Implied Probability and No-Vig Lines: Reading the True Market

What is Implied Probability?

Implied probability converts betting odds into a percentage that represents the market's estimated likelihood of an outcome. It's the bridge between odds and probability.

Converting Odds to Implied Probability

American Odds

Negative odds: IP = |Odds| / (|Odds| + 100)

• -150: 150 / 250 = 60.0%

Positive odds: IP = 100 / (Odds + 100)

• +150: 100 / 250 = 40.0%

Decimal Odds

IP = 1 / Decimal Odds

• 2.50: 1 / 2.50 = 40.0%

The Overround (Vig)

When you add up the implied probabilities of all outcomes, they total more than 100%. The excess is the bookmaker's margin.

Example

• Chiefs -150: IP = 60.0%
• Eagles +130: IP = 43.48%
• Total: 103.48%
• Overround: 3.48%

Calculating No-Vig (Fair) Odds

To find the true market probability, normalize the implied probabilities:

1. Calculate raw implied probability for each side
2. Sum them (this will exceed 100%)
3. Divide each by the sum

Example

• Chiefs raw: 60.0%
• Eagles raw: 43.48%
• Sum: 103.48%
• Chiefs no-vig: 60.0 / 103.48 = 57.98%
• Eagles no-vig: 43.48 / 103.48 = 42.02%
• Fair odds: Chiefs -138 / Eagles +138

Why This Matters

1. Finding Value

Compare your probability estimate to the no-vig line:

• Your estimate for Chiefs: 62%
• No-vig market: 57.98%
• You see value on the Chiefs

2. Measuring CLV Accurately

Use no-vig closing lines for true CLV calculation, not raw closing odds.

3. Comparing Sportsbooks

The book with the lowest overround offers the best prices:

Book C has the lowest overround — best prices overall.

Advanced Application: Power Ratings

Sharp bettors use no-vig lines to build power ratings:

1. Collect no-vig closing lines for every game
2. Convert to point spreads
3. Build a model that predicts future spreads
4. Compare your model to opening lines to find value