Sometimes when you are reading an article on sports wagering, you will come across the term no-vig line. What the hell is that?
When wagering, you bet a certain amount to win a certain amount. Every wager you ever make, you bet so many $$$ to win so many $$$. These are the odds. The standard for most bets against the spread is risking $110 dollars to win $100.
Before we get into the no-vig line, we first need to determine the break even point for the $110 to win $100 wager as mentioned above. What percentage of the time do we need to win that bet to break even? The math is pretty easy, and illustrated below.
Break Even % = Amount Risked / Amount Won then multiply by 100
So... with $110 risked, we stand to win $210 ($110 risked plus the $100 we win)
Break Even % = $110 / $210 then multiply by 100
Break Even % = 52.3%
This is the vig line. The vig is the amount of juice a book makes when holding an equal amount of bets on both sides.
The no-vig line is the actual chance of the event happening. To get this we take both bets and find the break even percentage, or the vig line.
In the above example, since both sides are -110 bets, then both sides have a vig line of 52.3%.
The no vig line equals the vig line of a side divided by the sum of the two vig lines.
So in this case...
No-Vig = 52.3 / (52.3 + 52.3)
No-Vig = 50%
Well, most everyone knew that a -110 wager at a standard book is a 50/50 prop or a coin flip. But what about the Auburn Clemson game tonight? The Money Line (ML) for that game at Nitrogen Sports is as follows:
Auburn +165
Clemson -193
So what are the actual chances of winning for each team as predicted by the sports betting market?
First we calculate the vig line for each team (= Amount Risked / Amount Won):
Auburn = $100 / $265 = 37.7%
Clemson= $193 / $293 = 65.8%
If we add 37.7% and 65.8% we get 103.5%. This 3.5% is the house take or vig.
To get rid of this and get the actual market prediction for each team:
Auburn = 37.7% / 103.5% = 36.4%
Clemson = 65.8% / 103.5% = 63.6%
These are the teams actual chances of winning the game according the to sports betting market. This assumes it is an efficient market.
Now why do we need to determine this number? Why go thru all this trouble? One use is to determine the house take on a contest. Theoretically, playing at houses that have the less take should be beneficial to your bottom line. Houses with less of an edge are more in tune to the market, and usually move before less efficient houses. Knowing which sportsbooks are slow moving can allow you to gain an edge.
This number is also important for modeling. Any Binomial Probability Distribution modeling the no vig line is what you would use. I will delve into that mouthful in a later post about how to use NBA season win totals to predict early season lines. But first I need to pick up the yard before Hurricane Irma hits tomorrow. Stay safe all those in her path, no need to take chances.