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We have spent time discussing the Vigorish, or "Vig," the invisible tax the sportsbook charges on every wager you place. You know that winning 50 percent of your minus 110 bets means you are losing money.
But understanding the cost of the Vig is only the first step. The second, and more crucial, step is removing the Vig entirely to reveal the underlying truth of the market. This is the ultimate mathematical move that separates the serious investor from the amateur gambler.
This truth is called No-Vig Fair Odds.
If you rely on the odds the sportsbook presents to you, you are looking at a distorted picture. The line is inflated by the house's take. To truly handicap a market you must strip away that fee and determine what the odds would be if the game were truly a 50/50 proposition between you and the bookmaker.
The True Probability Revealed
When a sportsbook sets the odds for a game they price it so that the implied probability of all outcomes combined totals more than 100 percent. This extra percentage is the Vig. It is the house's guaranteed cut.
For example, if the odds are minus 110 on both sides, the combined implied probability is 104.76 percent. The 4.76 percent surplus is the house edge.
When you use the No-Vig Fair Odds calculation you mathematically eliminate that 4.76 percent. This leaves you with the true probability of the outcome.
The Fair Odds calculation is the foundation of identifying Expected Value (EV). You should only compare your own calculated probability of a win to the Fair Odds. Comparing your probability to the raw odds is meaningless because you are comparing apples to apples plus a tax.
The Sharp Bettor’s Language
All professional bettors and sharp syndicates communicate in terms of No-Vig Fair Odds. They do not care that the public line is minus 110. They only care about the fair price.
If a game is truly a coin flip (50 percent chance) the Fair Odds would be plus 100. If the public line is minus 110, the sharp bettor knows there is a gap.
Your Model says: The true probability is 52 percent.
The No-Vig Fair Odds calculation says: The book's implied price is 50 percent.
Since your percentage is higher than the true market percentage you have a confirmed edge. This objective measure of value dictates whether you place a bet or not.
Why You Should Be Calculating This Constantly
Calculating the No-Vig Fair Odds forces discipline in three critical ways.
1. Identifying False Value: Sometimes a high underdog price looks appealing. It looks like plus 200 odds on an underdog is a great deal. However once you remove the Vig you might find that the Fair Odds are actually plus 180. The perceived value disappears because the book was merely overcharging you for a bad bet.
2. Accuracy Check: It serves as a constant check on your own handicapping. If you believe your favorite is worth minus 5 points but the No Vig calculation shows the market actually has them priced at minus 6, you need to go back and audit your model. You are missing something.
3. Line Shopping: The Fair Odds calculation allows you to compare the profitability of every single sportsbook simultaneously. You can instantly see which book is offering a price that is furthest from the fair market value, thereby maximizing your edge.
In our Advanced Value Betting Guide we dedicate an entire section to this fundamental arithmetic. It is the essential skill you must master before you can move on to complex strategies like arbitrage or middling.
Let Us Strip the Tax
Manually calculating the No-Vig Fair Odds for dozens of lines on a Sunday morning is time consuming and prone to error. You need precise conversion to four or five decimal places to accurately remove the house hold.
This is why we provide the No-Vig Fair Odds tool. It instantly removes the tax from the market and gives you the clean, honest probability you need to make an objective decision.
When you start consistently using this tool you will stop seeing the odds as a set of prices and start seeing them as a set of probabilities.
Get True Value Picks that are based on an analysis of the market's fair price, not the house's taxed price.