Devig: 3 Ways to Remove Bookmaker Margin

What is devigging?

Every sportsbook adds a margin to their odds. This margin is called the vig (short for vigorish), juice, or overround. It is how bookmakers guarantee a profit over time, regardless of the outcome. When you look at a set of odds, the implied probabilities always add up to more than 100%. That extra percentage is the bookmaker's cut.

For example, a fair coin flip has a true probability of 50% for each side. A bookmaker does not offer even odds on a coin flip. Instead, they might offer 1.91 on heads and 1.91 on tails. If you convert those odds to implied probabilities, each side is 52.36%. That adds up to 104.72%, not 100%. The extra 4.72% is the margin.

Devigging strips that extra margin away. After you devig, the same coin flip goes back to 50%/50%. That might seem obvious for a coin flip. But for an NFL spread or a soccer match, the true probability is not obvious at all. That is why devigging matters.

The true probability tells you what the market actually thinks will happen. Once you know the true probability, you can compare it to prices at other bookmakers. If another book offers odds that imply a lower probability than the true probability, you have found a positive expected value (+EV) bet.

Why the vig exists

Bookmakers are businesses. They need to make money on every market they offer, no matter who wins. The vig is their primary revenue tool. It works like a transaction fee built into the odds themselves.

Think of it this way. In a perfectly balanced two-way market, the bookmaker takes equal action on both sides. With a 4.5% margin, they collect more money from losing bets than they pay out on winning bets. The margin is the gap between what bettors pay and what bettors receive.

Margins are not the same everywhere. Sharp bookmakers like Pinnacle operate on thin margins because they attract high-volume, knowledgeable bettors. Pinnacle charges around 2% on liquid markets like NFL spreads, compared to the 5-8% industry average at recreational bookmakers (Pinnacle Betting Resources). Soft bookmakers charge more because their customers are less price-sensitive. And niche markets carry the heaviest margins because there is less liquidity and more uncertainty.

These differences in margin are exactly why devigging is useful. A 5% margin at a soft book means the odds are 5% worse than fair. But the true probability is hidden inside those odds. Devigging lets you extract it.

You can use our vig calculator to quickly see how much margin any bookmaker is charging on a specific market.

How to devig: step by step

There are three main methods for devigging odds. Each one handles the margin differently. Let's walk through all three using the same example so you can see how they compare.

Our example market: An NFL spread with Pinnacle odds of 1.93 / 1.93 (both sides at 1.93 in decimal odds).

Step 1: Convert the decimal odds to implied probabilities.

• Side A: 1 / 1.93 = 0.5181 = 51.81%
• Side B: 1 / 1.93 = 0.5181 = 51.81%
• Total: 51.81% + 51.81% = 103.63%

The total is 103.63%, so the overround (margin) is 3.63%. Now let's remove it using each method.

Multiplicative method (basic)

This is the simplest approach. You divide each implied probability by the total to scale everything back to 100%.

Formula: True probability = Implied probability / Sum of all implied probabilities

The multiplicative method assumes the margin is spread equally across all outcomes. This works well when both sides have similar odds (like NFL spreads). It breaks down when there is a heavy favorite and a big longshot.

Power method (odds-based)

The power method adjusts for uneven margin distribution. The core idea is that bookmakers tend to load more margin onto the longshot side. To show how this works, let's use a more lopsided example: odds of 1.25 / 4.20.

Formula: Find the exponent k such that (1/odds_A)^k + (1/odds_B)^k = 1. Then, true probability for each side = (1/odds)^k.

Notice the difference. The power method assigns a higher true probability to the favorite and a lower probability to the underdog. This matches what we observe in real markets: bookmakers protect themselves on longshots by adding more margin there. A small percentage shift on a 4.20 longshot is much cheaper for the book than adding margin to a 1.25 favorite.

Shin method

The Shin method is named after economist Hyun Song Shin, whose 1991 paper in The Economic Journal showed that bookmaker odds diverge systematically from true probabilities due to the presence of informed bettors. It models the bookmaker's margin as protection against informed bettors who have insider knowledge. The method assumes that a certain percentage of all bets come from "insiders" and adjusts the probabilities accordingly.

Key insight: The Shin model distributes more margin onto outcomes where insider information would be most valuable. In practice, this means favorites carry slightly less margin than longshots, similar to the power method, but with a different theoretical basis.

The Shin formula is more complex than the other two methods. It involves solving for a parameter z (the estimated proportion of insider bets) and then recalculating each probability. Most bettors use a devig calculator for this method rather than doing it by hand.