The Cost of Pay to Play

Sports gamblers all realize there is a “pay to play” cost associated with placing bets, whether in Vegas, offshore or a local book. Known as the vigorish or juice, the cost is that a straight bet pays out less in winnings than what is paid in for losses. A 10% juice is the standard vig for straight bets and means a bettor must risk in $11 to win $10 ratios. For an 11-10 wager, a losing bet costs the gambler $11 while a winning bet nets a $10 gain.

The required winning percentage for straight bets with 10% juice and all wagers being of equal value is 52.4%. Otherwise known as the breakeven point, straight game bettors must pick 11 winners out of every 21 games to straddle the line between profit and loss. Picking 50% winners is therefore a losing proposition for the gambler, but a winning proposition for the sportsbook. Hence, the sportsbook enjoys a house advantage with every placed bet. Put another way, the sportsbook has a built-in margin of error to help sustain a losing streak with no significant long term adverse impacts. Oh, the everyday gambler should be so lucky.

Thus, the gambler must win at an above average rate to overcome the vig and reap winnings. But, is 52.4% the true breakeven point? Not if you are paying for pointspread picks. Gamblers who enlist professional handicapping advice do so at a price. Thus, the pay to play costs increase even more. Now, the gambler must realize that 52.4% winners is not good enough to stay out of the red.

For example, consider a pro capper who touts a recent pointspread record of 11 winners and 9 losers for 55% winners. From the capper’s perspective, assuming all the selections were of equal value, this 55% winning percentage is certainly being advertised as a winning period. The capper can even claim that the selections have netted a plus 1.1 betting unit with all equal wagers and 10% juice. The plus 1.1 unit is computed by (11 minus 9) minus (10% times the 9 losing bets) equals 2 minus 0.9 equals plus 1.1 unit.

Why only 55% winners you ask? Because it is a realistic long term winning percentage for a professional capper. Forget about the outrageous claims of 60% or more when projecting over the long term. Remember, the single biggest mistake made by sports gamblers is focusing short term and not seeing the big picture of the long term. The tout services capitalize big time on the shortcomings of the short term outlook of many a gambler.

Unfortunately from the gambler’s perspective, the +1.1 unit does not factor in the money paid for the selections. The bettor who paid out money for these 20 selections certainly does not end up with plus 1.1 unit, but rather plus 1.1 units minus the amount of money paid to the pro capper. How can we quantify this action?

Let’s say these 20 paid selections were over a month of the NFL season (five picks per week) and a typical NFL monthly plan charges about $275. On the surface, this doesn’t appear excessive as it computes to $13.75 per pick. At the conclusion of the month, the bettor is at +1.1 betting unit minus the $275 for the handicapping service. Thus, unless the bettor is wagering $250 ($275/1.1) or more per game, the bettor has a losing month.

Using the above scenario, a $100 player would have lost $165, a $200 player would have lost $55 and the $250 player would have broke even for the month. In contrast, the pro capper is touting a winning month at 55% winners.

Looking at these numbers, unless a gambler can afford to wager at least $300 per game in the NFL, paying for selections may not be an affordable option. And don’t fall victim to the cappers who are quick to throw in baseball, basketball and college selections as well in order to increase the number of plays to reduce the per game paid selection fee. This is fine if the winning percentage is still in the 55% range after all these extra selections. If not, you may be digging a deeper hole.

Exercise caution with a “shotgun” handicapper whose claim to fame is “any sport anytime.” You don't want to pay for a jack of all trades who makes pick after pick, day after day in any and all sporting events. You want to pay for a specialist, that is a capper who truly specializes in a particular sport and has a bonafide winning track record over the long term.

It is my opinion that the smaller players would be better served doing their own research from publications and websites to formulate their own informed pointspread selections. There are numerous weekly publications that provide excellent handicapping information for the NFL games and they cost a lot less than paying a handicapping service.