A bookie charges a player vig or juice for each bet. By doing so, the sportsbook can earn money on every wager. As a result, the bookmaker will benefit from the bet regardless of the outcome. It’s possible, however, to remove sportsbook vig from betting lines.
Bookies collect the vig by adding it into odds. Most per head sportsbook solutions automatically do it for the bookies. Also, the vig will modify the odds. Thus, you need to remove the vig to have a more accurate perspective of what bookies expect to happen in the match.
Why You Should Remove Sportsbook Vig
Sportsbooks calculate the risks of each market they offer. Their mission is to ensure players bet on both sides of the line. Thus, the sportsbook pay per head will adjust the odds to attract more action on the side of the line. In some instances, the bookie would include a higher vig on a side to guarantee profit.
Finding the actual probability will help you better understand the bookie’s expected outcome for the game. Thus, you can compare how much the bookie inflated the price on the wagering line. Also, you can use the actual probability to compare the odds of two sportsbooks.
There are several ways to remove the vig and find the actual probabilities. The first step is to calculate the implied probability of all results. Also, the formula is risk over return. Let’s take a look at an example:
- Team A -300
- Team B +225
With this example, the implied probability on Team A is 75 percent. On the other hand, the implied probability on Team B is 30 percent. Thus, the total implied probability is 1.05 or 105 percent.
The total implied probability is more than a hundred percent. Thus, the bookie is guaranteed to earn more money than the payout. As you can see in the example, the sportsbook will pay out $100 after getting $105 worth of bets.
To get the actual probability, you divide the team implied probability by the total implied probability. In the example, the actual probability of Team A is:
75/105 = .71 or 71 percent
On the other hand, the actual probability of Team B is:
30/105 = .29 or 29 percent
By getting rid of the overround, you can see the actual probabilities. Thus, you can identify overpriced lines.
Aside from players, potential bookies can also use the tips above. You should know how to compute the vig when you want to launch a sportsbook with a pay per head solution. That way, you’ll learn how much vig the software automatically added.