Vigorish

Vigorish, or simply the vig, also known as juice, under-juice, the cut or the take, is the amount charged by a bookmaker, or bookie, for taking a bet from a gambler. In the United States, it also means the interest on a shark's loan. The term originates from the Russian word for winnings, выигрыш vyigrysh. Bookmakers use this practice to make money on their wagers regardless of the outcome. To minimize their risk, some bookmakers do not want to have an interest in either side winning in a given sporting event. Instead, they are interested in getting equal betting on both outcomes of the event. In this way, the bookmaker minimizes his risk and always collects a small commission from the vigorish. The bookmaker will normally adjust the odds or the line. The concept is also sometimes referred to as the overround, although this is technically different, being the percentage the event book is above 100%, whereas the vigorish is the bookmaker's percentage profit on the total stakes made on the event. For example, 20% overround is vigorish of 16%. The connecting formulae are and where o is the overround.