Sports Gambling and the Juice
Don't underestimate the importance of juice
As you become serious about making a profit in sports betting, there are many factors you should keep in mind. Solid handicapping and research are a given, as is a basic grasp of discipline and bankroll management.
Most bettors are aware of the pitfalls of poor bankroll management; that is, they know that betting a high percentage of their bankroll on one particular game, or chasing losses with larger bets on the next game is not a prudent thing to do.
Even so, there are many sports bettors, even those who might qualify as advanced in most areas of skill, who take for granted the importance of the "juice," or vigorish, in the sports betting business.
The juice is the fee the sports book charges that essentially puts the odds in their favor against the gamblers. The standard fee is 10 percent or -110; in other words, you have to bet $110 in order to win $100. If you win, the fee is returned along with the original wager and the sum of the win for a total of $210.
So what's the problem, you ask? Most novice bettors, once they become familiar with this concept, tend to not give it much serious thought. They figure since they intend on winning anyway, what's the big deal about the fee they have to pay up front if they intend on getting it back?
The fact is, the juice makes a much bigger difference over the long haul than you might expect. In the short run, the juice serves as a sort of insurance policy for the sports books that ensures them a profit regardless of the outcome of each game.
Imagine, for example, that you walk up to the counter and place a $110 bet to win $100 on Team A. The customer behind you in line bets $110 to win $100 on Team B. The sports book has now taken $220 worth of wagers on the game and will only have to pay out $210 regardless of which team wins, guaranteeing the business a $10 profit.
Many bettors mistakenly believe that this profit margin alone is what keeps sports books in business. This isn't entirely true; although the point spread and other odds are set with the hope of drawing "two-way action," or bets on both teams, the juice is essentially a default position for the sports book.
In other words, if they receive exactly 50-50 action on each game both in volumes of wagers and amount wagered, the books will gladly accept the 10 percent profit that comes with this situation.
However, this scenario is far from a common occurrence. More often not, the books are unbalanced on each game, meaning they have taken more bets on one side than the other. In essence, they are gambling against the bettors, because they will lose money if they side on which they are heavy wins the game. The sports books stay in business because they win more often than they lose in these situations.
So while the juice only accounts for a portion of the profit for a sports book, it is a major obstacle that stands between you and long-term success with sports betting.
This is because beating the point spread on a consistent basis is difficult, and simply breaking even is a losing proposition. For instance, if you bet $110 to win $100 on six different games and went 3-3, you might think you broke even for the day.
Think again. When you placed your bets, you gave the sports book a total of $660 and, despite winning half of them, you are now only picking up $630 when you cash your tickets.
Over the long haul, these $30 losses add up and, the more you bet, the more juice you will pay. This forces you to win at a higher rate than 50 percent in order to show a profit.
The break-even point for sports bettors when you factor in the juice becomes 52.5 percent.
Again, the 2.5 percent edge the house gets from the juice might not seem like much, but let's compare this to other gambling games.
A blackjack player who uses correct basic strategy on every hand can expect to break even against the house in the long run. An advanced card counter can expect to achieve a 1-2 percent edge over the house. This seemingly slight edge is enough to get card counters banned from the casino as soon as management catches on to them.
So if you bet 100 games against the point spread, you must hit 53 of them in order to just break even. This is the equivalent of the sports book taking a three-game lead on you before you bet the next 97.
The goal you must shoot for is a minimum of 55 percent, with the hopes of hitting 57 percent or higher over the long haul. With good handicapping and discipline this is possible, but you must always keep the juice factor in mind.
You must count the juice as part of your wager and factor it in as a percentage against your bankroll. For instance, if you bet $110 to win $100 and your bankroll is $1,000, you are betting 11 percent of it, not 10 percent. Because of this, it is important to understand your bankroll.
Some sports books, particularly of the online variety, might offer a weekly special in which the juice is -105 on a particular day or event. This is something you should take advantage of, as you are receiving a product that is worth $110 for $105.
Also, if sports books are heavy on one side of a game, they might change the juice on each side to generate more action. For example, if a 4-point favorite is heavily bet, they might charge -120 for the favorite and let you take the underdog for even money. If the underdog is the side you liked to begin with, this is a situation you must take advantage of.