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Vigorish

Vigorish, or simply “vig“, or “juice“, is the amount charged by a bookmaker for his services. The term is Yiddish slang originating from the Russian word for “winnings,” vyigrysh. The concept is also known as the overround.

Bookmakers use this concept to make money on their wagers regardless of the outcome. Because of the vigorish concept, bookmakers should not have an interest in either side winning in a given sporting event. They are interested, however, in getting equal action on each side of the event. In this way, the bookmaker minimizes their risk and always collects a small commission from the vigorish. The bookmaker will normally adjust the odds (or line) to attract equal action on each side of an event.

A common misconception about vigorish is that the loser pays it. Win or lose, all players pay the same commission to the bookmakers. This is figured into all bets beforehand, as illustrated below.

Example

Let’s say two people want to bet on opposing sides of an event with even odds. They are going to make the bet between each other without using the services of a bookmaker. Each person is willing to risk $100 to win $100. After each person pays their $100, there is a total of $200 in the pot. The person who loses receives nothing and the winner receives the full $200.

By contrast, when using a sportsbook, each person must risk or “lay” $110 to win $100. The $10 is, in effect, a bookmaker’s commission for taking the action. This $10 is not “in play” and cannot be doubled by the winning bettor. It can only be lost. A losing bettor simply loses his $110. A winning bettor wins back his original $110, plus his $100 winnings, for a total of $210.

Debate

Since the winning bettor got his full $110 wager back, plus $100 in winnings, many observers will assert that only the losing bettor paid the vigorish. Others would attest that the winner – who had risked $110 and only received $210 in the end, instead of doubling his money to $220 – is the only bettor who paid the vig. Since both bettors lay $110 to win $100, both are paying the vig.

Other kinds of vigorish

  • In table poker, the vigorish, more commonly called the rake, is a fraction of each bet placed into the pot. The dealer removes the rake from the pot after each bet (or betting round), making change if necessary. The winner of the hand gets the money that remains in the pot after the rake has been removed.
  • In the house-banked version of baccarat (also mini-baccarat) commonly played in North American casinos, vigorish refers to the 5% commission charged to players who win a bet on the “banker” hand. The rules of the game are structured so that the “banker” hand wins slightly more often then the “player” hand; the 5% vigorish restores the house advantage to the casino for both bets. In most casinos, a winning banker bet is paid at even money, with a running count of the commission owed kept by special markers in a “commission box” in front of the dealer. This commission must be paid when all the cards are dealt from the shoe or when the player leaves the game. Some casinos don’t keep a running commission amount, and instead withdraw the commission directly from the winnings; a few require the commission to be posted along with the bet, in a separate space on the table.
  • In pai gow poker, a 5% commission charged on all winning bets is referred to as vigorish. Unlike bacarat, the commission is paid after each winning bet, either by the player handing in the amount from his stack of chips, or by having the “vig” deducted the winnings. Pai gow poker is an even game, without any built-in advantage for “the house”; the commission restores the advantage.
  • In craps, vigorish refers to the 5% commission charged on a “buy” bet, where a player wished to bet that one of “the numbers” — 4, 5, 6, 8, 9 or 10 — will be rolled before a 7 is rolled. The commission is charged at the rate of $1 for every $20 bet. The bet is paid off at the true mathematical odds, but the 5% commission is paid as well, restoring the house advantage. For many years, this commission was paid whether the bet won or not. In recent years, many casinos have changed to charging the commission only when the bet wins, which greatly reduces the house advantage; for instance, the house advantage on a buy bet on the 4 or 10 is reduced from 5% to 1.67%, since the bet wins one-third of the time (2:1 odds against). In this case, the vig may be deducted from the winnings (for instance, a $20 bet on the 4 would be paid $39 — $40 at 2:1 odds, less the $1 commission), or the player may simply hand the commission in and receive the full payout. This rule is commonplace in Mississippi casinos, and becoming more widely available in Nevada.
  • Vig may generically refer to the built-in house advantage on most bets on any game in a casino.
  • Vig also refers to the interest a loan shark charges.

References

  • DragonBets: Vigorish Explained

Links

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

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