đ§Ș Lab Notes #3 â The Vig: The Tax You Didnât Know You Were Paying
âSportsbooks arenât built on losers â theyâre built on almost winners.â
If you skipped Labs 1 and 2, youâre basically walking into the casino mid-heist.
đ Start here â The Secret Life of Odds
Youâve survived the first two Labs.
You know what odds mean (Lab 1) and how to translate them into real-world percentages (Lab 2).
Which means youâre finally ready for the gut punch:
You can be right half the time and still lose money.
Not a little â Iâm talking âwhy is my FanDuel balance behaving like a situationshipâ type losing.
The culprit is the quiet vampire hiding in every line you bet.
Itâs not the refs.
Itâs not bad luck.
Itâs the vig â short for vigorish, long for the houseâs built-in rake disguised as math.
đ” The Hidden Cover Charge
Letâs start simple:
Chiefs â3 (â110) vs 49ers +3 (â110).
Looks even, right? Two sides, same price.
Wrong.
Because when you strip away the neon, the â50/50â is really just a bar tab with hidden fees.
Using the formula from Lab 2:
Probability = Odds / (Odds + 100)
So â110 becomes:
110 / (110 + 100) = 52.4%
Each side = 52.4%.
Add them up:
52.4 + 52.4 = 104.8%
Problem: there is only 100% of reality available.
That extra 4.8%?
Thatâs the vig â the invisible tollbooth you pay before the game even starts.
Itâs the house skimming fries off your plate before the burger even hits the table.
đ§Ÿ The House Always Gets Paid
Hereâs what actually happens:
Two bettors each put up $110 â one on each side.
The loser loses $110.
The winner wins $100.
The book takes in $220, pays out $210, and pockets $10 for existing.
Thatâs a 4.5% profit margin without caring who wins.
Theyâre not rooting against you â theyâre rooting for volume.
Sportsbooks donât need you to be awful.
They just need you to be slightly worse than fair.
And because the average bettor is exactly that, the lights stay on forever.
đ§ True Odds vs. Offered Odds
If a game were truly 50/50, fair odds would be +100 â bet $100, win $100, clean handshake.
But thatâs not what you get.
You get â110.
Thatâs the book saying:
âSure, flip your coin⊠but if it lands your way, weâre keeping nine cents on the dollar.â
That tiny haircut is how the house stays fresh while you go bald.
Itâs how you can go 10â10 on your picks and still feel like youâre sprinting in place on a treadmill built out of broken dreams.
Youâre not betting against the opponent â
youâre betting against the price.
And the price is tilted just enough to drain you slowly and politely.
đ§ The ATM Analogy
Think of the vig like the sportsbookâs ATM fee.
You walk up, just trying to use your own money.
They smile, hand it over⊠and quietly charge you $3.75 for the privilege.
You donât notice the first time.
You definitely notice the 400th.
Thatâs the vig â the transaction tax on every wager.
And unlike your bank, this ATM never runs out of cash.
đ Why So Few People Beat It
At â110, the break-even point is 52.38%.
Meaning:
You can be right 50% of the time and still lose.
You can go 51â52% for a whole season and still owe the house rent.
For example:
If you fire 1,000 bets at â110:
Win 500 â profit $50,000
Lose 500 â lose $55,000
Net: â$5,000
Not for being bad.
Not for being unlucky.
But for being average.
The vig doesnât crush you all at once â it bleeds you in slow motion.
Like a casino IV drip: steady, comfortable, and quietly draining your soul.
Statistically, fewer than 3% of bettors beat the vig long-term.
The other 97%?
Theyâre just paying the ATM fee forever.
Itâs not emotional.
Itâs arithmetic.
đ The Big Lesson
The vig is why sports betting isnât a coin flip.
Itâs a coin flip with a convenience charge.
Itâs why line shopping matters.
Itâs why price > pick.
Itâs why the guy who goes 54% looks like a wizard and the guy who goes 50% looks like a clown.
The vig is the treadmill incline that makes âaverageâ a losing strategy.
Beating the game isnât about picking winners â
itâs about paying less for being right.
Thatâs why pros talk about Expected Value (EV) instead of âwinning bets.â
EV measures whether you actually beat the vig or just funded another sportsbook steak dinner.
And very soon, weâre going to build EV together.
For now, remember the truth most bettors never understand:
You donât have to be bad to lose â you just have to be normal.
đ§Ș Next Up
Now that you understand the tax on every ticket, itâs time to understand how that tax moves.
đ Next: Lab Notes #4 â Line Movement: When the Market Talks Back
Before we dissect the Big Three markets (Moneylines, Spreads, Totals) or descend into the chaos of Prop betting⊠you need to understand what happens when the numbers start fighting back.
L.S. signing off âïž
Jared
Lead Scientist â The Prop Laboratory
đ§Ș Lab Glossary: Key Terms from This Lesson
Vig (Vigorish) â The built-in house tax baked into every betting line. The bookâs quiet cut before the game even starts.
Break-Even Percentage â The win rate you must hit just to not lose money at a given price. At â110, that number is 52.38%, not 50%.
True Odds â The clean, vig-free version of a betting line. What the odds should be before the sportsbook adds its surcharge.
Line Shopping â Comparing prices across books to pay the least tax possible. Like checking gas stations, but the fuel is your bankroll.
The French Fry Tax (Prop Lab Slang) â The vig in its truest form: the handful of fries the sportsbook snags off your plate before you even sit down.
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