Vig? What Does it Mean & How Does it Work?
You might be wondering how it is that bookies stay in operation, especially the smaller businesses, after a huge upset washes through the sports betting world. Let’s think back to Super Bowl XLII, when the New York Giants, 12-point underdogs, ended up beating the New England Patriots, who had won 18 straight games in the regular season and the playoffs and just needed that Super Bowl win to match the 1972 Miami Dolphins as the only teams to post perfect seasons. We all know what happened.
The Giants not only became the first wild card team out of the NFC to win a Super Bowl, but they posted the biggest upset in Super Bowl history. The sports books all stayed open, though. After all, think about all the bets on the Patriots that the bookies got to keep. Also, there is the vigorish, also known as the “vig,” which helps ensure that bookies make money in the long run.
How Does Vig Work?
The word “vigorish” comes from a slang word in Yiddish, which in turn comes from a Russian word for gain, or winnings. But here’s how it works in sports betting.
Let’s say that you and your friend each put down $100 on the outcome of a football game on Sunday. You do a straight up bet that the Philadelphia Eagles will beat the Cincinnati Bengals; your friend bets the opposite. After the game, one of you will walk away with $200 and the other will have nothing. However, there is nothing guaranteeing the payment except for your own trust of one another.
Bookie website wagers take place a little bit differently. When you look at money lines such as -110, you see where it comes in. If you and your friend hire a bookie to make sure that the bet takes place fairly, he might charge you $110 to win $100. Each of you pays in $110, so he has $220. After the game, he refunds the winner his $110, plus the $100 winnings. He holds onto the remaining $10 as his fee for facilitating a worry-free bet. Adding that sort of fee onto each wager through the “vig” ensures that the bookie will make money over time.
Another way to think of the vig is the risk-free part of the transaction for the bookie. Now let’s say you and your friend both want to pick Philadelphia in that game with a bookie. It’s up to the bookie to set the line appropriately so that roughly equal action comes in on both sides. That way, either way, the bookie’s income should be relatively stable.
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