The vig is the guaranteed profit that the bookmaker will make provided that the prices offered attract wagers on all outcomes in the desired proportions more on which later. Overround is a related - and often conflated - term and is defined as the sum of the reciprocals of all prices in a given market. Some definitions of overround subtract 1 from this sum, mainly because it makes the maths a little simpler in some areas.
Note that here, in both equations, I've used the definition of overround that does not subtract 1. From a punter's viewpoint, betting markets with lower overround and lower vig are to be preferred as they offer higher rewards for a given level of skill or luck. Incidentally, the two proportions used above to determine the desired amount to be wagered on each team from a bookmaker's viewpoint are also a measure of a team's implicit probability of victory.
To convince ourselves that the relationship between overround and vig holds for markets where more than 2 outcomes are possible let's consider the following, more complex, margin market. From the bookmaker's viewpoint, the optimal wagering proportions are, again, the reciprocal of the price of the relevant bet multiplied by the overround, which gives:. The return to the bookmaker therefore is If you perform this same calculation for the other possible outcomes you should come up with the same net profit.
To reiterate then, a market with an overround of o will produce a guaranteed profit of v for a bookmaker provided that the wagers on each outcome are ideally apportioned. If you enjoy the content here, please consider making a donation. Any amount is appreciated. Click on the envelope. I can be contacted via Tony. Corke gmail. What Is Vig and Overround? What is Vig and Overround? NB: I wrote another post on this topic in , though there I use the alternative definition of overround Bookmakers are business people and the prices they offer include a profit margin, which is sometimes referred to as the 'vig' or 'vigorish' in the prices they offer.
Competition drives vig down. But why does it matter? You see, if you want to win over the longer-term, you have to bet at a value price. The complete opposite of what the bookmakers are doing. To do this, you will need to find odds that are larger than their probable chance of happening. For example, you want to be betting on a horse at 7. When you think about it logically. Like everything else in life, you need to be getting some value.
There are several ways of doing this, but the easiest has to be through matched betting, fully explained here. The quickest way to see if you are likely to lose is through looking at the books over-round. A prime example would be the Grand National in April. Bookmakers always drastically increase their over-round for this, because they know people will bet on it anyway. Aside from calculating the over-round figures yourself, some places list them.
You used to be able to see all the bookmakers over-round percentages in comparison on places like the racing post and odds-checker. However, they seem to have been removed recently. The over-round is a great way of separating an invaluable market from others on offer. In truth, the use of betting over-rounds beyond simplistic value identification is for betting odds traders and the like.
Slightly more complex, although not impossible to crack. Before you go, we would like to know: Was this article of use to you? Would you like more like it? Your email address will not be published. Log In Register. Wondering what the over-round means in betting? How do betting odds work?
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NB: I wrote another post on this topic in , though there I use the alternative definition of overround. Bookmakers are business people and the prices they offer include a profit margin, which is sometimes referred to as the 'vig' or 'vigorish' in the prices they offer. The vig is the guaranteed profit that the bookmaker will make provided that the prices offered attract wagers on all outcomes in the desired proportions more on which later. Overround is a related - and often conflated - term and is defined as the sum of the reciprocals of all prices in a given market.
Some definitions of overround subtract 1 from this sum, mainly because it makes the maths a little simpler in some areas. Note that here, in both equations, I've used the definition of overround that does not subtract 1. From a punter's viewpoint, betting markets with lower overround and lower vig are to be preferred as they offer higher rewards for a given level of skill or luck. Incidentally, the two proportions used above to determine the desired amount to be wagered on each team from a bookmaker's viewpoint are also a measure of a team's implicit probability of victory.
To convince ourselves that the relationship between overround and vig holds for markets where more than 2 outcomes are possible let's consider the following, more complex, margin market. From the bookmaker's viewpoint, the optimal wagering proportions are, again, the reciprocal of the price of the relevant bet multiplied by the overround, which gives:.
The return to the bookmaker therefore is If you perform this same calculation for the other possible outcomes you should come up with the same net profit. To reiterate then, a market with an overround of o will produce a guaranteed profit of v for a bookmaker provided that the wagers on each outcome are ideally apportioned.
If you enjoy the content here, please consider making a donation. Any amount is appreciated. Click on the envelope. I can be contacted via Tony. Corke gmail. What Is Vig and Overround? What is Vig and Overround? In a fair book in each of their matches, i. However, a bookmaker would probably offer odds of for example on each of the two possible outcomes in each event each tennis match.
This results in a book for each of the tennis matches of The decimal odds of a multiple bet is often calculated by multiplying the decimal odds of the individual bets, the idea being that if the events are independent then the implied probability should be the product of the implied probabilities of the individual bets. This represents an implied probability of Thus the overround has slightly more than doubled by combining two single bets into a double.
This is why bookmakers offer bets such as Lucky 15 , Lucky 31 and Lucky 63 ; offering double the odds for one winner and increasing percentage bonuses for two, three and more winners. In general, for any accumulator bet from two to i selections, the combined percentage overround of books of B 1 , B 2 , In settling winning bets either decimal odds are used or one is added to the fractional odds: this is to include the stake in the return. The place part of each-way bets is calculated separately from the win part; the method is identical but the odds are reduced by whatever the place factor is for the particular event see Accumulator below for detailed example.
All bets are taken as 'win' bets unless 'each-way' is specifically stated. Non-runners are treated as winners with fractional odds of zero decimal odds of 1. Fractions of pence in total winnings are invariably rounded down by bookmakers to the nearest penny below. Calculations below for multiple-bet wagers result in totals being shown for the separate categories e. Each-Way multiple bets are usually settled using a default " Win to Win, Place to Place " method, meaning that the bet consists of a win accumulator and a separate place accumulator Note: a double or treble is an accumulator with 2 or 3 selections respectively.
However, a more uncommon way of settling these type of bets is " Each-Way all Each-Way " known as " Equally Divided ", which must normally be requested as such on the betting slip in which the returns from one selection in the accumulator are split to form an equal-stake each-way bet on the next selection and so on until all selections have been used. Double  .
Note: " Win to Win, Place to Place " will always provide a greater return if all selections win, whereas " Each-Way all Each-Way " provides greater compensation if one selection is a loser as each of the other winners provide a greater amount of place money for subsequent selections.
Treble  . Accumulator  . Note: 'All up to win' means there are insufficient participants in the event for place odds to be given e. The only 'place' therefore is first place, for which the win odds are given. Trixie , Yankee , Canadian , Heinz , Super Heinz and Goliath form a family of bets known as full cover bets which have all possible multiples present. Examples of winning Trixie and Yankee bets have been shown above. The other named bets are calculated in a similar way by looking at all the possible combinations of selections in their multiples.
Note: A Double may be thought of as a full cover bet with only two selections. Should a selection in one of these bets not win, then the remaining winners are treated as being a wholly successful bet on the next 'family member' down. For example, only two winners out of three in a Trixie means the bet is settled as a double; only four winners out of five in a Canadian means it is settled as a Yankee ; only five winners out of eight in a Goliath means it is settled as a Canadian.
The place part of each-way bets is calculated separately using reduced place odds. Thus, an each-way Super Heinz on seven horses with three winners and a further two placed horses is settled as a win Trixie and a place Canadian.
Virtually all bookmakers use computer software for ease, speed and accuracy of calculation for the settling of multiples bets. Patent , Lucky 15 , Lucky 31 , Lucky 63 and higher Lucky bets form a family of bets known as full cover bets with singles which have all possible multiples present together with single bets on all selections.
An examples of a winning Patent bet has been shown above. The other named bets are calculated in a similar way by looking at all the possible combinations of selections in their multiples and singles. For example, only two winners out of three in a Patent means the bet is settled as a double and two singles; only three winners out of four in a Lucky 15 means it is settled as a Patent ; only four winners out of six in a Lucky 63 means it is settled as a Lucky Thus, an each-way Lucky 63 on six horses with three winners and a further two placed horses is settled as a win Patent and a place Lucky The overall 'odds multiplier' is a combined decimal odds value and is the result of all the individual bets that make up a full cover bet, including singles if needed.
This is equivalent to the OM for a Patent treble: abc ; doubles: ab , ac and bc ; singles: a , b and c plus 1. Now multiply by the unit stake to get the total return on the bet. The winning Patent described earlier can be more quickly and simply evaluated by the following:. For the family of full cover bets that do not include singles an adjustment to the calculation is made to leave just the doubles, trebles and accumulators.
In effect, the bet has been calculated as a Lucky 15 minus the singles. In the days before software became available for use by bookmakers and those settling bets in Licensed Betting Offices LBOs this method was virtually de rigueur for saving time and avoiding the multiple repetitious calculations necessary in settling bets of the full cover type. A Round Robin with 3 winners is calculated as a Trixie plus three Up and Down bets with 2 winners in each. A Round Robin with 2 winners is calculated as a double plus one Up and Down bet with 2 winners plus two Up and Down bets with 1 winner in each.
Flag and Super Flag bets may be calculated in a similar manner as above using the appropriate full cover bet if sufficient winners together with the required number of 2 winner- and 1 winner Up and Down bets.