Every quoted market costs more than it should, and the gap is called the vig. Learning to measure it is the single fastest way to tell whether you are trading somewhere reasonable or paying a bookmaker's margin without noticing.
The good news for anyone reading this on a prediction market site: the vig on Kalshi or Polymarket is typically a fraction of what a sportsbook charges. The useful news is knowing how to check rather than taking that on faith.
What vig actually is
Quote both sides of a two-way market and the implied probabilities should add to exactly 100%. The event either happens or it does not.
They never add to 100%. A sportsbook offering −110 on both sides of a spread is implying 52.4% on each, which totals 104.8%. That extra 4.8 points is the overround, and the share of every dollar it represents — 4.8 ÷ 104.8, or about 4.6% — is the vig, also called the juice or the hold.
It is not a fee line on your statement. It is baked into the prices, which is precisely why most people never see it.
Measuring it on a prediction market
Prediction markets make this easier than sportsbooks do, because contracts are quoted in cents and a cent price is the implied probability. No conversion needed.
Say a market shows YES at 54¢ and NO at 49¢. Add them: 103¢. The book implies 103% probability across an event that can only be 100%, so the overround is 3 points and the hold is 3 ÷ 103 = 2.91%.
Run that on any market you are about to trade. Our vig calculator does the arithmetic and strips the margin out in the same step.
Stripping the vig out
The overround tells you what the market costs. The no-vig price tells you what the market actually thinks, which is the number worth comparing against your own view.
The standard method is multiplicative: divide each side by the total. From the example above, 54 ÷ 103 = 52.4% and 49 ÷ 103 = 47.6%. Those are the fair values with the margin removed.
One caveat worth knowing. The multiplicative method assumes every outcome is marked up by the same proportion, which is a simplification. On lopsided markets — a heavy favourite against a long shot — it tends to flatter the favourite slightly. There are more sophisticated approaches, but for anything near even money the difference is negligible and the simple method is what nearly everyone uses.
Why prediction markets hold less
A sportsbook takes the other side of your bet. It needs a margin because it is the counterparty, carrying risk on every position, and that margin is the business model.
A prediction market matches you against another user. It has no position, so it needs no margin — it charges an explicit fee instead. That structural difference is why a liquid market on Kalshi or Polymarket often holds under 1% where a sportsbook line holds 4–5%.
The comparison is not quite apples to apples, because prediction markets do charge fees on top. Polymarket takes 0.75–1.80% from takers; Kalshi charges a per-contract fee. Add those back and the all-in cost is still usually lower, which is the case our prediction markets vs sports betting piece works through with numbers.
When a wide vig means something different
A high hold on a prediction market usually is not a venue taking a cut. It is an absence of people.
On a thin market — a minor league game, an obscure award, a long-dated political contract — the bid and ask sit far apart because nobody is competing to quote tighter. Measure the vig there and you get a big number, but it describes illiquidity rather than a margin. The practical consequence is the same, though: crossing a wide spread costs you real money, and it is a cost no fee table will show.
This is why a zero-commission venue is not automatically cheaper. A platform charging nothing on a market where the spread is six points wide is more expensive than one charging a small fee on a market quoted a point wide.
Using vig to compare venues
Here is the check worth running before you commit capital anywhere.
Take the same event on two venues. Measure the overround on each. The one with the tighter book is the cheaper place to transact, regardless of what the advertised fee schedule says. Then add each venue's fee to get the all-in cost.
That comparison is exactly what our live odds comparison automates across Polymarket and Kalshi — it tracks both books on the same markets and flags where they disagree enough to matter.
Occasionally the two sides across two venues sum to under 100%. When that happens, buying both legs costs less than the dollar they settle for, and the difference is locked in regardless of outcome. That is genuine arbitrage rather than a pricing quirk, and our arbitrage scanner surfaces those automatically with fees already deducted.
A worked example
You are looking at a market on both venues.
Kalshi quotes YES at 46¢ and NO at 55¢. Total 101¢, overround 1 point, hold 0.99%.
Polymarket quotes YES at 51¢ and NO at 50¢. Total 101¢, overround 1 point, hold 0.99%.
Same hold, but the mid-prices disagree: Kalshi's fair value lands near 45.5% and Polymarket's near 50.5%. That is a five-point disagreement between two liquid books, which is either an opportunity or a sign that the two venues are pricing subtly different resolution criteria. Check the rulebooks before assuming it is the former.
What to take from this
Vig is the cost you do not see on the receipt. On prediction markets it is small, but it is not zero, and on thin markets it is the dominant cost of trading — larger than any fee and larger than most edges people think they have.
Measure it before you trade. Strip it out to see what the market really thinks. Then compare that number to your own view, which is where expected value picks up.
Frequently Asked Questions
What does vig mean?
Vig, short for vigorish, is the margin built into a market's quoted prices. If both sides together imply more than 100% probability, the excess is the overround, and the vig is that excess as a share of the total.
How do you calculate vig?
Add the implied probabilities of every outcome. Subtract 100% to get the overround, then divide the overround by the total to get the hold. On a market quoting 54¢ and 49¢, the total is 103%, so the vig is 3 ÷ 103 = 2.91%. Our vig calculator does this and removes the margin in one step.
What is a normal vig on Polymarket or Kalshi?
Under 1% on liquid markets, often a fraction of that on the deepest books. That compares with 4–5% on a typical two-way sportsbook line.
What does no-vig fair value mean?
The probabilities with the margin removed, scaled so they sum to exactly 100%. It is the market's actual opinion, and the number worth comparing against your own estimate.
Is low vig the only thing that matters?
No. A venue with no commission but a six-point-wide spread costs more than one with a small fee and a tight book. Compare the all-in cost — spread plus fee — using our fee calculator.
Can vig ever be negative?
Across a single venue, effectively never. Across two venues it can be: when the cheapest YES on one and the cheapest NO on the other sum to under 100¢, the pair returns more than it costs. That is arbitrage, and our scanner tracks it live.
