It sounds crazy to new bettors but a winning record can still lose money. You can win more bets than you lose – and still end up losing money. It’s not really puzzling when you take into account three concepts in sports betting: the vig the moneyline, and the cost of picks.
The “vigorish” is the fee or commission that the bookie or sportsbook receives for placing your bets. It is more commonly known these days as “vig.” Another word for it is “juice.” In a pointspread bet, bettors normally pay $110 to win a $100 bet (or equivalent ratio). The $10 differential is paid to the bookie as his commission. In an 11-10 playing odds, the vig comes up to 4.55% — paid by the winner.
Yes, it’s the winner who pays the bookie. The loser doesn’t pay the bookie a cent. He already lost his bet; that’s bad enough for him. How did the figure “4.55%” come about? It’s the commission that the winner pays the bookie for winning an 11-10 bet. Just to illustrate, let us take two bettors who each placed $110 hoping to win $100 in the bet. The bookie now has the $220 of the two bettors. One bettor wins and the other loses. The winning bettor then gets the $100 pay-out and the $110 bet he placed. The winning bettor now has $210. The losing bettor is poorer by $110. And the bookie makes $10 – from the winning bettor. If the two bettors did not go through a bookie, the winning bettor would end up pocketing $220. $10 is 4.55 % of the total $220 bet.
Factoring in the Vig
You have to factor in the vig in the computation of your money earnings. With the vig in place, you will see that a small winning percentage will not put you in the money. You have to have a big winning percentage jest to realize a profit from your betting’s. Let us take three examples:
50-50 record. You would think that with a 50-50 record, you would end u not losing a cent. You didn’t make money, but you didn’t lose money either. If that’s what you think, you’re dead wrong. In a 50-50 split, you lose $500. Here’s how:
You placed $110 bet 100 times for a total of $11,000. You won 50 games for a total of $5000. You also get back the $5,500 you placed for your winning bets. You now have $10,500 total winnings. But remember that your total bets were $11,000. Hence in a 50-50 record, you end up $500 poorer – with the other $500 going to the bookie.
52-48 record. Again you have a total of $11,000 bets of $110 each for 100 games. You won 52 games for a total of $5,200 winnings. The bookie also returns to you the $5,720 ($110 x 52) you placed for your wining bets. You now have $10,920. Keeping in mind that your total bets for the 100 games was $11,000; you end up $80 poorer even if you have a 52% winning percentage.
53-47 record. Still $11,000 total bets at $110 each for 100 games. Bettor wins 53 games for a total of $5,300 winnings. He also gets back the $5,830 he placed for the 53 games he won ($110 x 53). Thus, $5300 + $5,830 = $11,030. With a 53-47 record, the bettor realized a %30 profit.
With our illustrations above, you can see that, with a small winning percentage of 51 or 52%, you will lose money. You will only start realizing a profit after factoring in the vig when you post in a record of 53% or higher.
Losing with the Favorites
Another way to lose money even with a winning record is to consistently bet with a favorite. In moneyline bets such as baseball and ice hockey, oddsmakers set odds to make the match-up between the favorite and the underdog more exciting. In such sports, a person who consistently bets on the favorite has to have a big winning percentage just for him to realize a profit. Below is an illustration.
Betting on a -120 favorite. Bettor places $120 to win $100. For the sake of simplicity, he does this 100 times betting on a -120 favorite always. He wins 53% of his bets and loses the other 45%.
Total Bets: $12,000
Total Winnings: $ 5,300 ($100 x 53 games won)
Total Returned to Bettor by Bookie $ 6,360 ($120 x 53 games bet)
Total Winnings $11,660
Given that the bettor bet a total of $12,000, he still lost $340 even with a 53% winning record betting on the favorite. In fact, he would still lose money even with a 54% record. (In this example the bookie didn’t receive any vig.)
A bettor who consistently bets on the underdog does not need to have a very high winning record since he does not risk as much in every bet, yet gains a lot for every win.
If you use a sports handicapper for your bets you need to factor in this cost. Let’s say you buy a $500 football season pick package. If you place one bet each week of the NFL season you need to win an extra $29 each week just to break even. This is on top of the vig cost. $29 is not a big amount but it does add up and can explain why you lost money even though your sports handicapper had a 55% winning percentage.55% percent can earn money if you bet enough money but if you bet small amounts you can lose money with 55% accuracy and even higher winning percentages depending on how little you bet and how expensive the picks are.
You need to be smart and make sure to add up all of the costs including these often overlooked costs. Otherwise your sports betting can quickly turn into a losing proposition instead of a winning investment. The vig and the moneyline play a significant role when you compute your money winnings. Factor these in every time you place your bets – especially with a bookie or sportsbook. After all, you may find yourself losing money even when you have a winning record.