Education

Implied probability & the vig

American odds encode a probability. To convert: a positive line like +150 implies 100 / (150 + 100) = 40.0%. A negative line like -110 implies 110 / (110 + 100) = 52.4%.

On a standard two-sided market where both sides are priced at -110, the implied probabilities sum to 104.8% — not 100%. The extra 4.8% is the vig (also called juice or overround): the book's built-in margin.

To find the fair (no-vig) probability, normalize each side:

p_fair = p_implied / (p_home_implied + p_away_implied)

This is the true market consensus probability — the starting point for calculating edge. At -110 both sides, the fair probability is exactly 50%. You need your model to exceed 52.4% — not 50% — to break even after vig.

Expected value (EV)

Expected value is the average profit over many identical bets. For a $1 wager at -110:

EV = p × 0.909 − (1 − p) × 1.00

This is positive only when p > 52.4%. If your model gives a team a 55% true win probability, EV = +2.4% per dollar wagered — every $100 bet is worth $2.40 in expectation.

Positive EV is the only sustainable path to profit. Short-term results can be misleading; EV — measured by Closing Line Value or long-run ROI — is the correct signal to track.

What is CLV?

Closing Line Value (CLV) is the difference between the odds you bet and the closing odds at a sharp sportsbook. It is the gold standard for evaluating betting skill, because closing lines reflect the sharpest consensus available. Consistently positive CLV is a stronger indicator of long-term profitability than win rate alone.

CLV is measured as the implied probability difference. If you bet -110 (implied 52.4%) and the line closes -120 (implied 54.6%), your CLV is +2.2%.

Tracking CLV over time separates skill from luck and prevents overreacting to short-term variance.

Why line shopping matters

Line shopping — comparing odds across multiple sportsbooks — can make a dramatic difference in long-term results. Betting -110 instead of -105 on 1,000 $100 bets costs approximately $4,500 in expected value. Always seek the best available price before placing a wager.

Even small differences in odds compound over hundreds of bets. Maintain accounts at multiple books and use odds comparison tools to maximize your edge.

Worst bet types

Parlays, same-game parlays, and teasers are among the worst bet types for long-term value. Parlays compound the sportsbook's vig across multiple legs: a 3-leg parlay of -110 sides has a true win probability of 27%, but books pay only 6:1 (implied 14.3%), producing a massive effective vig.

Same-game parlays and teasers are often priced even worse — correlations and alternate lines are priced to maximize hold. Sharp bettors avoid these markets.

How sharp bettors get limited

Sharp bettors — those who consistently beat the closing line or exploit market inefficiencies — often face account restrictions from sportsbooks. Books monitor betting patterns and limit or ban accounts that show signs of sharp action, especially if they consistently move lines.

Getting limited is ultimately a badge of honor: it means you have a measurable edge the book recognizes. Sharps often spread volume across many books or use betting partners to maintain access.