Pricing Framework Interactive

Vig / Juice / Hold

The house edge built into pricing. Understanding how to balance profitability with user experience and competitive positioning.

📖 Terminology

Vig (Vigorish)

The commission charged by the house. A $110 to win $100 bet has 10% vig on the profit.

Juice

Same as vig. "The juice is -110" means you pay $110 to win $100.

Hold

The percentage of total wagered that the house keeps. Also called the "overround" or "margin."

Market Settings

20% 80%

0% 15%

10$ 1000$

📊 House Edge

Overround 4.5%

Expected Profit $4.50

Bettor Disadvantage $8.61

Implied Odds (with Vig)

OVER

-109

Implied: 52.3%

True: 50% | Vig bump: +2.3%

UNDER

-109

Implied: 52.3%

True: 50% | Vig bump: +2.3%

Total Implied 104.5%

Fair market = 100%. Anything over 100% is the house edge.

Payout Impact

Fair Payout (0% vig)

$200.00

Actual Payout (4.5% vig)

$191.39

Bettor Loses

$8.61

🏁 Competitive Landscape

Sharp Book

2.5%

-110/-110 → -114/114

Standard

4.5%

-110/-110 → -125/125

Retail

-110/-110 → -133/133

High Margin

10%

-110/-110 → -155/155

Trade-off: Lower vig attracts sharp bettors and volume, but reduces per-bet profit. Higher vig maximizes profit per bet but loses price-sensitive customers.

⚖️ Vig Optimization

When to Lower Vig

→ High-volume markets (NFL, NBA primetime)
→ Attracting sharp money for price discovery
→ Competitive markets with many alternatives
→ Building user acquisition and retention

When to Raise Vig

→ Exotic/niche markets (lower volume)
→ Uncertain pricing (injury news, weather)
→ High-correlation parlay combinations
→ One-sided action requiring balance

R Code Equivalent

# Calculate vig/hold from odds
calculate_hold <- function(odds_over, odds_under) { 
  implied_over <- 1 / odds_over
  implied_under <- 1 / odds_under
  hold <- (implied_over + implied_under - 1) * 100
  return(hold)
}

# Remove vig to get true probabilities
remove_vig <- function(odds_over, odds_under) { 
  implied_over <- 1 / odds_over
  implied_under <- 1 / odds_under
  total <- implied_over + implied_under
  
  true_over <- implied_over / total
  true_under <- implied_under / total
  return(list(over = true_over, under = true_under))
}

# Add vig to true probability
add_vig <- function(true_prob, total_vig) { 
  # Split vig evenly
  implied <- true_prob + total_vig / 2 / 100
  decimal_odds <- 1 / implied
  return(decimal_odds)
}

# Example
hold <- calculate_hold(1.9139, 1.9139)
cat(sprintf("Hold: %.2f%%\n", hold))

✅ Key Takeaways

• Standard -110/-110 = 4.5% hold
• Overround = sum of implied probs - 100%
• Higher vig = more profit per bet, less volume

• Sharp books run 2-3%, retail up to 10%+
• Vig is split across both sides of market
• Remove vig to calculate true probabilities