The Vig, Explained in Plain Arithmetic
A sports book that prices both sides of a game at minus one hundred and ten is not charging a fee at the door. It is charging inside the price. Each side risks eleven to win ten, and the extra dollar is the whole of the book's business.
The arithmetic is easy to follow if the two sides are imagined as equal. Two bettors each put up eleven dollars. Twenty-two dollars sits on the table. One of them collects twenty-one, and the book keeps one. One dollar out of twenty-two is a little over four and a half per cent of everything staked, which is the number that matters to the book and the number almost nobody quotes.
That figure is not the same as the number a bettor loses on average, and it is not the book's profit either, because the two sides are almost never exactly equal. It is simply the margin built into a balanced pair of prices. Everything else a book does is an attempt to move the real money closer to that balanced state.
The word itself is a borrowing. Vigorish came into American usage from a Yiddish rendering of a Russian word for winnings, and by the middle of the twentieth century it meant the cut taken by whoever was holding the money. It survives in sports betting long after the rooms that coined it closed.