Futures bets can be some of the most fun ones to sweat. After all, they can come at long odds and represent huge potential payouts.
For a recent example, think back to the inaugural season of the Vegas Golden Knights in the NHL. They opened at +20000 (200-to-1) and then made a surprise run to the Stanley Cup finals. They fell just short, but futures bettors who believed in them got a hell of a sweat. Some of them likely also profited via hedging, but that’s another concept for another time.
In any case, sports betting stories abound about massive payouts on longshot futures. And if you just want to bet for fun and not worry about true probabilities or long-term profit, read no further.
But, if you want to try to make money, or you’re just interested in learning about the true probabilities reflected in multi-way markets, this page will outline some important concepts. We’ll take a look at how to figure the vig in sports betting, particularly in multi-way futures markets, and how to understand whether you’re betting into a market that’s more difficult to beat than usual.
Sports Betting Vig — Two-Way Markets Vs. Multi-Way Markets
Figuring the juice, or the vig (short for vigorish) in sports betting can be done the same way regardless of whether we’re looking at a two-way market or multi-way one.
However, two-way markets (i.e. picking a winner between two NFL teams) are more intuitive, and most people can easily get an understanding of high-juice and low-juice markets. For example, most everyone knows that if they see a prop market with -120 on both sides, they’re paying much more than when they play an NFL side at -110.
Generally speaking, the “farther apart” the two numbers are, the more vig exists in the market. For example, -130 and +110 on a two-way prop has less juice than -140 and +110, and if they offered -110 and +110 it would be an exactly fair market. You’re only likely to find that in a promotional offer.
That’s fairly easy to see, but what happens when the market has more than two options?
Which one has more juice? It’s not immediately obvious, so you need to do a little math to figure it out.
Step 1 – Calculate Implied Probabilities
The first step: we need to calculate the implied likelihood from each line in the market.
The easy way to do this is to simply plug the lines into one of many free online calculators out there. They can spit out the implied probability if given a line.
If you want to do it by hand, you start by taking the absolute value of the American price and then plugging it into a simple equation. The absolute value in the formulas below is denoted by “x.”
Here’s the formula if the odds are positive: 100/(x+100). Multiply that number by 100 and voila, you have the implied probability. In the example above from FanDuel Sportsbook, the Lions’ implied probability is (100/2000)*100 = 5%.
If the odds are negative: x/(x+100). Since the Packers are -145, it’s (145/245)*100 = 59.18%.
Step 2 – Figure The Overround Then The Vig
Next, you need to add up all of the implied probabilities in the market. Using a spreadsheet will be the quickest way to get this done particularly in markets with many options. Here’s how it breaks down in the markets above:
- FD Sportsbook: 109.42%
- DK Sportsbook: 108.94%
Notice how both numbers are over 100. The overround is the whatever the total probabilities add up to past 100. So, the first book has an overround of 9.42 and the second has an overround of 8.94.
The overround is closely related to the vig, but you need to perform one more simple step to get the vig. Just take the overround and divide by the total implied probability. So, FanDuel Sportsbook’s vig would be 9.42/109.42.
- FD Sportsbook: 8.61%
- DK Sportsbook: 8.21%
Thus, if a bettor fires a randomized bet into either of these markets, he or she figures to get more return on a bet into DK Sportsbook.
By the same token, you divide the implied probability for each team in the market by the total implied probability to get the book’s “true” likelihood of the event occurring. So, in FanDuel Sportsbook, the Packers have 59.18% implied probability. Divide that by 109.42% and you get 54.09%. That’s the actual probability of the Packers winning the division, according to FD Sportsbook.
To see if you’ve done the math correctly, just add up the no-vig probabilities and you should get 100.
Bet With Caution In High-Vig Sports Betting Markets
Obviously, you want to line shop for the best number on the team you’re interested in betting. So, why go through these steps to figure the vig?
The answer is simple: figuring the vig gives you an idea of how much juice is baked into the lines. Bettors must overcome the juice to make a profit. This shouldn’t be news to anyone.
Notice how the juice in these markets compares to -110 on both sides of an NFL spread bet. Doing the math on -110 gives you an overround of 4.76%. That makes the vig 4.54%. That’s markedly lower than the ~8% in these futures markets.
Now, that’s not an unbeatable number, especially in markets with as much uncertainty as divisional futures. As a general rule, futures have higher vig than sides, totals and money lines. However, bettors should take note of these numbers and be wary. Understand that your confidence level should be higher when betting into a market with 8% vig.
Example Of A High-Vig Market
To get an idea of what a high-vig market looks like, take a look at the odds for a market like “which QB will lead the league in passing.” Scrolling through, it’s not immediately obvious that this market has a ton of juice. For example, the top name on the board going into the 2021 season, Patrick Mahomes, had +310 odds. Most of the 38 names had very large numbers – the median odds were +7750! How bad can it be?
Turns out, pretty bad. I’ll save you the math since it consists of 38 probabilities, but the overround came to 27.87. That means this market has 21.8% vig. In other words, you’d better be extremely confident you found some value before you put a wager in – assuming you’re playing for profit, of course.
And even if you aren’t betting, but only trying to get an accurate gauge of Mahomes leading the league in passing, you must keep in mind that the implied probability of the line won’t tell the whole story. It’s a pretty good approximation, for sure. But if you want to figure the real likelihood of the young legend topping the charts in 2021 – it’s about 19%, for the record – you must remove the vig to get the most accurate picture possible.