Given a two-way market, how to calculate house rake?
Example:
Given the moneyline for 2025 World Series Game 6 is:
Dodgers: -138
Bluejays: +118
1. convert American odds -> decimal odds
-138 -> 1 + 100 / 138 = 1.72
+118 -> 1 + 118 / 100 = 2.18
2. convert Odds -> Probability
1 / 1.72 = 0.58
1 / 2.18 = 0.46
3. Summate probabilities
0.58 + 0.46 = 1.04
4. Analysis
House is taking 4% 'vig'.. or 'rake'.. or 'cut' from this particular bet by taking bets from a wider range than is possible. 4% from a simple two-way market. The rake becomes much much **much** higher when users submit parlays.
Most gambling platforms are parasitic blood-sucking vampires. But, they make a shitton, and therefore is the most lucrative, easy, and lowest hanging fruit for people.. so we see celebrity make the mistake to shill it out... & also far too many builders focusing on it.
This presents how important transparency is. In the endgame, gambling is all PVP, and the platform is simply noise. It is cool to analyze and try to predict the future, but it can be done in an ethical way (but hurts marketing spend). My recommendation is to be clear on rake structures - an aspect performed extremely well by Poker platforms & venues.
i always wonder what people could be doing better with their time which is more fun, constructive, meaningful.
src
https://www.youtube.com/watch?v=9Ii1ROzeSwU
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