Who Pays the Vig?
Vig is short for vigorish, which is the amount of money that the bookmaker takes to handle wagering. It’s also called the juice. It’s how bookmakers make their money.
Who pays the vig when betting on football? Even people who’ve bet football for decades get this completely wrong.
When a gambler bets on a football game, he bets 11 to win 10. If a gambler wins his bet, he wins $10. If he loses his bet, he loses $11. Who pays the vig, the winner of the bet or the loser? The answer almost every person will give is that the loser pays the vig by virtue of the extra dollar he pays. However, this is incorrect. The winner pays the vig. The winner always pays the vig in games of chance, whether it be in the casinos, the lottery or in sports betting. The reason for this is that the loser of the bet always loses what he had at risk, no more, no less. The winner always receives LESS than the proper payout. The difference in what the winner should have been paid and what he received is what the bookmaker kept, which is the vig.
Let me give a simple example. If two friends decide to bet $11 on a football game, one wins $11 and the other loses $11. There’s no vig in play here. Let’s say the same two friends decide to bet another game, but this time with a bookie. Once again they both bet $11. When the game is over, one of them loses $11, just like in the first case. However the winner wins only $10, as the bookie keeps a dollar as his fee, which is the vig. In both cases, the loser loses the same amount. It doesn’t matter to him if a bookie was involved or not. He loses what he bet. Does it matter to the winner if a bookie was involved? Absolutely! He wins $1 less when the bookie was used.
I once had a friend tell me that I had it all wrong, that I was playing with the numbers somehow. He tried turning things around. His reasoning went like this: If two friends decide to bet $10 on a football game, one wins $10 and the other loses $10. There’s no vig in play here. Let’s say the same two friends decide to bet another game, but this time with a bookie. When the game is over, the winner still receives $10, but the loser loses $1 extra for a total of $11. In both cases, the winner wins the same amount. It doesn’t matter to him if a bookie was involved or not. Does it matter to the loser if a bookie was involved? Absolutely! He loses $1 more when the bookie was used.
Can you spot the flaw in that reasoning?
What my friend forgot is that while the winner wins the same amount either way in his example, he risked more when the bookie was involved. He was still shorted $1 in the payoff, which is the vig.
Remember, the loser ALWAYS loses everything he risks, no matter the game, no matter if a bookie or a casino is involved or not. The vig is always deducted from the winner and never added to the loser. The winner wins less than the correct payout. The difference between what the winner receives and what he should have been paid is the vig.
It’s true that this knowledge isn’t going to save you any money or help you win more games. It should, however, serve as a warning of how little most people know about sports betting and handicapping, even those with lots of experience.