,000 on Team B):

• Total wagered: $220,000
• Winner payout: $210,000 (the winning side's $110,000 stake + $100,000 profit)
• Book's profit: $10,000 (4.55% of total wagered)

The book profits $10,000 regardless of which team wins. This is why they call it the "hold": it's the percentage the house holds from total handle. According to Investopedia, the vig is "essentially a fee for facilitating the wager." State gaming commissions like Nevada Gaming Control Board report that sportsbooks typically retain 5-7% of total handle annually after accounting for variance in game outcomes.

Calculating Vig

Method 1: From Implied Probabilities

Vig = Total Implied Probability - 100%

For -110/-110: 52.38% + 52.38% - 100% = 4.76%

Method 2: From Decimal Odds

Vig = (1/Odds A + 1/Odds B - 1) x 100

For odds of 1.909/1.909: (0.5238 + 0.5238 - 1) x 100 = 4.76%

Method 3: For Asymmetric Lines

Lines aren't always -110/-110. Consider:

• Team A: -180 (implied 64.29%)
• Team B: +155 (implied 39.22%)

Vig = 64.29% + 39.22% - 100% = 3.51%

Use a hold calculator for quick calculations on any market.

Vig Across Different Markets

Not all bets carry the same vig. Understanding where margins are thin versus wide is critical for finding value.

Why This Matters for You

Every percentage point of vig is money coming out of your pocket. If you're betting markets with 3% vig versus 10% vig, you need more than three times the edge in the higher-vig market just to break even.

Vig by Sportsbook Type

Different types of sportsbooks charge different levels of vig:

Sharp Sportsbooks (Low Vig)

Books like Pinnacle operate on thin margins (1-3% on major markets) and make money through volume. They welcome winning bettors and rarely limit accounts.

Pros: Best odds, lowest vig, most accurate lines. Cons: Limited promotional offers, used as the benchmark for devigging.

Recreational Sportsbooks (Higher Vig)

DraftKings, FanDuel, BetMGM, and similar US-focused books charge higher vig (4-8% on main markets, more on props/SGPs). They make money through higher margins and limiting winning bettors.

Pros: More promotions, free bets, odds boosts. Cons: Higher vig, will limit winning accounts, lines less accurate.

Why the Difference?

Sharp books attract professional bettors who demand the best odds, so they compete on price. Recreational books attract casual bettors who are less price-sensitive, so they compete on marketing, promos, and user experience.

For your purposes, you want accounts at both types. Use sharp books for baseline pricing and recreational books for finding value bets where their odds disagree with the sharp line.

How Vig Affects Long-Term Profitability

The Break-Even Win Rate

At different vig levels, here's how often you need to win on -110/-110 style bets just to break even:

At standard -110 vig, you need to win 52.38% of bets just to break even. That 2.38% above 50% is entirely the cost of vig.

Impact on +EV Betting

If you consistently find bets with 3% EV, your actual return depends heavily on the average vig of the markets you're betting:

• Low vig markets (3%): More of your 3% edge translates to profit
• High vig markets (8%): A significant chunk of your edge is eaten by the margin

This is why sharp bettors gravitate toward low-vig markets and use no-vig calculations to assess true probabilities.

Reducing the Impact of Vig

1. Shop Lines Across Multiple Books

The single most effective way to reduce vig. If Book A has Team X at -115 and Book B has Team X at -105, you save 10 cents of vig by betting at Book B. Across hundreds of bets, this adds up enormously.

2. Focus on Low-Vig Markets

Main markets (moneylines, spreads, totals) on major sports carry the lowest vig. Build the core of your strategy around these markets.

3. Exploit Promotions

Free bets, odds boosts, and profit boosts effectively reduce or eliminate the vig on specific bets. Use them systematically.

4. Time Your Bets

Vig tends to be tightest close to game time on major events, when the most money is in the market and competition between books is fiercest.

5. Avoid High-Vig Traps

SGPs, large parlays, and exotic props carry massive vig. Unless you have a specific, well-researched edge, the math is strongly against you.

Key Takeaways

• Vig is the sportsbook's built-in margin on every bet, typically 3-5% on main markets
• Higher vig = harder to profit because every point of vig raises your break-even win rate
• Different markets have wildly different vig, from 3% on moneylines to 30%+ on large parlays
• Sharp books charge less vig than recreational books
• Line shopping is the easiest way to reduce vig across your betting portfolio
• Calculate vig before betting and use a hold calculator to know exactly what you're paying