In the world of sports betting, the term vig or vigorish refers to the commission or fee charged by the sportsbook on each wager placed by a player. This is the main source of how a bookie will generate their revenue. Knowing how exactly you earn from betting is one of the more important aspects in the guide to starting a sportsbook.
The vig is typically shown as a percentage of the total amount of the wager and is built into the odds offered by the sportsbook. It ensures that the sportsbook maintains a profit margin regardless of the outcome of the event. The vigorish is basically the price paid by the bettor for the opportunity to place a wager. The inclusion of this in the odds is part of what you get from a pay per head software.
Vig in a Sportsbook: How a Bookie Earns
For example, let us say that your sportsbook offers odds of -110 on a specific baseball game. In this scenario, the player must bet $110 to win $100. If the bet made by the player wins, the bettor receives their original wager of $110 back, plus the $100 in winnings. However, if the bet loses, the sportsbook keeps the entire $110.
The vig, in the simplest definition, marks the difference between the true odds and the odds offered by your sportsbook. You, or your sportsbook pay per head software adjusts the odds in such a way that you will have an advantage. This advantage is known as the “house edge” or “bookie’s edge”. It is because of this that you can earn a lot from sports betting.
And since the vig is charged per bet, you can potentially earn multiple times from one player. And if you are using a pay per head software, you only get charged for the whole week, regardless of how many wagers placed. This means you can easily recoup the pay per head cost of your player in just one bet, and the rest you get to keep as profit.
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