Vig
The vig is the commission a sportsbook builds into its odds so that the prices for a market add up to more than 100%, giving the book its margin.
Definition
Vig (short for "vigorish," and also called juice, margin, or the cut) is the gap between the true odds of an outcome and the shorter odds a bookmaker actually offers. Because every selection is priced slightly worse than fair, the implied probabilities across a market sum to more than 100%; that surplus, the overround, is where the book's built-in edge sits. On perfectly balanced action a sportsbook keeps a fixed slice of total stakes as the vig regardless of the result, which is why bettors have to win at a rate above the break-even threshold to come out ahead over time. In practice the terms vig, margin, overround, and hold overlap but are calculated slightly differently, so they should not be treated as interchangeable numbers.
Worked example
Take a two-way market priced at -110 on each side (1.909 in decimal). Fair odds for a true coin-flip would be +100/+100 — 50% each, summing to 100%. At -110, each side implies 52.38%, so the two prices sum to 104.76%; the extra 4.76% is the overround. In cash terms, if $110 is staked on each side the book takes in $220 and pays the winner $210 ($110 stake returned plus $100 profit), keeping $10 — about 4.55% of all money wagered ($10 / $220). That retained 4.55% is the vig, and it means a bettor must win roughly 52.4% of -110 bets just to break even, before any long-run edge is possible.
Why it matters
The vig is the mechanism by which sportsbooks earn revenue and the main reason betting carries a negative expected return on average — the price is set so the book, not the bettor, holds the mathematical edge. Understanding it lets a learner convert posted odds into implied probabilities, see why -110 pricing requires a ~52.4% win rate to break even, and compare how much a book charges across markets and operators (line shopping). For professionals it underpins pricing, trading, and hold-percentage targets; for players it reinforces that betting is entertainment with a built-in cost, not a source of income.
Related
Note: Core concept is stable, but terminology is used loosely and varies by market: "vig," "juice," "margin," "overround," and "hold" overlap and are applied differently in US versus UK/European usage. The common "10% vig" shorthand for -110 pricing (the extra $10 per $100 risked) is not the same figure as the theoretical hold (~4.55% of total stakes), though both describe the same odds — worth stating explicitly to avoid confusion. Realized hold also differs from theoretical hold because action is rarely perfectly balanced, and margins vary widely by sport, market depth, and operator.