As a private bookie running and managing your own independent sportsbook, your biggest operating cost is the weekly price per head fee you pay for each of your active betting customers. That cost may be a direct hit to your bottom line, but it is still one of the best deals going when you consider what is included in a quality pay per head bookie software solutions package.
The best thing about paying one low weekly fee for each active bettor is a controlled cost. If you have 20 active bettors on a regular weekly basis and your weekly fee is $10, you can build your overall business model based on a fixed cost of $200 a week.
This gives you an accurate picture for how much action you need to take in to make a profit that meets your financial goals. Bookie make money on a hold percentage. This is the difference between the money paid out on winning bets and the money plus commission coming in on the losing ones.
These are all fairly easy numbers to understand. They are also very important numbers when it comes to how much profit goes to the bottom line after costs.
How Many Active Betting Customers Do You Need?
The answer to this question really depends on what type of sports betting customers you are looking to attract. If you focus all of your sales and marketing efforts on landing a few really big fishes, your overall customer base can remain rather small. Taking those same 20 active betting customers adding up to a weekly pay per head cost of $200, if they are each betting an average of $1000 a week, you would probably be in decent shape.
Based on an even amount of weekly action, you would payout $10,000 and collect $11,000. The $1000 gross profit would yield a net profit of $800 after your pay per head fees. Now, if those same 20 bettors were placing $2000 a week in sports betting action, your net profit jumps to $1800 a week because your pay per head fixed cost remains the same.
If you are looking for recreational bettors that are much more conservative in their weekly betting activity, it is going to take a much larger customer base to meet your financial goals. Some price per head shops do offer a reduced weekly rate based on the quantity of active players you have, but you must always take into account this fixed cost when it comes to walking away with enough money to make your bookie business a financially viable enterprise.
Understanding Risks and Variables
The example above is the ‘perfect world picture’ for a private bookie business. A perfect balance between money going out for winning bets and money coming in on the losing ones is very hard to achieve on a weekly basis. Given a heavy lean towards betting favorites, even the best pay per head business tools cannot guarantee that you will not have to face some unsettling negative exposure from time to time.
Making real money as a private book is over the long haul. Some weeks will be highly profitable if all the chips fall your way. Some weeks will cut deep into your money reserves when everything goes the bettor’s way. Over the long-haul, achieving that necessary balance to build your bottom line is easier to do as long as you do not fall asleep at the wheel.
The right pay per head site can provide everything you need to successfully run and manage your own independent sportsbook. You need to develop a customer base that make the numbers work, so the business can remain profitable on an ongoing basis.