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CRASH COURSE IN VIGORISH Who
Pays?...How Much? /// Chances are, if you ask
several different sports bettors what percentage they pay their bookmakers you'll
get several different answers, and, chances are, most of those answers will
not be ringing with confident finality. Even battleworn veterans who flatly
answer "Fourandahalf percent" are really operating with
a false understanding of what's going on. Contrary to what many veteran
gamblers believe, almost no one actually pays 4.55% in bookmakers'
commissions. Many
bettors are also operating under the fallacy that losers pay vigorish. The
fact is  as explained below  losing bettors actually play for free. Only
winners pay vigorish...And it's not 4.55 percent.
The
bookmaker's rather unique commission has no precise English definition, but
the French word for it is "vignes."
American gamblers have long since converted "vignes"
to "vigorish," or to just plain
"vig." Nevertheless, the bookmaker's fee is as much a commission as
a broker's fee for handling a stock transaction or a Realtor's fee for
handling a real estate deal. To account for this commission on standard
pointspread wagers at traditional bookmakers, for every $10 a bettor wants to
win he is required to risk $11  to "lay" $11. (Many internet
bookmakers now charge less, allowing bettors to risk as little as 10.5 to win
10, but for our purposes here we will use '1110' bets.) These 'eleventen'
bets lead many gamblers to conclude that they are paying the bookmaker a
commission of 10 percent if they lose a bet, but that they pay nothing if
they win. That's
not correct. Here's how it actually works: Say two bettors each risk $110
with the same bookmaker on opposite sides of the same proposition, each
bettor trying to win $100: The bookmaker receives a total of $220 from the
two bettors. One bettor wins, one bettor loses, and the winner picks up a
total of $210;  the $110 he put at risk, plus his $100 profit. That leaves
the bookmaker with $10 gross profit as his vigorish on the deal. The
bookmaker kept $10 of the $220 total amount risked. That's
a service charge of 4.55 percent. Had the two bettors each risked $110
against the other without using the services of the bookmaker, the winner
would have walked away with $220 instead of $210.
The bookmaker kept 4.55 percent of that $220. The amount risked by each
bettor was $110; not 100 dollars. ($10 divided by $220 = .0455) So
the bookmaker does, indeed, charge 4.55 percent of the total amount put at
risk by both bettors...But be sure to note which bettor paid both bettors'
share of the vigorish. It was not the loser. The loser  since he lost the
bet  would have lost whatever he put at risk, with or without the services
of the bookmaker. The winner paid. The winnings, which would have been $110
without using the services of the bookmaker, were shorted by ten dollars 
9.1 percent. ($10 divided by $110 = .090909091) The
winner got back only 191 percent of the amount he put at risk. ($110 x 1.90909091 = $210) This
is also the way it works in virtually all other casino games, such as craps,
roulette, baccarrat, blackjack, and even slot
machines. When a loser loses, he loses what he puts at risk, of course. In
roulette, for example, someone betting on an 'evenmoney' proposition (red or
black, high or low, odd or even) and losing, loses his bet, whatever he
risked, period. But someone winning an 'evenmoney'
roulette proposition does not get paid the 'fair' odds of 10to9. (There are
20 ways to lose an evenmoney bet at roulette and only 18 ways to win. The
odds are 109 against you.) The winner only gets paid 1to1 odds. In all
these table games, the winner pays the vigorish. Of
course, in a larger, more philosophical sense losers not only pay the
vigorish but also the light bills of the casino and the salaries of the
casino employees and all the other expenses of the casino. But we're not
addressing philosophy here. We're addressing how the business of gambling
actually 'works'. This is no place to play with words and semantics. Vigorish
is deducted from winnings. It
is important to understand this point. You can be sure most bettors don't. In
effect, the bookmaker becomes a partner of the winning bettor. Understanding
this point is important when figuring the real cost of various sports betting
opportunities, including parlays. (See our article, Parlays & Profit.) For example, laying 12to10 is a oneway
ticket to the poorhouse. Laying 12 to win 10 costs the winner a whopping
16.67% of his winnings. The
illustration accompanying this text (above) shows precisely the cost of
vigorish when dealing with 1110 bets. Notice that since the winning bettor
is always charged for the vigorish, the higher the percentage of bets won,
the higher the percentage of vigorish paid. It might help if you picture what
happens this way: If you lost all 100 of 100 bets, you would lose 100 percent
of the amount put at risk  with or without the services of a bookmaker  but
if you won all 100 of 100 bets, you would win only 91 percent of the total
amount you were required to risk. In those two extreme cases, the 0100 loser
would have played for 'free' while the 1000 winner would have paid more than
9 percent in vigorish. Notice also that even though the bookmaker's
commission is 4.55 percent, it is only the bettor who wins exactly half his
bets who pays precisely 4.55 percent in vigorish. Everybody else pays
something different. In order to break even you must win 53 percent of your
bets  assuming the sizes of all your bets are exactly the same  and in
order to win 53 percent of your bets, you must pay 4.82 percent in vigorish.
Successful sports bettors who win more than 55 percent of their 1110 bets
typically pay more than 5 percent in vigorish. Related articles: /// 



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How Professional Gamblers Beat the Pro Football
Pointspread 
How to Profit from Parlays 
Successful Gamblers 
Insights Into Sports Betting 
Revelations in Sports Betting 
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