Juice (or vig) is the amount charged by a bookmaker for taking a gamblers bet. This built-in edge helps sportsbooks make a profit. Depending on the type of bet, the commission that a book charges can vary.
Last week we taught you how to calculate implied probabilities. This week we are going a step further and removing the juice.
With football on the horizon, let’s use an example from the upcoming season to learn how to remove juice.
The Green Bay Packers have arguably the best quarterback in football and are a fixture in the postseason. The Cheeseheads are tied with the New England Patriots for the longest active playoff streak (seven straight years).
It is no surprise then that the Packers are big favorites to make the playoffs in 2016.
Will the Green Bay Packers make the playoffs?
- Yes: -500
- No: +350
Note: Prop courtesy of Bovada.lv.
So how likely is Green Bay to return to the postseason? To answer that question we will remove the juice from the prop bet to get “true” odds.
The first step is to calculate the implied probability of each bet. For “Yes” the implied odds = 500/(500+100), which is 83.3%. For “No” the implied odds = 100/(350 +100), which is 22.2%. If you add those up you get 105.5%. Why are the probabilities greater than 100%? That is the juice the bookmakers add to the bet.
To remove the juice we then need to divide each implied probability by the summed percentage (105.5%). So “Yes” becomes 83.3/105.5 = 79.0% and “No” becomes 22.2/105.5 = 21.0%. Now the combined total is 100%, which means the vig has been removed.
According to the odds, with the juice removed, the Packers have a 79.0% chance to make the playoffs.
Understanding implied probabilities and knowing how to remove the juice from bets gives you a better understanding of the betting market. These are the fundamental building blocks of becoming a sharp bettor.