Juice. Vigorish. Take. Cut. Vig. The Rake. These are all terms used for the percentage the house takes from a bet, with that tax representing the primary reason why bookmaking is a profitable business.
Vegas shines bright in the desert because of the juice that gaming operators attach to every type of bet -- from football games to horse races to the roulette wheel. However, most bettors don’t understand the concept of juice, which represents part of the explanation why the majority of bettors are not profitable long term.
The math behind juice is simple, and critical for all bettors to understand.
Consider a football game with the Patriots as
0 3.5-point favorite over the Chiefs. Whether bettors want to wager on Patriots -3.5 or Chiefs 3.5, the bet will rarely be offered at even money -- and never on both sides (the 3.5 and -3.5). In most cases, oddsmakers will offer each side at -110.
What this means is a bet that is theoretically even in probability (ex. a coin flip) is offered at -110, meaning bettors have to spend $110 to win $100.
That $10 on the $100 bet is the “juice,” with
bookies essentially taking a little over 9% on
(or 10 / 110).
From a bookmaking perspective, the theory is that if they run a perfectly balanced book offering a vig of 9%, they will make a profit of 9%.
For bettors, this means they have to win at more than 50% on what are essentially even-money propositions to be profitable bettors.
The higher the juice, the higher the break-even win rate becomes:
5888 Bettors taking juice of -105 need to win 51.2% of their bets to profit long term
5889 Bettors taking juice of -110 need to win 52.4% of their bets to profit long term
5890 Bettors taking juice of -120 need to win
54.6% of their bets to profit long term
5891 Bettors taking juice of -130 need to win
56.5% of their bets to profit long term
Betting without accounting for the juice can be the difference between winning and losing. Smart bettors understand that value derives not only from the number of the spread but the vigorish being taken by the bookmaker.
Using the earlier example, taking the Chiefs 3.5 at -110 may have value, but taking the same team and same number at -130 has less value -- and perhaps no value at all.
Bookmakers go in with an advantage over bettors in every market. It is an advantage, though, that can be overcome. Unlike casino games -- where the rake is constant in every market -- sports bettors and horse bettors can beat the house. One of the first steps to doing so is by being aware of the juice the bookmakers take and knowing you have to win more to succeed in the long run.