What is THE VIG?  As in Goodfellas, the scene where Robert DeNiro's character is choking the wig salesman, who initially complains, "what am I crazy I agreed to 5 points above the VIG?....".

Most frequently referenced by people using loan shark transactions. I presume it is some sort of interest rate index, like the prime interest rate in the Wall Street Journal. Hope I spelled it correctly.

Enlighten me, please.  Thanks.  I'll be the first to admit that I watch too many gangster movies.  And I don't mean the ones starring Ice Cube.

Interest on an illict loan.

Quoted: What is THE VIG?  As in Goodfellas, the scene where Robert DeNiro's character is choking the wig salesman, who initially complains, "what am I crazy I agreed to 5 points above the VIG?....". Most frequently referenced by people using loan shark transactions. I presume it is some sort of interest rate index, like the prime interest rate in the Wall Street Journal. Hope I spelled it correctly. Enlighten me, please.  Thanks.  I'll be the first to admit that I watch too many gangster movies.  And I don't mean the ones starring Ice Cube.

The interest rate, or the cost you have to make to keep your head above water.

The interest rate, or the cost you have to make to keep your head above water.

Little fix for ya.

The Vig

Short for vigorish

http://www.bartleby.com/61/84/V0098400.html

The Vig, short for Vigorish, is defined by Webster's dictionary as the following:

   "a charge taken (as by a bookie or a gambling house) on bets; also :
   the degree of such a charge <a vigorish of five percent>"

In layman's terms, The Vig is what gives the casino an advantage over you.  If it weren't for the Vig, casinos would not be able to stay in business and we wouldn't have the famous strip in Las Vegas.

A simple example can be explained using a coin toss.  With a coin toss, the chances of tossing Heads is exactly the same as tossing Tails.  You have a 50% chance of either one.  Therefore, there is no advantage to playing one side or the other.  However, if a casino offered this game, they may charge you $1.10 to play, but only return $1.00 if guessed correctly.  Therefore, if you guess correctly, you win $1.00.  If you guess incorrectly, you lose $1.10.  This would give the casino and edge, or Vig,  of 4.5%.  To calculate this, you would use this formula:

       ((percent chance of losing * loss )  -  (percent chance of winning * win))  /  (amount wagered)  =

       ((.50 * $1.10) - (.50 * $1.00))  /  ($1.10)  =  .045  or

       the house with have a 4.5% Vig on this bet.

You should note that in this example, you are wagering $1.10 to win $1.00.  The same Vig would apply to wagering $1.00 to win $0.91.


www.semibluff.com/Vegas/thevig/odds.htm

ETA: link

It's the fee that goes to the bookie. His cut