The vig — short for vigorish, and also called the margin, overround or juice — is the profit a bookmaker builds directly into its odds. It is the reason that, in traditional betting, the house has an edge before a single event is decided. Understanding it explains a lot about why prediction-market exchanges price differently, and why comparing a sportsbook line to an event contract is not quite like-for-like. This concept underpins both implied probability and no-vig fair odds.
What the vig is
When a bookmaker sets odds on a two-sided event, it shades both prices slightly against the bettor so that the implied probabilities of the outcomes sum to more than 100%. That excess — the overround — is the vig. If both sides of a coin-flip market were priced at a true 50%, the book would break even; by pricing each side at, say, 52.5% instead, it bakes in a 5% margin regardless of which way the event falls. The vig is how the house guarantees a long-run edge without needing to predict outcomes.
Spotting it in the odds
The tell is always the same: convert both sides to implied probabilities and add them up. Suppose one outcome is priced at an implied 55% and the other at 52%. Together they total 107%, so the overround is about seven percentage points — that is the vig on this market. The bigger the total above 100%, the more margin is built in, and the worse the effective price for the bettor. On heavily juiced markets the overround can be substantial; on competitive ones it is slimmer, but it is essentially never zero at a traditional book.
How prediction-market exchanges differ
A prediction market is an exchange, not a bookmaker: you trade against other participants, and the platform matches you and takes a fee rather than setting a margin. As a result, the two sides of an event-contract market sit much closer to 100% — the price reflects supply and demand rather than a shaded line. You still pay a cost, but it is an explicit, visible fee rather than a hidden spread, which usually makes it smaller and always makes it easier to measure. That transparency is one of the format’s genuine advantages.
What it costs you
The vig is a recurring tax on every bet, and it compounds. Even a modest overround means you must win more often than the raw odds suggest simply to break even, and over hundreds of bets that gap is what quietly erodes a bankroll. This is why sharp bettors obsess over paying the lowest margin they can find, and why an explicit exchange fee — which you can calculate exactly with a fee calculator — is often preferable to a hidden one you have to reverse-engineer.
Removing the vig
Because the vig inflates the implied probabilities, the raw numbers are not the market’s honest estimate of what will happen. To recover that estimate you strip the margin out proportionally, producing no-vig fair odds — the fair probability the odds imply once the house edge is removed. That is the number you actually want when comparing a sportsbook line to a prediction-market price, or when judging whether a market offers positive expected value.
Frequently asked questions
What does the vig mean in betting?
The vig (vigorish, or margin) is the profit a bookmaker builds into its odds by shading both sides so the implied probabilities sum to more than 100%. That excess, the overround, is the house edge — it guarantees the book a long-run profit regardless of the outcome.
How do you calculate the vig on a market?
Convert both sides to implied probabilities and add them. If one side implies 55% and the other 52%, the total is 107%, so the overround is about 7 percentage points. The amount above 100% is the vig; the higher it is, the worse the price for the bettor.
Do prediction markets have a vig?
Much less of one. A prediction market is an exchange where you trade against other users, so the two sides sit close to 100% and you pay an explicit, visible fee rather than a margin hidden in the price. That usually makes the cost smaller and always makes it easier to measure.