Vig, overround and hold: three numbers to keep separate
The margin embedded in quoted prices is not the same as a sportsbook’s realized revenue percentage. Work through the market arithmetic before comparing either with a bettor’s ROI.
Calculate overround from the full market
For each mutually exclusive outcome, convert decimal odds d to implied probability 1 ÷ d. Add every outcome and subtract 1. Two opposite −110 prices each imply about 52.38%, so their sum is 104.76% and the overround is about 4.76 percentage points.
“Vig” is often used informally for the cost embedded in a price. If someone quotes a percentage, ask which formula they used. A two-side overround, a single bettor’s expected loss rate and realized operator hold are different calculations.
Follow the cash in a balanced example
| Item | Amount |
|---|---|
| Stake on Side A | $110 |
| Stake on Side B | $110 |
| Total stakes | $220 |
| Return to the winning side | $210 |
| Operator gross remainder | $10 |
| Remainder ÷ total stakes | 4.545…% |
The cash remainder is $10 whichever side wins, assuming exactly one side wins and no fees, refunds or promotions. The remainder divided by $220 is about 4.55%, not 4.76%. This simple example shows why the quoted overround and a revenue-to-stakes percentage should not share one unlabeled number.
Realized hold depends on actual activity
If only one side receives a stake, the result matters. With one $110 stake at −110, the operator either pays a $210 return or retains the $110 stake in this simplified example. There is no fixed $10 outcome. Real-world reported hold can also have accounting adjustments; consult the definition used in the report.
Likewise, a bettor’s ROI measures that bettor’s net result relative to stakes. It is not the quoted margin for the market. A small set of bets can produce a result far from any long-run expectation.
A lower margin does not prove a selection is valuable
For the same outcome and rules, a higher payout improves the offered price. But a narrow overall market margin does not independently establish the true chance of one selection. Proportionally removing margin creates a normalized estimate, not a verified probability.
Use contemporaneous prices for the complete market. A draw omitted from a three-way market, mismatched thresholds or prices from different times can make the computed total describe something other than the intended market.
Try the numbers yourself.
Open the calculator with this guide’s example inputs. Change one assumption at a time and see what changes.
Open implied probability calculatorCommon questions
Is overround the operator’s guaranteed profit percentage?
No. Stake distribution, outcomes and accounting details matter. Even the simple balanced example uses a different denominator.
Does a 100% implied-probability sum prove fair odds?
No. Prices can sum to 100% and still misprice individual outcomes. Normalization is not independent validation.
Sources and example scope
The source supports market-margin arithmetic. The cash-flow examples are original and intentionally simplified; they are not a report of any operator’s actual hold.