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.)

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