The Mathematics of Bookmaking

In the gambling world, vigorish refers to the amount charged by a bookmaker, or bookie, for taking a bet from a gambler. We found the following formal definition of vigorish on the walls of a tavern in the Old Town section of Chicago: “Vigorish percentage can be defined in a way independent of the outcome of the event [being bet on] and of the bettors’ behavior by defining it as a percentage raked in a risk-free wager. This definition is the rake of the bookie as a percentage of total bets received if the bookie has balanced the wagers so that he makes equal profit regardless of the outcome of the event.” (The formula above applies to a two-outcome event.)

This entry was posted in Bayesian Reasoning, Games, Probability. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s