Pay Per Head Bookie Business For Dummies
The term bookie has been around for a long time, but many don’t know what a per head bookie is so today we’re doing a dummies guide to explain. Sports bettors place wagers in sportsbooks and bookies run sportsbooks; but how does a bookie run a book without a huge overhead operation? Nowadays, anyone can run a successful online sportsbook by becoming a per head bookie.
Sportsbook terms: What all per head bookies must know.
We’ll start this Per Head dummies guide to becoming a bookie by looking at terminology. We’ve all heard the term “book;” we use the term when we make reservations for a flight, schedule an appointment with a doctor, hairdresser or spa, or reserve a table at a restaurant. To “book” means essentially to make a reservation.
A bookie “reserves” a sports bettor’s wager. The bookie “books” a sports bettor’s wager on Team A to cover the spread. If Team A covers the spread, the bookie pays out the initial bet and winnings.
When a bookie reserves bets, the bookie “takes action”. Bookies make money taking action. Like a travel agent who collects a fee to book a hotel stay, the bookie collects a fee to book the wager. We call the fee the bookie collects “juice”, or “vig”.
Bookies make money by taking action. The more action they take, the more money they make. Sportsbooks try to take the same amount of action on both sides of a spread. Sportsbook operators use the losing side of bets to pay off the winning side. The bookie collects the fees associated with both sides. They collect fees on winning wagers. Bookmakers also collect fees on losing wagers.
Most sports bettors place either against the spread bets or Moneyline bets. With against the spread wagers, the bettor’s team must win or not lose by a set amount of points. With Moneyline wagers, the bettor’s team must only win the game.
Why sportsbooks are great businesses with just a bit of risk
Most start-ups are unprofitable. Some start-ups never make a profit. After a decade, some start-ups struggle for cash flow. From day one, many sportsbooks make a profit and won’t struggle with cash flow.
Bookies provide a service. Their clients pay a fee for that service. Bookies make money from service fees. Most times, bookies don’t care which team covers the spread. They don’t care which team wins.
Bookies often charge 10% per wager. Again, that doesn’t matter on which side of a spread the sports bettor has wagered. At 10%, the bookmaker bookie makes $10 for every $100 wagered. Think about all those $10 dollar fees adding up over days, weeks, months, and years. Check out an example of how this works.
If a bookie accepts $1,000 on a game, the profit is $100. If a bookie accepts $2,000 on a game, the profit is $200. That’s how we calculate profit for against the spread wagers. We calculate profit for money line wagers a different way.
Profit from Moneyline wagers are the wagers themselves. If someone bets $600 on Team A to beat Team B, the bookie’s potential profit and potential loss could be $600. It depends on the Moneyline odds. Here’s an example:
Sports bettor wagers $100 on Team A at even money odds to beat Team B. Team A beats Team B. Payout is $200. The bookie’s loss is $100.
Here’s an example with odds other than even money:
Bettor wagers $100 on Team A at -120 odds to beat Team B. Team A beats team B. Payout is $180. The bookie’s loss is $180. Odds of -120 means it takes $120 to make a $100 profit. If the bettor only wagered $100, the profit is only $80.
Sportsbook operators face risks on both ATS and Moneyline wagers. It’s almost impossible to even out both sides of a Moneyline bet. Bookies don’t want to do this, anyhow. Evening out both sides of an ATS wager also is hard.
Don’t become discouraged, though. A revolution in the sports industry has destroyed almost all bookie risk.
How Per Head revolutionized bookmaking for dummies
Pay per head tools like the layoff account end bookie risk. Bookies can off-load risk via their layoff accounts. When it comes to Moneyline risk, bookies have a tool for that. Pay per head allows bookies to take bets off the board and they can also adjust Moneyline odds, making it easy for even dummies to use.
Not only that but pay per head tools allow bookmakers to set max betting limits on any wager they offer. That’s a good segue for us to turn to the pay per head bookie and how he differs from the traditional bookie.
Traditional bookie vs Pay Per Head bookie.
Contrary to Hollywood movies, most bookies never became violent with their clients. If they harmed a client, that client couldn’t pay. Most bookies ran a side bookmaking business out of other brick and mortar businesses. They weren’t nefarious the way the movies made them out to be.
If someone couldn’t pay the bookie, the bookie had a couple of choices. First, the bookie could write-off money owed. Second, the bookie could set up payment terms. Setting up payment terms gets the bookie the money. But, it’s a hassle. Collecting was a hassle. Bookies had to travel to specific locations at a specific time. They had to hope that the person who paid them had the right amount. Hassles.
Bookmakers also faced issues placing wagers for their clients. How would they notate the wager? Should they use a pen and paper? Should they use Microsoft excel? Should they use a chalkboard.?
Pay per head changed that.
Pay per head bookies pay a small fee “per head” for the right to use a sportsbook interface. The interface includes bookmaking software that helps bookies run their businesses. Also, PPH sportsbook operators can offer more betting options.
Not only that, but pay per head allows anyone to run a profitable sportsbook online. Even non-sports fans can run a sportsbook business.
The best per head bookie software provides at least the following:
· Layoff account – Bookmakers can layoff risk. They do this by using a layoff account.
· Easy payouts and deposits – Cash flow is the lifeblood of any successful business. More deposit and payment options lead to more action. More action leads to more flowing cash.
· Control betting limits and lines –Pay per head bookies control how much clients wager. They control lines offered. Per head bookies can even control payout limits.
· Betting options –The best per head software provides wager options. Players can bet on more than football and basketball. Per head software must also allow live wagering. Wagering on games while they happen has become a huge moneymaker for online sportsbooks.
· Betting interface – Sports bettors can wager when they want. The software makes it easy to place wagers.
· Safety and customer service – Bookies’ and their clients’ information remains safe.
· Business management tools – Bookies run businesses. To run their business, bookmakers need business management tools. Pay per head provides those tools.
Pay per head didn’t change what bookmakers do. They continue to “reserve” wagers for sports bettors. It did change how bookies reserve those wagers. It made the sportsbook industry more accessible for individual bookies.
5 Things successful Pay Per Head bookies do
Pay per head won’t allow all sportsbook operators to compete on a global scale. Big companies spend more on marketing than small companies. That’s true for any business. You may never compete against the large online sportsbooks. You can become a successful local bookie, though.
Check out 5 things that bookies must do no matter what.
1. Never forget they provide a service
Successful bookie entrepreneurs know they provide a service. All service industries place an emphasis on customer service. You may never cater to big-dollar players. That doesn’t mean you don’t provide great customer service.
Small bettors have as many options as big bettors. One of your clients could decide to play with an online sportsbook instead of you. Provide great customer service to prevent that.
2. Think like CFOs
Companies like PayPerHead and Boss Action offer plenty of money management tools. Chief Financial Officers think about the top line, revenue, and the bottom line, profit. You should also think about the top line and bottom line. You won’t sell shares in your company, which means the bottom line is more important than the top line. But, think about both.
3. Uses their bookmaking tools
Use as many per head tools as possible. Great pay per head companies don’t offer useless tools. Pay per head offers an Instant Action Ticker. Once you know a player has wagered a large amount, should you set max betting limits? Should you change the betting line? Should you use your layoff account?
How will using your layoff account affect your potential bottom line? Ask yourself tough questions. Use PPH tools to answer those tough questions.
4. Know when to use their layoff account
A layoff account is a tool. The most successful bookies know they can’t overuse their layoff account. Overuse leads to lost profit. Also, you aren’t a sports bettor. You don’t gamble. You provide betting services. Use the layoff account the way you should and dummies are virtually guaranteed a per head profit.
5. Build their business from the local bookie level
You might always remain a local bookie. That’s okay. If you have bigger dreams, that’s also okay. Hone your bookmaking skills with your local clients. Build if you wish.
Dummies nuts and bolts for a successful online sportsbook with per head software
Time to turn our attention to sportsbook revenue streams. On what should a bookie concentrate his efforts?
The sportsbook is your bread and butter
U.S. sportsbook players by far wager on football. They wager more on college and NFL football than all other sports combined. Concentrate most of your efforts on football. Once football season ends, turn to basketball. Then, once basketball season ends, turn to Major League Baseball.
While concentrating on other sports, keep an eye on the NFL. The new season after the Super Bowl starts in early March. The NFL Draft happens in April. The regular season starts in September. Sports bettors wager on the NFL Draft and preseason games. Start NFL promotions early. Don’t miss out.
Consider opening the racebook
Promote the Triple Crown. Consider offering daily horse betting. If you decide to open the racebook, make sure to set win limits. Major online sportsbooks do this. The most possible to win on a Pick 4 often is 300 /1. To be safe, only offer win, place, show betting and exacta and trifecta betting. Don’t offer racebook bets that can cripple your sportsbook. If you’re worried, don’t turn on the racebook.
Open the digital casino
Open the digital casino to all players. You can set betting limits on casino players. The casino can lead to small profit on a daily basis. Small profit adds up to big profit.
Offer live betting
Live betting is the fastest growing bookie money maker in the industry. Offer live betting to your customers. PayPerHead bookies can offer TruLive Wagering. The service allows live betting on international and domestic sports.
Ready to run your own per head sportsbook dummies?
Thanks for reading our dummies guide to becoming a pay per head bookie. No longer must local bookies run their sportsbooks in the back of brick and mortar stores. They mustn’t do business over the phone and keep Microsoft Excel ledgers. Pay per head allows bookies to run efficient businesses.
It also allows anyone to become a bookie if they wish. Non-sports fans can also run successful sportsbook companies. Companies like PayPerHead and Boss Action have leveled the playing field. People who had no idea about sports betting become experts overnight.
That’s per head’s power. When you’re ready to run your own sportsbook, call a PayPerHead rep at 800-605-4767.