The Vig

[vintage68]

Okay, so I've watched a LOT of movies, and in several of them I hear actors talking about "the vig". Take for instance this evening: I'm (re)watching Carnivale, and one of the actors says something to the effect of "You owe me $400 for the vig on top of the principle".

So what does "the vig" mean, and where does the term come from? Is it simply interest? What the??!!!

 

[Miss Neecerie]

ahh the joys of google

Okay, so I've watched a LOT of movies, and in several of them I hear actors talking about "the vig". Take for instance this evening: I'm (re)watching Carnivale, and one of the actors says something to the effect of "You owe me $400 for the vig on top of the principle".

So what does "the vig" mean, and where does the term come from? Is it simply interest? What the??!!!

The first link when you google it is Wikipedia, which says

Vigorish, or simply "vig", or "juice", is the amount charged by a bookmaker for his services. The term is Yiddish slang originating from the Russian word for "winnings," vyigrysh. The concept is also known as the overround.
Bookmakers use this concept to make money on their wagers regardless of the outcome. Because of the vigorish concept, bookmakers should not have an interest in either side winning in a given sporting event. They are interested, however, in getting equal action on each side of the event. In this way, the bookmaker minimizes their risk and always collects a small commission from the vigorish. The bookmaker will normally adjust the odds (or line) to attract equal action on each side of an event.
It is simplest to assume that vigorish is factored in proportionally to the true odds, although this need not be the case. Under proportional vigorish, a moneyline odds bet listed at -100 vs -100 without vigorish (fair odds) could become -110 vs -110 with vigorish factored in. Under disproportional vigorish, it could become -120 vs +100.
Common misconceptions about vigorish are that it is paid by only the "loser", only the "winner", or both in all circumstances. A claim on when and to what extent a gambler pays vigorish fees, however, cannot be abstracted from an individual gambler's behavior. A gambler's behavior with respect to different odds on an event must first be defined and only then can a determination be made on how the vigorish affects him when he wins and loses.


More about it below:

http://en.wikipedia.org/wiki/Vigorish

 

[carebear]

More generically, vig is the interest charged by a shylock.

As in your example, if I loan you 10 grand for a month I'm probably going to be asking 4 or 5% vig weekly. Now that's $500 a week, and you are borrowing $10K so you probably don't have the 5 anyway.

But that's okay, because I'm such a nice guy and a soft touch, I'll loan you the vig as well, with interest. All I'll need is some collateral, say the title to your car. Or maybe 25% of your gross business receipts.

Something fair.

 

[MrNewportCustom]

carebear, don't forget to compound the vig and the interst on the 10k every week. You're cheating yourself out of a lot of green if you don't.


Lee
______________

"A fool and his money are soon elected."

 

[Miss Neecerie]

More generically, vig is the interest charged by a shylock.

Well yes, I knew there was more to it...hence the link to the actual wiki...so he could go read the rest himself.

 

[carebear]

Well yes, I knew there was more to it...hence the link to the actual wiki...so he could go read the rest himself.

I wasn't trying to be picky with your post. From my reading the wiki doesn't really address the interest definition. It's pretty tightly about the gambling. There's just that last line about investment bankers.

I wanted to make sure he got the more common (in my experience) loan sharking definition.

carebear, don't forget to compound the vig and the interest on the 10k every week. You're cheating yourself out of a lot of green if you don't.

That goes without saying...

 

[vintage68]

Thanks guys, I knew I could count on this group!

 

[Miss Neecerie]

or google...

you can generally also count on google

 

[Flitcraft]

What they also left out is that you pay the "vigorish" up front- so if you borrow "ten long" ($10,000.00) at 10% interest, you pay $1,000.00 up front and actually only walk with $9,000.00. Most guys will let you slide a long time on the principal, as long as you keep paying the interest every week.
A lot of poor people have no other option than to borrow this way, but you can see how at even 10% (which is a really great rate) that what the borrower ends up paying back can exceed the initial loan many times over.

 

[MrNewportCustom]

What they also left out is that you pay the "vigorish" up front- so if you borrow "ten long" ($10,000.00) at 10% interest, you pay $1,000.00 up front and actually only walk with $9,000.00. Most guys will let you slide a long time on the principal, as long as you keep paying the interest every week.
A lot of poor people have no other option than to borrow this way, but you can see how at even 10% (which is a really great rate) that what the borrower ends up paying back can exceed the initial loan many times over.

Which is exactly why I got myself out of credit card debt! 19%, 20%, 21.9%! I'd rather risk a broken leg than have to pay that kind of interest again! (No, I'm not getting a loan from a shylock! lol)


Lee

 

[vintage68]

or google...

you can generally also count on google

Yeah, but why Google when you can Fedora?

 

[Flitcraft]

Yeah, but why Google when you can Fedora?

Exactly!

 

[Flitcraft]

Which is exactly why I got myself out of credit card debt! 19%, 20%, 21.9%! I'd rather risk a broken leg than have to pay that kind of interest again! (No, I'm not getting a loan from a shylock! )

lol lol lol
I remember one of the episodes of The Sopranos had Tony commenting on how the credit card companies had stolen that idea from the Mob!!

 

[vintage68]

Reminds me of those "payday loan" places, charging an estimated 5000% interest. The mob doesn't have anything on those guys, except maybe you get to walk around on your legs a bit longer.....