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Why do LA's money/run/picks lines reflect vig?

Casinos do not offer ‘fair’ odds, in the sense that their odds are in some way attached to a tilted payoff in favor of the casino.  That of course, is how they stay in business. How that ‘vig’ is attached may be in the amount one must put up, for instance choosing either side of a 3 point spread line, putting up $110 dollars in an effort to make $100. Or it may be represented simply by a difference in money, as it is for money/run/puck lines.  You may have to lay -140 to win 100, and on the other side you put up 100 to make 120.  The difference, 20 cents in this instance, is just another representation of vig. 

Because some bettors are unaware of how to factor the vig component of the line differential as a percentage, they may be left wondering what the actual vig implied by the line money spread is.  In lower scoring games like baseball or hockey, that vig may be as obvious as the cents difference between the favorite and dog sides of the money.  But understanding the shape of the vig as the odds get steeper is more difficult.  Therefore LineAdvisor seeks to make estimating what is and isn’t fair vig easier for our Service subscribers, by always showing our “fair” odds projection on the ‘lay’ side, and implying 20 cents of vig on the ‘take’ side.  In this way, by simply looking at the money differential in dollars between the lay and take side of the LineAdvisor line, bettors can at least get a sense of whether the odds they see are offered at greater or less than 20 cents implied.

 

There are three important things to note here:

1.       The technical term for the differential between fair odds and odds reflecting the house take, or vig, is “over-round.”  Said differently, the percentage odds implied in lines which reflect vig will always add up to greater than 100%, with the additional amount over 100% being the over-round.  Here is an example of how it’s calculated:

-120 = $100 bet + $20 vig

So,  120 / 220 = .545454545

(.545454545 - .50) / 2 = .022727272 

Meaning the over-round amounts to 2.272%.

 

2.                           OK, so now you know what the over-round is.  But there is one more complicating factor.  As the odds move closer to even, the same $20 (or “20 cents” per dollar, if you prefer to speak of it that way) represents a larger percentage over-round.  So books targeting a 20-cent vig would typically factor the over-round to be the greater of 2.272% or whatever percentage would make the money spread 20 cents.  This is why you will notice the money spread is much wider as the odds get more skewed.  They still imply the same over-round, but the money spread becomes very wide as you get further out on the odds curve.

 

Here’s an example:  a money line given as 100/-120, which implies odds of .500/.545 respectively, has an over-round of .500+.545 = 1.045, or 4.5%.

A line which is given as 176/-184 implies odds of .379/.648 respectively, implying an over-round of 1.027, or 2.7%.

Also, a given line of 343/-392, implying .226/.797 respectively, has an over-round of 1.023 or 2.3%. 

 

Therefore, it should now be apparent that even as the over-round begins to drop as a percentage until it reaches a steady 2.27% (as described above, for this 20 cent example), the money spread between the lay and take sides grows larger…49 cents in this last example.

 

By the time you get to extremely skewed odds at the far end of the curve the money difference can be thousands of dollars, even tens of thousands, even as the over-round is still roughly 2.27%.  It should be obvious from these examples, that the larger the over-round the greater the money difference becomes as the odds become more skewed.  This is precisely WHY bettors should shop around when checking casino lines.

 

3.                             The final point of note is to explain our use of the terms “lay” and “take,” and why we did not introduce this idea of vig representation in terms of “favorite” and “underdog.”  This may come as a surprise to novice bettors, but the favorite isn’t always laying, or giving up odds.  Sometimes, the favorite gets paid to take a potential odds payoff.  Conversely, the underdog sometimes must lay money.  How, you wonder?  The answer relates solely to fixed spread bets.  Key examples of these are the run line in baseball, and puck line in hockey.  If the game is fairly close, the favorite may actually ‘get odds’ to lay 1 ½ points.  This is because the game appears to have a fair value which is less than that which the odds of a 1.5 point spread would otherwise imply.  And so, the team which is the favorite to win the game actually is an UNDERDOG to “cover” that 1 ½ point spread, and therefore gets to take the money line.  Conversely, the outright underdog in the game may become the favorite to win with the aid of a 1 ½ point head start, and therefore must lay the money on the run line/puck line, because it’s the FAVORITE with the aid of a 1 ½ point advantage. 

At the other end of this prior example would be a game where one team is hugely favored to win, and is therefore the favorite on the run line as well.  The amount it’s favored by is whatever additional implied odds the books assign to the game beyond 1 ½ points.

 

Complicated?  Well yes, it can seem so.  That’s why you pay US!  LineAdvisor tells you exactly what our projections are for run/puck lines each day, how those compare to the books, and how we recommend bettors act.  And as with ALL our Picks recommendations, they conform not only to our projected analysis, but to our secondary betting logic.