Vigorish aka The Take or Juice explained

Juice | Vigorish | The Take

Vigorish which is often abbreviated as the Vig is an old Yiddish term that explains what the bookmaker/oddsmaker charges.

You have probably heard of the term Juice before or the houses take and all of these terms are referring to the proceeding definition and explanation of Vigorish. This is done so that the bookies can profit on wagers no matter what the final outcome of any event is and thus is also beneficial as a trust factor to the betting public because the bookmaker is taking no particular interest in the winner of such events.

The goal of the bookie is to receive equal betting action on each end of the sports match. By doing so he lowers his overall probability of taking a loss and collects the Vig (vigorish).

You have probably heard that or even seen the bookies lines are moving on a particular sports event. This happens when the oddsmaker adjusts the spread to continue receiving equal wagers on both sides of the sporting event. For example if the Indianapolis Colts opened the Super Bowl receiving 5 points and everybody started to wager on the Colts instead of the -5 for the New Orleans Saints than the oddsmaker will see that the current odds seem to be too favorable and not beneficial to him due to the lopsided amount of wagers on the Colts and will raise the spread for the Colts to a higher number say 6 or 7 points or until he lowers his counterparty risk to a nominal amount that is feasible for him to pull in a profit. This is somewhat similar to how a market maker works in the stock market.

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Vigorish Percentage can be calculated with the following formula :

$v = 100*(1 - {p*q \over p + q})$

In the above formula p and q stand as the decile payout for each possible outcome.

Vigorish Example:

In an even money wager with 2 people betting on opposite sides of the event with 1 to1 odds.Without the cut of the oddsmaker on a 1 to 1 basis it would be $100.00 risked to win $100.00. So the total pot is $200.00 (100.00 x 2). The winner obviously gets the entire $200.00 while the loser goes home empty handed.

If a sportsbook is involved with odds of -150 vs. -150 being the juice it would take a bettor $150.00 to win $100.00. It would be $300.00 collected in the sportsbook total pot and the additional $50.00 per person is the bookies commision for taking on the action/wager. The $50.00 cannot be doubled down by the winner of the wager simply he or she would lose the $150.00 wagered. If the bettor won the wager than they would collect the 150 wagered + the 100 won for a total of $250.00.

In the previous example the oddsmaker took his vig for taking on the action. The winning wagerer received the full $150.00 back + $100.00 for winning the bet. It may appear that only one player paid up for the vigorish while the other while those making the bets placing wagers at fair odds with no bookie would drastically change the results because it would be cheaper for the bettor to place a wager with less "chalk" on the line.

Example

If a gambler is looking to make 120.00 independently of the any rake. So you have −100 vs. +100 for even money (also known as moneyline with out the take) odds & the bettor places a wager for 120 to win 100. Under traditional juice the odds would be −120 v. −100 therefore the gambler would have to bet 120 to receive 100. In this example the loser would be out of $120.00 under the take/odds compared to 100 under fair odds, so the loser pays 20 for the vigorish. The lucky winner receives their 120 + 100.00 profit, opposed to an even money wager getting only $100.00 back. The winner wagerer has a net difference of 0 With this assumption the loser paid the extra $20.00 of the vigorish.

If this seemed a little complicated trying to explain the Vigorish, take, or juice please do not be alarmed as it is a complicated subject and that is why sports betting and oddsmaking is not an easy thing to cover. I see that Wikipedia has done an article covering alot of the content that I wrote in more laymens terms.