Why the juice is important

EDIT: I just read this on the FOS Premium Board. It is an example of a great post to fade. I already knew I was going to be on UVA because of mongoloids like this. Honestly, this is why I pay to be a FOS Premium Member. Where else are you going to get this kind of hard hitting analysis?

I saw these lines two days ago and assume they still hold: Any input?

USC -19.5 at UVA

->Even with a backup QB, I think USC steamrolls UVA by atleast 3 TDs.


Utah +3.5 at Michigan

->A couple of reviews I read gave Utah pretty glowing reviews on both sides of the ball. Plus I think Michigan is gonna struggle big time this season.

Note: Originally, this post was going to be about which online sportsbooks to deposit money into. I am going to push that back until next week because I think it is more important to describe the rationale for choosing those sportsbooks first. If you are desperate to get money into an account, go to Matchbook and talk to their live support about where to send a Moneygram, which you can do at any Wal-Mart.

The second most important thing to consider when gambling, after being contrarian, is to make sure that you are getting the best price possible. Betting anywhere costs money. It's not like betting $20 on the Super Bowl with your buddy or entering a $5 bracket into an NCAA Tournament pool. The money it costs is called the juice, vig, or rake. The juice is why you often hear that books try to set a line to attract equal action (which was already posited as false). Think of juice as a tax for allowing you to place a bet.

In Las Vegas, you are going to pay a 10% tax on your wagers. In other words, in order to win $100 on a bet, you have to bet $110. In the gambling vernacular, this is known as -110 juice. I've never placed a bet with a bookie, but I've heard of them charging as much as -115 juice, which is a terrible price. Occasionally, you will find positive juice. For example, a bet at +103 wins $103 for every $100 bet.

On the internet, most books will also charge you -110 juice. So, if you are looking at tonight's Eagles-Panthers game at a standard book, you will see Philadelphia -3.5 -110 and Carolina +3.5 -110. Fortunately, there are a few better options out there than -110 juice. But we'll come back to that next week.

To see why getting good juice is so important, a math problem is necessary. Aaron places his bets in Las Vegas and always gets -110 juice on his bets. Bret on the other hand uses an online book and averages -105 on his picks. Each of these players hit at 55% and flat bet $100/game. Let's see what happens after 100 bets:

Aaron has won 55 bets for a gross profit of $4999.50 (which is 55*$90.90, the amount you win for a $100 bet at -110). Aaron, however, has lost 45 bets for a gross loss of $4500. Therefore, Aaron has netted $499.50 for the season.

Bret, on the other hand, has won 55 bets for a gross profit of $5238.20 (55*$95.24). His gross loss is the same as Aaron's for a total net profit of $738.20.

Just by finding a better price for his bets, Bret has made $238 more than Aaron over the course of this hypothetical season. As the number of bets or unit size increases, this disparity will only get larger.

Intuitively, you should be able to see that you can win less bets and make a better profit at less juice. For example, at -110 juice, you need to hit 52.34% of your bets to break even (100*p - 110*(1-p) = 0, solve for p). At -105 juice, you only need to win 51.2% of your bets. So, if you are a 52% gambler, you damn well better be getting the -105 juice or you are going to lose money.

Another concept relating to juice is determining value. This applies more to futures and props and I don't play a lot of them, but it should probably be explained. If you are getting a price of +300 (or 3-to-1) on the Giants to win the NFC East, you need to figure out how often the Giants should win the NFC East for the bet to be profitable. The formula required here is (100-p)/p = odds, where odds are the juice/100. In this case:

(100-p)/p = 3
100-p = 3p
100 = 4p
p = 25

So, the Giants need to win the NFC East 25% of the time for your bet to be profitable. If you think the probability of them winning the division is higher than that, then you should bet on the G-Men.

I realize there was a lot of math in this post. I just wanted to prove a point before recommending certain books to you. The main thing to take away is "low juice is good, high juice is bad." Next week, we'll go over the best sportsbooks, which obviously offer low juice. Hint: Matchbook is one of them.