Every price at every Australian bookmaker includes a hidden margin. Here's how to calculate it, what it tells you about a market, and why it matters for every bet you place.
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Every price at every Australian bookmaker has a hidden tax built into it called the vig. It's how bookmakers make money, and understanding it is the first step toward recognising which bets actually represent value and which just feel like they do.
This guide covers what the vig is, how to calculate it on any market, what normal vig amounts look like at AU bookmakers, and what the vig tells you about the quality of a given price.
Vig (short for vigorish) is the percentage by which the combined implied probabilities of all outcomes in a market exceed 100%. Other names for the same thing:
All five terms describe the same thing: the built-in margin that makes the bookmaker mathematically favoured to profit over time regardless of customer outcomes.
The formula is simple and works for any market:
Vig % = (Sum of implied probabilities of all outcomes) − 100%
Where implied probability of each outcome = 1 / decimal odds.
Sportsbet has Collingwood at $1.91 and Essendon at $1.91 in an AFL H2H market.
A soccer match has three outcomes: home, draw, away. Example prices at Ladbrokes: Home $2.30, Draw $3.40, Away $3.20.
Three-way vig at AU soccer markets is typically slightly lower than two-way vig because the competitive pressure between books on high-profile international soccer keeps margins tight.
The vig percentage is a direct measure of how expensive a market is for you. Every percentage point of vig is a percentage point of expected loss per dollar staked, before any question of whether your pick is right.
Typical vig ranges at Australian bookmakers:
The consistent pattern: main markets have low vig because competition between AU bookmakers drives margins down. Novelty and niche markets have much higher vig because retail punters don't price-shop on them.
Typical vig levels on mainline AFL H2H markets at AU bookmakers (observations from tracked pricing):
Betfair's structure is fundamentally different. The exchange matches backers with layers at a market price, so there's no bookmaker margin baked into the odds. Betfair's economics come from commission on winning bets. For the full Betfair discussion, see the Betfair defence piece.
Low-vig markets are structurally better to bet. If AFL H2H at Bet365 has 3.5% vig and the same market at TAB has 5.5% vig, the Bet365 price is closer to fair value — meaning your expected-value calculation against true probability is more favourable on Bet365 for the same market.
Specifically, two things matter:
Compare vig across bookmakers on the same market. Within AU, the price dispersion across 140+ bookmakers on the same AFL H2H can range from 3% to 7% vig on a single market. Always betting at the lowest-vig book for a given market compounds to meaningful EV differences across a season.
Compare your estimated true probability to the de-vigged price. Once you strip the vig out of a market, you get the fair odds — the bookmaker's estimate of true probability, stripped of margin. Your EV calculation should compare your true probability estimate to the fair (de-vigged) probability. See the de-vigging guidefor the mechanics.
A few ways bettors accidentally expose themselves to high-vig products:
Same-game multis. SGMs compound vig across legs and add correlation-based margin. Typical AU SGMs run 25-35% effective vig. Even +20% promotional boosts rarely make them mathematically profitable. See the multis piece.
First goal scorer / first try scorer markets. Novelty markets with 20-30% vig. Occasionally beatable through specific mispricings but hostile terrain generally.
Specials and exotic markets. “Will there be a player sent off,” “total corners over/under,” “correct score.” Narrow audiences, wide vig.
In-play phone betting. Phone bets at AU corporates carry wider margins than pre-match online prices — a structural consequence of the operational cost of phone betting plus the reduced competitive pressure.
Vig calculation is the foundation under several related techniques:
De-vigging: removing the vig from a set of odds to produce fair (no-vig) probabilities. See the de-vigging guide.
Arbitrage detection: finding combinations of best-available prices across bookmakers where the combined book percentage falls below 100%. See the surebet beginner's guide.
Expected value calculation: comparing your true-probability estimate to the bookmaker's implied probability to determine if a bet is +EV. See the EV calculation guide.
Yes, mathematically. Lower vig means prices closer to fair value, which means your EV calculations are more favourable. For the same true probability estimate, a lower-vig price always produces higher EV.
Same formula as two-way: sum the implied probabilities of all three outcomes (1 / odds for each), subtract 100%. For a soccer market at $2.40, $3.40, $3.20 the book percentage is 43.48% + 29.41% + 31.25% = 104.14%, vig is 4.14%.
They're the same concept. “Vig” is US/AU betting slang, “overround” is the technical term used in bookmaking and analytics. Book percentage minus 100 equals both.
Betfair Exchange doesn't have traditional vig because prices are set by users matching against each other. Betfair's economics come from a 6.5% commission on net winnings, which has a similar effect on bettor returns as vig does at conventional bookmakers. On net, Betfair is usually slightly better value than AU corporates on main markets despite the commission.
Not at conventional bookmakers in normal conditions. Zero or negative combined book percentage across multiple bookmakers is an arbitrage opportunity and disappears quickly. See the arbitrage guidefor the mechanics.
James covers the AU bookmaker market — pricing mechanics, line movement, promotional structures, and how the corporate books actually operate. Previously worked in financial markets before moving to sports analytics.
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