The House Takes the Juice: How Sportsbooks Make Money - TheStreet

The House Takes the Juice: How Sportsbooks Make Money

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Sports gambling may have slowed since the onset of the coronavirus pandemic, but it hasn't disappeared completely. Sports betters are getting their fix with wagers on UFC tournaments, horse races, esports, and more—some people, desperate for a bet, are even gambling on Top Chef and the Los Vegas weather.

However you get your gambling fix, it's important to understand how it all works—and that includes gambling terminology.

So, what is "juice," or vigorish?

Most people appreciate a glass of fresh orange or apple juice, but that's not what we're talking about here. In sports betting, "juice" refers to the money netted by sportsbooks, i.e. their commission, from taking your bet.

Most of the time, sports books aren't interested in the final results of a bet—who wins or who loses. That's generally not how they make money. What they care about is netting a profit, which is where juice comes in. In order to make money of betting, sportsbooks work off commissions. In general, they take 10% for each wager, but it varies. Some commissions go as high as 25%.

Take this example. You make a $100 wager. In this scenario, with 10% juice, the bookies pay out $100 to the winning side and collect $110 from the losers, thus netting $10 for themselves. Add up all the wagers, and this can actually amount to a lot of money, sometimes millions of dollars or more.

As a gambler, you should pay attention to juice and shop around for the lowest prices. If you lose your bet, you want to avoid paying more juice than you have to.

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