What is the vig in sports betting?

Vig (short for "vigorish", also called juice) is the operator margin built into every betting line. On a typical -110/-110 spread bet, both sides pay only 90.9 cents per dollar risked. The 9.1 cents differential per side is the vig. Across a balanced book, this nets the operator approximately 4.55% per dollar wagered.

Why is the line -110 instead of even money?

Because -110 is how operators charge you to take a 50/50 bet. If both sides paid even money (+100), and the operator received equal action on each side, the operator would break even. By charging -110 instead, the operator keeps the difference even when action is balanced. The 4.55% margin is profit purely from setting the price below fair value.

How does the operator profit if they take losing bets?

The operator does not need to "predict" winners. As long as betting volume is roughly balanced between the two sides, the vig built into the price guarantees profit. If volume is unbalanced (e.g. 80% of bets on one side), the operator either moves the line to attract balancing action OR accepts inventory risk on that game. Sharp operators are usually balanced; recreational-skewed operators carry more inventory risk.

What is the difference between vig and hold?

Vig is the per-bet operator margin built into individual prices. Hold is the realized operator profit as a percentage of total handle (gross gaming revenue / handle). Vig is theoretical; hold is observed. Hold is typically slightly lower than the implied vig because some bets are partially refunded (push, void), some get bonus credits, etc. US sportsbook hold across the industry averages 7-9% on parlays, 4-6% on straight bets.

Why do sportsbooks offer welcome bonuses if they make money on every bet?

Customer acquisition cost economics. A welcome bonus that costs the operator $200 today is worth it if the customer goes on to bet $5,000-10,000+ in their first 12 months at a 5-7% hold rate. The operator recoups the bonus from house edge accumulated over time. See our /research/promo-erosion-calendar/ for how welcome offers vary by month based on customer acquisition value.

Are some sportsbooks more profitable than others?

Yes. Operators in monopoly states (Florida, New Hampshire, Oregon, Rhode Island) achieve hold percentages 1-2 points higher than competitive markets because there is no competing book to undercut their pricing. Tight-pricing operators like Circa carry lower hold but compete for sharp action. The largest US books (DraftKings, FanDuel) hit hold targets in the 7-9% range; smaller books typically run higher hold to compensate for lower handle volume.

How Sportsbooks Make Money: The Vig Explained

The simplest possible bet: a coin flip

Imagine a coin flip where two players bet against each other. Player A bets $100 on heads. Player B bets $100 on tails. Whoever wins takes $200. Both players have a 50% probability; both expect to break even over time.

Now insert a sportsbook. The book takes both bets. Heads pays -110: bet $110 to win $100. Tails pays -110: bet $110 to win $100. Both players still have 50% probability of winning, but each now risks $110 to win $100.

If heads wins: Player B loses $110. Player A wins $100. The book paid out $100 and collected $110, netting $10 profit (the difference). If tails wins: same math, opposite parties, same $10 profit for the book.

The operator wins $10 every flip regardless of outcome. That $10 on $220 of total handle is a 4.55% margin. This is the vig.

Implied probability vs true probability

A -110 price implies a 52.4% probability (110 / 210). Both sides at -110 sum to 104.8% — but probabilities can't exceed 100%. The 4.8% over 100% is the vig. To convert -110 implied probability back to fair-true probability, divide by 1.048: 52.4% / 1.048 = 50.0% (the actual coin flip).

Use our no-vig calculator to strip vig from any two-sided market.

What if action is unbalanced?

The "balanced book" is a textbook ideal. In practice, books frequently have unbalanced action (e.g. 75% of public action on the favorite). Two responses:

Move the line. Adjust spreads or moneylines to attract bets on the under-bet side until balance is restored.
Accept inventory risk. If sharp action is on one side and the book trusts the sharp pricing, they may ride the imbalance and let the inventory ride.

Sharp operators (Circa, Pinnacle in non-US markets) are willing to ride sharp inventory; recreational-skewed books (DraftKings, FanDuel) move lines aggressively to maintain balance.

Vig vs hold: theoretical vs realized

Vig is the per-bet margin: a number you can calculate from the prices alone. -110/-110 = 4.55% vig.

Hold is the realized operator profit divided by total handle. It is observed after settlement, including:

Pushed bets (returned at no profit)
Voided bets (returned)
Bonus-credit bets (cost the operator vs cash bets)
Cash-out activity (operator captures bid-ask spread)

Hold is usually slightly lower than implied vig. US sportsbook hold percentages average:

Straight spread / total bets: 4-6%
Moneylines (favorite-heavy): 5-7%
Parlays: 7-12%
Same-game parlays: 10-20%+

Why parlays are sportsbook gold

Each parlay leg compounds vig. A 5-leg parlay carries 20-25% effective hold vs ~5% on individual bets. Same-game parlays compound even higher because the operator can quote correlation prices that may not be perfectly hedged. See our parlay strategy guide for the math.

This is why operators heavily promote parlays in app UX, push notifications, and welcome bonuses. Parlay handle has grown from ~10% of total US sports betting in 2018 to ~30%+ today. The growth is mostly hold-positive for the operators.

Welcome bonus economics

If welcome offers cost the operator money, why offer them?

Customer Lifetime Value (LTV). A new bettor at a major US operator typically bets $4,000-12,000 in their first 12 months. At a 5-7% hold rate, that's $200-840 of operator profit. A $200 welcome bonus that captures a customer who would not have signed up otherwise is +EV for the operator on average.

The math also explains why welcome offers vary by season — operators front-load promo budgets into customer-acquisition windows when LTV is highest. See our promo erosion calendar for the full per-month analysis across 13 operators.

How to identify a high-margin sportsbook

Wider spreads on alternate lines. If alt lines have larger gaps from main, the book is pricing further from fair.
Higher SGP correlation pricing. Books with looser correlation models (often smaller US books) charge more for SGPs.
Slower line movement post-news. Sharper books update lines within minutes; slower books leave stale prices that capture more uninformed action.
Aggressive cash-out spreads. Cash-out is operator-quoted; the spread between fair value and the cash-out price is profit.

Tools to use

Our no-vig calculator strips operator margin from any two-sided market. Our hold calculator computes the implied operator hold from any set of prices.

How Sportsbooks Make Money