Re: Who pays the vig: The loser or the winner??
Both pay. Both parties enter into a proposition that will result in the winner getting 100 returned for a 110 wager. Assuming there is a 50/50 chance on the outcome, the bet is negative EV for both parties.
It's like when Sklansky writes that if you were paid 2-1 for a fair coin toss, you win .5 bets every time the coin is tossed, regardless of the immediate outcome. Thus, even when you lose, you win [img]/images/graemlins/wink.gif[/img] Additionally, when your opponents make -EV plays against you in poker(or other forms of gambling) you still 'win'.
If you win when your opponents make -EV plays, then when you make -EV plays, your opponents win. In the case of the bookie, both players are taking -EV and the bookie wins-- as both bettors lose EV, with every bet. Therefore both play the vig... it's the EV that's lost when making the bet.
In an even money proposition that pays $100 for a $110 bet, both bettors have an EV of -$5
-$5 + -$5 = -$10. That $10 is the vig!!!
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