Casino Management for Dummies - PayPerHead®
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Casino Management for Dummies

How to create and manage an online casino for profit; a guide for newbies.

Nowadays, most bookies have become online bookies who not only take wagers on sports but also run their own online, digital casinos. The advantages are too great not to take advantage of the additional profits that can be made by keeping your players in action, even when there is no sporting event on. 

Although sports betting bookmakers prefer to stick with what’s comfortable, those who don’t offer casino wagering are missing out big time. Table games and slot machine betting is the most important aspect of any Vegas casino. It’s important for every sportsbook owner to turn the casino on for each of their players.

In this article, we delve deep into casino wagering. What makes casino wagering such a profitable business? What exactly is the “house edge” and why does casino wagering appeal to casual sports betting players?

Understanding casino wagering

Per a report in Bloomberg, the online gambling market should reach $102.97 billion by 2025. The report points to legalized sports betting as a key driver. But sports betting won’t be the only driver. Both sports betting and casino betting should increase.

Casino Players are “Gum Chewers”

There’s a key difference between sports betting and casino betting. Sports betting is like purchasing a big item each and every time. Even casual players don’t wager less than $25, sometimes $50, on a game.

Few casual players bet $10 on games. That’s because sports events like the Super Bowl or games at the NCAA Men’s College Basketball Tournament, are single events. These single events happen on a specific day and at a specific time.

We can consider each sports event the way we would a retail product. Take blow dryers. Most households need one blow dryer. Maybe, two. Nobody buys more than two blow dryers. Players can wager on the Super Bowl once a year.

Now, think about a pack of gum. If you chew a lot of gum, you’re going to chew through a single pack in what? A week? Two-days? Three-days? Gum chewers chew a ton of gum. They chew gum every day.

Casino players are like gum chewers. Most won’t wager what it costs to buy a good blow dryer, $25 to $100, but they do wager what it costs to buy a pack of gum, $2 to $5, maybe even $10 if it’s a really cool pack of gum. And, they wager in the online casino every day.    

Casino profit is “passive” income

Investors consider passive income to be “earnings derived from a rental property, limited partnership, or other enterprises in which a person is not actively involved”. The key part of the statement for bookies is the phrase “not actively involved”.

For comparison purposes, let’s consider your sportsbook. The NFL Season happens once a year. Many sportsbooks live and die based on the revenue they generate during the NFL Season. If players don’t bet on NFL games, some sportsbooks must close shop.

It takes a massive amount of energy for online bookies to manage NFL bets. Pay Per Head offers the layoff account, line mover, Agent Payment System, and other tools to help agents maximize sports betting profit. It’s up to the agent to use those tools to ensure profit.

That’s not the same for the online casino. Pay Per Head offers two different kinds of casinos. The first is a traditional, online, mobile casino that players can access and play on their own. The other is a live casino with live dealers. Both require only some effort from you, the bookie.

That’s what makes casino profits passive income.

Full-Time casino players are also a big part of any serious bookie’s package

Your regular casino players typically wager every day. It’s a good idea to treat these players the way you treat your professional sports bettors. Although they might only wager $10 dollars a day, don’t worry. That $10 adds up. It can add up to a lot. Here’s the math to prove it.

$10 x 30-days = $300

$300 x 5% online casino revenue = $15

$15 x 12 months = $180

$180 x 10 players = $1800

The $1,800 is passive income in a year for 10 players who wager an average of $10 a day. 5% is your revenue. That’s a conservative estimate. We’ll get into that later. With just 10 casino “gum chewers” a bookie could make an extra $1,800 a year (conservatively) by offering casino wagering.

It doesn’t sound like a lot but you mustn’t forget that this is passive income. You’ve made $1,800 a year for turning the casino on for 10 casino players. That’s pretty much it.

Also, the example doesn’t add casino revenue from casual online casino players and sports bettors you turn into casino players. Before getting into that, let’s talk about the casino itself.

The house edge is your edge

Every casino game has what we call the “house edge”. The house edge means the odds favor the casino. The odds are greater that the casino wins the player’s money than the odds on players winning the casino’s money.

This built-in-edge belongs to you, the online casino operator. What the edge implies is that in the long-run, you make a profit on your online casino. It doesn’t matter what game on which your players wager. It doesn’t matter when they wager. It doesn’t matter how much they wager.

All your players must do is wager. If you bring in consistent casino action, the online casino will make a profit. You don’t need a layoff account, line mover, or to set a schedule limit override. That’s the power of the house edge.

See below for a list of the house edge for the most popular casino games.

American Roulette              5.26%

Baccarat                              1.01% – 15.75%

Craps                                   0% – 16.67%

Keno                                   20% – 40%

Slots                                    2% – 15%

Video Poker                        .46%

Caribbean Stud                   5.22%

Notice that craps provides a wager with a 0% edge. Rest assured. There’s a catch to that 0% edge. The wager is the “craps odds wager”. To make the craps odds wager you must either bet on the Don’t Pass Line or Pass Line on the come-out roll.

In craps, a Pass Line wager means the shooter rolls the point, a 6, 8, or whatever the established line is, before rolling a 7. If the shooter rolls a 7, the player who wagered on the Pass Line loses. A bet on the Don’t Pass Line means the shooter craps out, rolls a 7, before rolling the established point.

Looks like that even with the craps odds wager there’s a hidden house edge!

Drop vs handle vs revenue

It’s important to know the difference between “drop” and “handle”. Drop refers to the amount of money a player puts into a casino game. Handle refers to the amount of money a player wagers in totality during a single gameplay session.

Let’s use a slot machine session as an example.

The player inputs $100 into the slot machine. The player ends up winning back $20 on the first pull of the slot machine handle. Feeling lucky, the player wagers again. This time the player loses the $20. Now, the player wants to win back the $20. The player keeps betting until she’s exhausted the entire drop, or the entire $100.

In the above example, $100 is the drop. $120 is the handle. The $100 is the casino’s profit.

If the player had taken $50 out, the profit to the casino would have been $50. Now that we understand casino betting profit, it’s time to turn our attention to the main difference between online sportsbook profit and online casino profit.

Sportsbook profit vs casino profit

Although sportsbooks are lucrative ventures, the profit arrives in the form of bookie fees. The goal of most sportsbooks is to get the same amount of money wagered on both sides of a proposition. With the same amount of money wagered on both sides, bookies keep all charged fees as profit. They pay off the winning side with the losing side.

That’s why bookie businesses always make money. If they manage wagers the right way, use their layoff account, line mover, set override limits, etc., pay per head agents can’t lose money. But managing a sportsbook requires time. Managing your players requires time, which is why we can call sportsbook profit services rendered profit. It takes a certain type of customer service to keep sports betting players happy.

In the casino, the games themselves provide profit. All casino operators must do is turn on the online casino for their players. They can adjust wagering limits if they worry about casino players betting too much. Or, they can cut off casino players that they think are betting too much.

But they don’t actively manage those players or manage the actual games on which those players wager. Retail profit is great because whatever you sell the retail product for after costs of goods sold is profit. Casino profit is great because a company like Pay Per Head has created the “product”, the casino games, for you.

A way to think about it is to consider two types of restaurants: the 5-star restaurant and the fast-food joint. When you put on your per head agent sportsbook hat, you’re the 5-star waiter at a restaurant. When you put on your casino agent hat, you’re the cashier behind the counter at a fast-food joint.

With your casino agent hat, once you hand the player her “burgers and fries”, your job is over. Why? The house edge in every game ensures that in the long run, your online casino makes profit.   

How to market to casual sports betting players

It’s difficult to get pro sports betting players to wager in the online casino. Pro sports betting players know what they want. They’ve created specific betting methods that make them pro players. If a pro player wants to wager in your online casino, they’ll let you know.

But you can convince casual sports betting players to wager in the online casino. There’s a reason commercial casinos, tribal casinos, and U.S. online gaming all grew from 2017 to 2018.  U.S. online gaming grew from $247.5 million to $306.5 million.

Check out how to market your casino to casual players.

Online casino gaming is low-cost entertainment

Casual players don’t bet a lot. When it comes to sports, they almost never bet on a game they can’t watch. In sports, the definition of a casual player is someone who wagers $50 or less, on average, on a game.

Casino betting is perfect for these casual players. Tell your casual players that they can wager hands of blackjack for $5. The low-cost entertainment angle should get players to log on. 

Mobile casino gaming is more profitable than ever

Nobody wants to travel to place wagers. That’s why online gaming is the fastest-growing sector in the entire gambling industry. Why travel when you can sit at home and play on your desktop?

But, it’s not just the ability for players to access casino games on their desktops.

They can also play on their mobile phones.

A player takes their car into the shop for a simple oil change. The mechanic tells the player she’s looking at 1 to 2 ½ hours before her car is ready. What will the player do? She could go through the trouble of calling Uber or Lyft, going home, and then rushing back after 15 minutes. Or, she could log onto the online casino and place a few wagers.

She will likely do that latter

Promote live casino dealers

It’s important that whichever pay per head company you decide to work with that the company offers live casino dealers. Live dealers have become a signature difference between “A” per head organizations and “B” per head companies.

Not all casino players want to bet with a live dealer. Also, slot machine players don’t care about live dealers. But you must give your players the option. Live dealers encourage players to bet more and longer. They put players’ minds at ease.

Make sure you can provide your players that “blackjack table feeling” with a live casino.

Profit From Your Online Casino

The online casino provides agents massive advantages. The first and most important is that every casino game has a house edge. A house edge means that in the long-run, all casino games lead to profit. Not only that but pay per head casino agents mustn’t manage online casinos the way bookies manage sportsbooks. Casino profit can become passive income. That alone makes online casino betting worth marketing.

Pay Per Head provides agents access to an online casino. All agents must do is turn on those casinos. With minimal marketing, per head agents can score consistent table games and slot machine profit. Any questions? Contact a Pay Per Head rep at 800-605-4767.

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