By Matt Chaprales
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 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 most bettors are unprofitable long term.
The math behind juice is simple — and critical for all bettors to understand.
Consider a football game with the Patriots as 3.5-point favorites 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.
This means a bet theoretically even in probability (for instance, 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 each transaction (or 10/110).
From bookmakers’ 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. The higher the juice, the higher the break-even win rate becomes:
— Bettors taking juice of -105 need to win 51.2% of their bets to profit long term.
— Bettors taking juice of -110 need to win 52.4% of their bets to profit long term.
— Bettors taking juice of -120 need to win 54.6% of their bets to profit long term.
— 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 previous example, taking the Chiefs 3.5 at -110 may have value, but taking the same team and the 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, in which 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.
Matt Chaprales is the head of content for PointsBet.