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What is Juice in Sports Betting? (July 2024)

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Have you ever wondered how sportsbooks make their money? Apart from the obvious fact that they keep the money staked on lost bets. Well, for every bet the sportsbook does charge a small fee, but you probably never noticed it. This is what is called the juice, or vig. All sportsbooks use juice, and that is how sportsbooks can make their money and keep operating.

How Sportsbooks Make Their Cut

The place to look for juice is in the odds offered on each bet. The easiest way of explaining juice is to take the example of a simple coin flip. Each round will either end with a heads or tails, and the chances of landing either is 50:50. However, the sportsbook will never offer even money on a bet for heads or tails, but instead it may offer odds 1.9 on either bet. Now, let's say that you bet on heads for 10 rounds and you win 5 rounds. If you bet $1 each round then at the end you will have spent $10 and only won $9.5. Even though you won every other round, which is completely in line with the probability of coin flipping, you will still be at a loss. The remaining $0.5 becomes the sportsbook's juice.

Over a few rounds, it may be marginally small, but after thousands of bets from lots of bettors, the sportsbook can pick up a massive profit.

Odds and Probability

The coin-flipping example is simple to grasp and with point spreads you can easily see the juice through the odds given. For example, there may be an NBA game between the LA Lakers and the Golden State Warriors and the odds may look like this:

  • LA Lakers -5.5 odds 1.9
  • Golden State Warriors +5.5 odds 1.9

With point spreads, the sportsbook gives the most evenly-balanced odds on either team. These bets will never offer even money as the sportsbook would not make any theoretical profit. To calculate the exact juice, you will need to calculate the implied probability of both teams. When the implied probabilities on both bets are added together, the number will be over 100%. The surplus is the house edge. Implied probability can be calculated with the following formula:

(1 / odds) x 100

For both bets above, this would come to (1 / 1.9) x 100 = 52.63%. If you add the two IPs together, you get 105.26% and the 5.26% is the house's edge. You can also apply the same formula to the moneylines, where the odds are not as evenly balanced. Taking the same game, let's say that the odds on either team to win are:

  • LA Lakers 2.65
  • Golden State Warriors 1.5

The implied probability of the Lakers to win is 37.73% and for the Warriors, it is 66.67%. Added together, the house edge is 4%.

Three-Way Bets

Calculating the juice in two-way bets is not difficult, and applying the same logic you can also find the juice for three-way bets and bets with more than three options. Football is a highly popular sport for bettors, and matches have three possible outcomes. For example, if Chelsea plays against Arsenal then the match can end with either team winning or in a draw.

  • Arsenal winning 2.1
  • Chelsea winning 3.5
  • Draw 3.4

Arsenal is the favourite to win this game, and its IP is 47.62%. Chelsea has a 28.57% IP of winning the match, and the IP of a draw is 29.41%. Added together, the resulting percentage is 105.6%. The juice in this case is 5.6%.

Multiple Possible Outcomes

If you take racing bets, where there can be 10 or even more contestants, there are even more possible outcomes. To keep things simpler, here is a betting market on a race with 10 horses. For the sake of the bet, the horses are called A through J:

  • A odds 15
  • B odds 9
  • C odds 4
  • D odds 4
  • E odds 5.5
  • F odds 13
  • G odds 9
  • H odds 21
  • I odds 26
  • J odds 9

Calculating the IP of each horse, the result is:

  • 6.67% for A
  • 11.11% for B
  • 25% for C
  • 25% for D
  • 18.18% for E
  • 7.69% for F
  • 11.11% for G
  • 4.76% for H
  • 3.84% for I
  • 11.11% for J

The sum of the IPs for all the racers is a whopping 124.74% – making a juice of 24.74%. This is far larger than the juice that is applied to two-way or three-way bets. With horse races and other bets where there are more possible outcomes, you can expect the sportsbook to make a bigger juice. This is not unusual at all and the more the outcomes, the higher you can expect the juice to be.

How to Find Sportsbook with Good Juice

All sportsbooks provide their own odds on sporting events, and the difference between them is usually minimal. However, with some careful research, you will notice that some sportsbooks have a larger juice. Usually, you will not notice a difference in point spreads as the juice is easy to spot. Instead, look at the three-way bets offered and there may be some discrepancies. For example, in a football game between Real Madrid and Barcelona, the first sportsbook may offer:

  • Real Madrid to win 2.87 – 34.84% IP
  • Barcelona to win 2.4 – 41.67% IP
  • Draw 3.4 – 29.41% IP

and the second sportsbook offers slightly different odds:

  • Real Madrid to win 2.6 – 38.46% IP
  • Barcelona to win 2.45 – 40.81% IP
  • Draw 3.3 – 30.3% IP

The added total of the IPs of the first sportsbook is 105.92% – making the juice 5.92%. The second sportsbook has a total IP of 109.57% – making the juice 9.57%. The first sportsbook has a more player-favourable house edge. However, this is only one bet. If you find that generally, the odds are better at the first sportsbook, then you will theoretically have a better chance of turning a profit with them.

Extra Things to Consider

  • Online sportsbooks offer better odds than retail sportsbooks
  • Check out all sports – some may have a lower juice
  • Pregame odds can change, keep an eye on them

Conclusion

Whilst juice is an important thing to consider when picking a sportsbook, it is not catastrophic if a sportsbook takes a large cut. Ultimately, you are making the choices when picking your bets, and the juice is only a theoretical fee. It makes the sportsbook money after hundreds, if not thousands, of bets are placed.

Lloyd is passionate about online gambling, he lives and breathes blackjack and other table games, and he enjoys sports betting.