If you’re on this page, it’s likely that you have been spending a bit of time thinking about starting your own bookmaking business and are wondering how to start a bookie business and website. Well, in this article, we will be going through everything you need to know about becoming a bookmaker and creating your own sportsbook business venture.
A sportsbook business works by taking bets and commissions from the sports betting site. Then, the sports betting site will take a small amount of money from your wins. This makes sure that the bookie gets a guaranteed amount of money at the cost of the sports bettors wager.
So, if you want to find out how to go about starting your own sportsbook online business, here’s what you need to think about before you begin your business journey.
The Bookmaker: What is It?
When we use the term ‘bookmaker’ we are generally talking about a business or company that takes and pays out on sports events and other entertainment or public interest events at pre-set odds. As well as placing bets, some bettors even ask a bookie to lend them money.
A bookmaker then sets and adjusts the odds in order to maintain a balance in the books so there are about the same number of punters that win and lose.
What it Takes to Start a Bookie Business
Here are some of the things you need to consider when you are thinking about starting up a high-risk sportsbook business…
Your two main concerns to focus on will be legitimacy and money. You will need to make sure that at every single step, you follow the necessary legal procedures to start up your bookie business. You will also need to make sure you have a cash reserve that is appropriate for the business.
The Legalities of Starting an Online Sportsbook
Obviously, each different country has its own laws and regulations regarding online sportsbooks – and in the US, the rules can vary from state to state. In some regions it’s perfectly legal, in others it isn’t.
As such, we would recommend you research the legality of it based on your location and you can do so in different ways. Look at your country or state’s local government website and check out the local betting regulations. If in doubt then you might consider contacting a professional attorney that is experienced in the gambling, iGaming, casino gaming and sports betting industry for more in-depth information.
Money: How Much Money You Need to Get Started
Having a solid cash flow is vital for any business and that is true of sports betting. It is needed to cover your overhead expenses like rent, utilities, software and payroll etc. However, paying out winning bets is a bookie’s main responsibility. For a losing bet, the bookie will collect the commission, and bookmakers will use the losing bets to pay out the winning bets.
You should keep in mind when you start a bookie business that there will be additional costs and fees at the start – and you will need to pay for a valid license in order to start your own sportsbook.
Your market position will very much depend on how much money you invest into starting your business. The more you put in, the more you will get out and the better your position will be.
Obviously, more casual bettors spend a lot less money than professional bettors. So depending on your clientele, you may need a startup fund anywhere between $5,000 up to $10,000 – or even more. You should not consider opening up your bookie service for professional bettors unless you have a $10,000 minimum in your reserve.
How to Start Your Business as a Bookie
So, we’ve looked at the basics of how to start a bookie business, let’s now look at everything else you need to know to run a successful sportsbook business. Read through the following steps and learn how you can successfully start your business!
1: Setting Your Lines
Setting decent lines is essential for bookmakers and there are two different possibilities for you so consider when setting your lines:
- You can set the lines yourself
- You can copy lines set by another well-run and respected bookie
If you don’t consider yourself a professional with lots of experience then it isn’t a great option to set them yourself. You should, in this instance, get a professional to help or visit a well-established bookie to help set them.
In just a few clicks you can visit all different bookie sites and compare and contrast their betting lines so that you can work out what the best option is for your own sportsbook.
When you have set your lines, you then need to make sure that you keep track of them. If you find that there’s too much money being bet on one side of the wager, then you can adapt your lines and encourage punters to bet on the other side.
2: Work Out Your Charges
When you are starting to run your own sportsbook then another very important step is figuring out the vig. The amount of vig you charge will depend on what sport it is. However, normally it will be a 100% to 110% ratio.
The higher your vig, the quicker you will make a profit. Moreover, it will, in some ways, protect your business from losses to an extent. However, it’s also worth bearing in mind that higher vigs might also put off punters from using you.
3: Keep Updated With Everything
When you have started your own sportsbook, you will need to keep detailed records and make sure that you are up to date with all the legal news. To make this easier, you can invest in a computer system that will help you with this. When you are looking for systems, be sure to look through several options and choose the one that suits you the most.
For an even better overview, you could back up the information on another computer, the online cloud, or an external disk. This will help you track your profits and losses and keep your data safe from corruption or loss.
If you require additional protection on your computer, then maybe consider using one that isn’t connected to the internet. This will mean that your information is kept well away from possible hackers and other cyber-criminals.
4: Choose Whether You Want to Issue Credit
A bookie can also issue credit to its sports gamblers, however, we would strongly advise against it as it can lead to massive losses.
These are some of the things you should consider when you decide whether to offer your punter a line of credit:
- Does the person have a good history of repaying debts?
- Can they afford their debt?
- Are there reasons to suspect the person might commit fraud?
- If you opt not to extend the lines of credit, do you have a different strategy for working with them?
5: Ensure Profits by Using a Layoff Account
A layoff account is an account that has been made to balance out the action on both sides of the game. Most online sports betting software shops will include a layoff account as a part of their features within the sportsbook management package.
There might be times that you find yourself in a very unbalanced situation where a loss of one bet could have a massive impact on your business cash flow. If you are in this situation, you will want to use a similar amount of money to offset the losses.
By using a layoff account, you will learn how to effectively run a sportsbook as you can start earning profit without needing to take more significant risks. Also, keeping your bookie balanced is helpful if you are going through a tricky patch as you will be saving on money.
You need to understand that this layoff account isn’t an individual in-house account, it is purely a business tool.
6: Choose a Sports Betting Platform
Obviously, there are plenty of sports betting software platforms to choose from and you need to make sure that you choose one that will satisfy your business and customer needs. These are some of the things that a customer will look for in a bookie:
- A good selection of online gambling market options for sports gambling, eSports gambling and other betting events
- A variety of payment options including bank cards and eWallets
- Support in a variety of languages
- Top-end security and safety
- Helpful and professional customer service
- An easy-to-use interface.
Aside from this, you also need to make sure that the platform you choose meets your business requirements – and these are some things you need to look for:
- A risk management tool
- A marketing tool panel
- An administrative panel with plenty of features
- Allows you to manage bet limits easily
- Offers a comprehensive reporting tool.
7: Create Your Business Website
Your next step in starting your sportsbook business is creating a website that is well designed and easy to use. It should look good and include all the required features. These are some of the main features that your website menu should include:
- A panel to log in
- Options to choose the bet
- A broadcasting game panel
- Variety of different tutorials
- Option to choose your bet type
- Information and data on teams and players
- A schedule or calendar of events
- Bid results
- Match summaries
- A choice of different languages
- Variety of payment platforms
The administration menu should offer features including:
- A panel for login
- Resource management panel
- User management
- A panel with bets, match, team and player info.
8: Advertise Your Business and Get Punters
This is important as you can’t have a business without customers right?! These days, advertising is generally done online, especially via social media platforms. In order to run a profitable sportsbook, you will need to follow at least one, preferably more of the following social media strategies.
Firstly there is the exchange advertisement strategy. Basically, you will advertise someone else’s site whilst they advertise yours. Because both of the parties benefit, this doesn’t come at an extra cost to you. However, in order for this to work, both parties will need to have an established audience.
Another option is to employ a social media manager or specialist to deal with this part of the business for you. This is easier and less hassle, but obviously, there are costs attached to this.
Thirdly, you could try to advertise your business using marketing and SEO techniques, fully optimizing your website with the keywords linked to your business. This is free if you know what you are doing but can be very time-consuming and needs your constant attention.
9: Secure your Bookie Business with a High-Risk Merchant Account
A high-risk business requires a high-risk merchant account in order to be able to take payments. A high-risk merchant account is one that will allow your business to process client payments. If you operate a business with high-risk limits then your choice of processors will be limited and come with higher fees than lower-risk counterparts.
As such, it isn’t always easy to find the right processor and it might need you to shop around a bit for the right merchant account. However, it is an absolute necessity to have a high-risk merchant account as a sportsbook business as it mitigates risk and allows you to run the online betting business effectively.
Closing Thoughts on How to Start a Bookie Business
Hopefully, this article has helped you to get started on your journey to becoming an online bookie and looked at all the things you need to consider before you get to start with your own successful bookie business. So, now you know exactly what a bookie is and what you need to do to get your bookie business started and manage it.
Having your own business and being a successful business owner certainly isn’t easy, but if you get it right, then it’s worth it! Good luck, have fun and enjoy your bookmaking journey with PayPerHead!