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Active Management

Blackjack

Craps

How Much?

Lotteries

Luck

Odds of Success

Poker

References

Roulette

Skill?

Vigorish

Why?

Contact

Vigorish (also known as the vig, juice, or the take) is the amount charged by a bookmaker, or bookie, for his services. In the United States it also means the interest on a shark's loan. The term is Yiddish slang originating from the Russian word for winnings (Source: Vigorish at Wikipedia).

The Vigorish in gambling is analogous to investment costs in investing. In fact, John Bogle often uses the term croupier (meaning casino dealer) for the investment industries "take". The table below summarizes various negative sum games ranked by the vigorish. For casino games, the vigorish is pretty straight forward. For investing in asset classes, the costs incurred are the vigorish. The critical distinction is that in investing, there are two steps. First is choosing an asset class. Then comes the decision of investing passively in a broad index in that asset class or investing actively in an attempt to outperform that index. That attempt is called active management and by definition is a zero-sum game before costs. The costs of playing the active management game are the Vigorish.

Keep in mind the numbers below make certain assumptions. I've seen estimates of the average blackjack player giving the house a -2% advantage (the average player does not play "basic" strategy). The active management figure below is an average per year.

• Typical House Advantage table from Insidevlv.
• House Edge (and standard deviation) at WizardofOdds
• House Edge Percentages, Understanding The House Advantage, and Ten Best Casino Bets at About.com
• Casino Game Odds at Fastodds.com
• Investment Costs

The SumGames Vigorish Table (using typical rules - there are many variations)

Sum Game	Skill?	Vigorish	Notes
Craps Pass + 100XOdds	No	-0.021%	100 X Pass line odds
Blackjack Single Deck	No	-0.20%	Using "Basic" strategy (no card counting)
Blackjack Six Decks	No	-0.60%	Using "Basic" strategy (no card counting)
Craps Pass + 2XOdds	No	-0.61%	2 X Pass line odds
Active Stocks (US)	Yes	-0.67%	Annual Active Investment Costs estimate per Ken French
Roulette 0	No	-2.70%	Single Zero
Poker	Yes	Rake	None if playing with friends. Online Rake Charts
Sports Betting	Yes	-4.55%	Bet $11 to Win $10
Roulette 0+00	No	-5.26%	Double Zero
Keno	No	-27.0%	Typical (common range from 25-29%).
Lottery	No	-50.0%	Vigorish varies by sponsor (typically half goes to the prize pool).

 

 

 

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