Vig-Free Probability — Removing the House's Cut
Vig-Free Probability
If you add up the implied probabilities of both sides of a game, you'll get more than 100% — usually around 105%. That extra slice is the sportsbook's profit margin, the vig (also called juice or the overround). To compare a price honestly against a model, you first have to take it back out.
A worked example
Say a game is priced -110 / -110, the standard. Convert each side to implied probability:
- -110 → 110 ÷ 210 = 52.4%
- -110 → 110 ÷ 210 = 52.4%
Add them: 104.8%. That 4.8% over 100 is the vig — the house edge baked into the prices. Neither side is really 52.4% to win; the true market estimate is lower on both.
Removing it
The simplest method is to normalize — divide each side's implied probability by the total:
- 52.4% ÷ 104.8% = 50.0%
- 52.4% ÷ 104.8% = 50.0%
Now they add to 100%, and we have the market's vig-free estimate: a genuine coin flip. For a lopsided game priced -250 / +200, the raw implied probabilities (71.4% and 33.3%) sum to 104.7%; normalized, they become about 68.2% and 31.8%.
Why it matters for edge
Our edge number compares a model's probability to the market's. If we used the raw implied probability — inflated by vig on every side — we'd understate our edge and miss good bets. Stripping the vig first is what makes the comparison fair. It's a small step that a lot of casual "value" calculators skip, and skipping it quietly makes every edge look worse than it is.
The takeaway
The vig is the reason betting is hard: you're not just trying to be right, you're trying to be right by more than the house's cut. A break-even bettor at -110 needs to win about 52.4% of the time just to stay even. Finding prices where your true probability clears that bar — at the best number available across books — is the entire job. Vig-free probability is how you measure whether you've done it.
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