Let’s say that oddsmakers set a spread so that they get achieve even betting action: 50 percent of bettors bet on Team Blue and 50 percent of bettors bet on Team Red. The bookmakers set the line perfectly. After the matchup, the sportsbook collected $10 million dollars from the bettors who lost and they paid out $10 million dollars to the bettors who won. Their net profit is $0.
A sportsbook will go out of business quickly if that is repeatedly the case. For this reason, sportsbooks apply what is known as “the vig.” Vig is short for vigorish.
Oddsmakers applies a vigorish to every bet that you make. The vig is written with either a + or – sign and then a number. The most common vig you will see looks like this: -110. A vig of -110 means that in order to win $100, you have to bet $110. The vig is a ratio.
You read the vig first by identifying if the symbol is a minus or a plus.
- – = in order to win $100 you have to bet #
- + = betting $100 wins you #
– = in order to win $100 you have to bet #
In this scenario, with the vig set at -110: You walk up and place a $110 bet. If you win you will get your $110 stake back, plus you will collect $100 in winnings.
Remember the vig is a ratio. You do not have to bet $110. Instead of $110, you could place a $55 bet in order to win $50. Or $11 to win $10.
This vig is how Vegas can stay Vegas. Oddsmakers collect $110 on every loss and they pay out $100 on every win. It’s essentially a 10 percent fee to play (the math doesn’t quite work out to 10 percent, but it’s close enough.)
+ = betting $100 wins you #
When the vig is written with a + sign, it indicates you win a little more than you bet. For example, you can risk $100, but if you win you would collect $110 in winnings.
Understanding What the Odds Imply
The starting point or odds is -110. That is meant to represent an even matchup. The vig, also known as odds, move to create greater risk or greater incentive for a bettor.
Understanding the risk or incentive implied by the vig is key to placing an intelligent bet.
A few examples:
First example: +200
This example reads as, “betting $100 wins you $200.” This is telling you that you are betting on the underdog. Vegas does not expect this team to win so they set the odds to be attractive for bettors to choose the underdog. On a spectrum of somewhat of an underdog to a massively unlikely to win candidate, this bet implies they are somewhat unexpected to win.
Second example: +100
Here you read the odds as, “betting $100 wins you $100.” This is almost an even match-up. Vegas is missing the vig in this example. They are giving the bettor a slight encouragement by forgoing the vig. This set-up could be written as +100, -100, or “pk’em”—they all mean the same thing. However, oddsmakers know the + sign encourages more betting action and they will typically write it as +100 whenever possible. You will rarely, if ever, see it written as -100.
Third example: -1800
You read these odds as, “in order to win $100, you must bet $1800.” This implies that you are betting on a wild favorite. The team or individual you are betting to win the matchup will, in the oddsmakers’ opinion, almost certainly win.
Fourth example: +1000
This example reads as, “betting $100 wins you $1,000.” In this case you are betting on the underdog, and one that is pretty unlikely to overcome the odds. If you win, you get 10 times your risked money! If that underdog wins one out of every ten times, you break even. If you think the underdog will win more than one out of every ten times, you should make this bet.
Fifth example: -10,000
Read these odds as, “in order to win $100, you must bet $10,000.” In this case, you are betting on an extreme favorite, a player or team even more likely to win than in our third example.
Bets Other than Just the Spread
Remember how you can bet on the spread of a game? And you can disregard the spread and simply bet on the point total of the game? Well, if you want to skip over all that nonsense and just pick the winner of the game, oddsmakers are happy to help you make that bet.
Oddsmakers allow you to place a moneyline bet.
A moneyline bet is where a bettor disregards the spread and the point totals and they only pick who is going to win. This assumes that there is no betting score, as with a straight bet. The real matchup score is going to be the score you use.
If oddsmakers always offered a -110 vig for matchups, they would lose money over time because bettors would keep picking the more favorable team or opponent. Thus, oddsmakers put a fee or penalty on the bet in order to even the scale. Oddsmakers even the betting scales by setting odds.
If the odds are set at -300, we would read that bet as “in order to win $100, you have to bet $300.”
In this scenario, if you place two bets with odds at -300 and you win one Bet 1 and you lose Bet 2, you come out at – $200.
- Bet 1: Risk $300, Net Winnings $100
- Bet 2: Risk $300, Net Losses $300
- TOTAL Net: – $200
This is how oddsmakers allows bettors to place bets on the favorite in a sporting event. They apply a steeper vig. If the favorite ever does lose, the bettor is going to pay a heavy fee or penalty.
So, you can choose the favorite to win in a matchup and not deal with penalty points from a spread. However, the payout if the favorite does indeed win is going to be much lower. Or, you are going to have to risk so much that if you are ever wrong you are losing a lot to win a little.
People initially love the sound of simply picking the winner. However, bettors are less sweet on moneyline bets after they think them through. Bettors look at moneyline bets and say, “you’re telling me I have to bet $300 just to win $100? That doesn’t sound very fun!”
What a bettor would much rather do is bet $100 to win a boatload! The bettor wants to risk a toothpick and win a haystack, rather than the reverse. If you feel similar, you might like a parlay.
Learning to Set Your Own Lines
Example: Betting on Whether or Not the Sun Rises Tomorrow
If you are a bookmaker and you need to set a line for whether or not the sun rises tomorrow (and you’ll have to pay the bettor if indeed the sun does rise tomorrow). Where would you set the line?
You are fairly confident the sun will, indeed, rise tomorrow. Therefore, you want to set the odds so that the bettor has to risk a lot to win a little. Something like -$10 Million.
In this case, “in order to win $100, you must bet $10 Million.” You want to strongly discourage people from taking that bet.
Oppositely, if a bettor wants to bet you that the sun will not rise tomorrow, you as a bookmaker would be eager to take that bet!
Once again, you are fairly confident the sun will rise tomorrow. Therefore, you’d want to set the odds at something like +$10 Million. In this case, “betting $100 wins you $10 Million.” If bettors want to bet against the sun rising tomorrow, you’re happy to take their money!
Remember, also, that oddsmakers will shade their line based on public perception.
Example: Betting on the Color of the Next Car to Pass
If you were to bet on the color of the next car to pass by on the street, there’s no spread you can apply to such a wager. You can’t say, “red car -3.” In this case, oddsmakers will look at the list of possibilities and identify the most likely favorite.
They might set the odds something like this:
- Red Car: +250
- Neon Orange Car: +10000
- Black Car: +125
- None of the Above: -200
What do odds like those imply?
Red Car: we read these odds as, “betting $100 wins you $250.” We think it’s unlikely the next car will be a red car given the wide range of options.
Neon Orange: recognizing that a neon car passing by us next is an incredibly unlikely outcome, we are going to set the odds at a +5000. We read it as, “betting $100 wins you $10,000.” If you think more deeply about this, this means we think 1 in 100 cars is going to be neon orange.
Black Car: these odds at +125 read as, “betting $100 wins you $125.” They tell us that oddsmakers think a black car is more likely that a red or neon orange car, but still less likely than the range of other options.
None of the Above: setting our odds at -200, reading it as “in order to win $100, you must bet $200.” This recognizes that none of the above is probably the most likely outcome.