Who pays the vig: The loser or the winner??

[craig]

Those were my thoughts Homer. The winner pays the "broker" (bookie) for carrying out the transaction.

craig

[Performify]

The winner pays 100% of the vig, and its not even close.

Do you see why?








[img]/images/graemlins/grin.gif[/img]









if not, its exactly as detailed by a couple people above. the winner should be paid 110 for his 110 bet but is paid 10:11. this money withheld from the winner (only) is the juice.

In other words, both betters are not risking 110 to win 100, even though it looks that way. They're both risking 110 to win 110, but the agreement is that the "house" only pays the winner 10:11. The loser drops 100% of their risked wager, not any more.

The casino table games are the perfect example. Do the casinos take their profit from people who win or people that lose at roulette / craps / etc?

While your first instinct might be that the losers are the ones that keep the lights on in Vegas, casinos take their longterm profits from each person that wins a bet, by paying them less than what they should (less than the true odds of the action happening). and this is why most people lose money over time, because they're playing a -EV game.

You can see this another way, by looking at if you went to a roulette table and placed a bet on every number (including 0 and 00 if you're in a US casino) you'd lose money, because the house is taking a percentage of your winnings as juice. If the house wasn't taking juice from the winner, you'd be breaking even.

Same thing with red/black on roulette: they should be paying more than 1:1 because of the 0/00 factor, and since they're not you have a longterm -EV expectation because they're witholding the extra 2%/4% from your payout on red/black.

[smbruin22]

very interesting topic, and something i wondered about.

alot of people think the "commission fee" is 9% (approx. 10/110) not the 4.55% (from memory)... but i always knew the fee was the lower amount, although sometimes it's hard to conceptualize.

[NajdorfDefense]

[ QUOTE ]
I have seen this discussed and i would really like to know your thoughts on this. If we have two guys who place a bet with a bookie. Each lay -110 on oppossite sides. The loser loses all of his 110, but the winner only wins $100. Who pays the juice? I know the actual answer. But, I want to see what you guys think and maybe I am wrong (doubtful [img]/images/graemlins/smile.gif[/img] ).

craig

[/ QUOTE ]

Winners pay, this is a joke, right Craig? Loser lost his bet, he didn't pay any vig. If you bet on Hard 10 at craps and lose, do you pay a vig there as well?

Naj

[craig]

[ QUOTE ]
[ QUOTE ]
I have seen this discussed and i would really like to know your thoughts on this. If we have two guys who place a bet with a bookie. Each lay -110 on oppossite sides. The loser loses all of his 110, but the winner only wins $100. Who pays the juice? I know the actual answer. But, I want to see what you guys think and maybe I am wrong (doubtful [img]/images/graemlins/smile.gif[/img] ).

craig

[/ QUOTE ]

Winners pay, this is a joke, right Craig? Loser lost his bet, he didn't pay any vig. If you bet on Hard 10 at craps and lose, do you pay a vig there as well?

Naj

[/ QUOTE ]

I think this is obvious, but many have argued that the losers pay. When I win a bet placed at -110 I am shorted $10. It is obvious who is paying.

craig

[plus_man]

[ QUOTE ]
In other words, both betters are not risking 110 to win 100, even though it looks that way. They're both risking 110 to win 110, but the agreement is that the "house" only pays the winner 10:11. The loser drops 100% of their risked wager, not any more.


[/ QUOTE ]
Please excuse me if I'm wrong because I didn't read this entire thread but couldn't it be looked at as both people in theory having to risk 100 to win 100 but the house just takes their edge off of both sides before the outcome to guarantee a profit? This would mean the loser would actually pay.

[NajdorfDefense]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
I have seen this discussed and i would really like to know your thoughts on this. If we have two guys who place a bet with a bookie. Each lay -110 on oppossite sides. The loser loses all of his 110, but the winner only wins $100. Who pays the juice? I know the actual answer. But, I want to see what you guys think and maybe I am wrong (doubtful [img]/images/graemlins/smile.gif[/img] ).

craig

[/ QUOTE ]

Winners pay, this is a joke, right Craig? Loser lost his bet, he didn't pay any vig. If you bet on Hard 10 at craps and lose, do you pay a vig there as well?

Naj

[/ QUOTE ]

I think this is obvious, but many have argued that the losers pay. When I win a bet placed at -110 I am shorted $10. It is obvious who is paying.

craig

[/ QUOTE ]

yeah, they have a name for those people, they are called 'suckers.' [img]/images/graemlins/grin.gif[/img]

Naj

[BobJoeJim]

WHY IS THIS DISCUSSION STILL GOING BACK AND FORTH?!?!?!?!

THE WINNER PAYS!!!
SO DOES THE LOSER!!!

You can argue, mathematically, that only the winner pays, OR that only the loser pays, and be technically "right" either way. It's all semantics. In the end it all averages out though, and the winner and loser each pay half the juice.

If you plan to factor your answer to this question into any of your bankroll management plans, then you HAVE to treat the answer as "both" or else you'll get yourself into trouble down the road.

[StevieG]

Interesting to see this here. The same argument came up at Covers a few years back with people insisting that only losers pay the vig.

So I came up with this thought experiment. Suppose the house decided to run a promotion - every Sunday, for the first round of games, they make one a "no juice" special, but they do not reveal what the game will be before hand. So everyone still bets the the -110 but in one case the winners will actually get paid as if it were +100.

If all you picked were losers then you would never know what game was juice free. Only a winner would be able to identify the juice free game.


Now, if someone can come up with a similar situation in which the winner can't tell which game had the juice, I'll agree that both sides pay the vig.

Until then, I'm sticking to the idea that only winners pay the vig.

[DeucesUp]

[ QUOTE ]
It's all semantics. In the end it all averages out though, and the winner and loser each pay half the juice.

[/ QUOTE ]

This is really the correct answer. The system is set up such that the book takes in more more than they have to pay out hence everyone who's betting is paying vig.

I'll give one more way of looking at it which I think shows that both winners and losers pay vig:

Consider instead a betting exchange with no fees. When a bet is agreed upon, there is no vig - 100% of the money wagered goes to the winner. Now one person on this exchange is offering to take bets on Sea+4-105 and another is offering bets on Pitt-4-105. The "market" is giving a fair value of this game of Sea+4+100 the midpoint between these offers. These two offers that are out there haven't been matched up because of the "bid-ask spread" between these two numbers, neither is willing to lay even odds on their bet they both want to get back +105.

Now if you want to take one of these bets - it doesn't matter which one - you have to "jump across" the bid-ask-spread and lay -105. Clearly from a trading point of view, you've taken the worst of it. You've conceded the even odds and agreed to pay -105 odds which is essentially vig. In this model, it is always THE BUYER who is agreeing to take odds worse than the fair market value. Note that it doesn't matter whether the bet wins or looses, the buyer paid his "vig" when he accepted odds worse than what the market was valuing the game at.

In the case of the sportsbook, the bettor is always "the buyer" and the sportsbook is always "the seller". The sportsbook is offering bets on both sides but the odds offered on both bets are decreased from the fair price, generally making you lay -110 when the fair price is +100. You pay the vig when you accept the bet at decreased odds, it doesn't matter whether the bet wins or looses.