The Making of a Bookmaker: Where to Start
So you’ve had bookmaking and bookie website thoughts as of lately. Well, Pelican PayPerHead is delighted to tell you all about becoming a bookmaker to live out the dream.
What’s It All About? Becoming a Bookmaker
For starters, a sportsbook business operates by taking bets and commissions from customers through a betting site. This betting site takes a small bite out of the wins to ensure the bookie gets their share of the wager. That’s basically the drill. But –and I can’t stress this enough– there are a few guidelines on what an online sportsbook should have before you get all tripped up over your excitement.
Facts on a Bookmaker
In a nutshell, a ‘bookmaker’ is a business or company that takes bets and wagers on sporting events and other types of events at odds that are predefined. Then they pay out to the winners of the wagers. They can even lend money to bettors if they are so inclined. They can adjust and set odds to keep a balanced order in the books; in other words, they try to keep the amount of punters that win equaled to the punters that lose. But, let’s not kid ourselves: it is a high-risk business and there are a couple of things you have to take into consideration before throwing yourself into the river current.
Legalities are First in Order
Of course, money is the primary interest of your business, but it goes hand in hand with legitimacy. Not only do you have to make sure you have an appropriate cash reserve, but you have to look out for legal procedures; they are a must at every step of the way. Of course, research on legalities are a personal undertaking, since each country has its own set of rules; even in the US rules vary from state to state, making legality a non-standard item. Our recommendation? Research, research, research! And if you’re still in doubt, take it up with an attorney experienced in the vast world of gambling just to make sure you’re standing on solid ground.
Startup Cash: How Much Do You Need?
It is no secret that cash flows are at the very heart of every solid business. Duh. You need a backup for your overhead (payroll, rent, etc.) except in this case, wagers that have been won are especially important. These are your first responsibility. This cash flow will look something like this: the Bookie takes up the commission on a losing wager, and uses the losing wagers to pay out the winning ones.
So, back to the start: bear in mind that there will also be additional costs and fees to pay; for example, a valid license to start your bookie business. This is very important to keep in mind when deciding how much money you need to start up. Even your position in this cutthroat market will depend on how much you decide –and can– invest in your incipient business. For this item, “more is more” proves to be very true.
Want to talk about numbers? Ok, the type of clientele you are targeting is the deciding factor in how much money you need for your startup fund: casual bettors wager less money than professional bettors, so this means that, depending on your customers, the funds you need to start your business can range from $5,000 to $10,000. Or even more. Per sound advice from Pelican PayPerHead, you should consider starting a bookie business for professional wagerers only if you have a minimum of $10,000 for your startup fund.
STARTING A BOOKIE BUSINESS: WHAT YOU NEED FOR BECOMING A BOOKMAKER
Let’s get down to business: what you actually need to do. These steps are the basics for rustling up a bookie business.
- Set up lines
This is an essential move, and there are two ways of going about this step. You can:
- Set up your own lines, or
- Copy lines from a decent, respected sportsbook
Be sure to not kid yourself: if you don’t have great experience in the bookie business, then avoid setting them on your own. Get professional help or visit a high-rolling, respected bookie to get help setting them. Compare and contrast: that’s the way to go when visiting these pro bookies. Once you set your lines, KEEP TRACK OF THEM. Adapt them and encourage customers to wager on the side that is not being bet so much. Don’t let one side have all the wagers!
- Defining Your Charges
When you define what your charges will be, the important factor here is the VIG. You need to figure out a vig, and it depends on the sport. It will normally be from 100% to 110%; the higher it is, the quicker you will turn a profit and protect your business from losses, but up to a certain point. Just make sure not to kick it up too high, since this will put off customers from using your services.
- Stay In The Loop: Keep Updated
Keeping updated, especially regarding legal news, is a must in the business. Per Pelican PayPerHead’s recommendation, get a computer system that suits your needs and helps you by keeping in touch with sensitive news. Back up this data and your profits/losses in another computer, or cloud or external disk to keep them safe from corruption, loss or hackers. Can’t be too careful!
- Issuing Credit: Not a Good Idea, But It’s Your Call
Pelican PayPerHead strongly advises against issuing credit: not only does it hog-tie your elbow-space, but it can result in massive losses. Consider these items regarding your customers before offering them credit:
- Good history of debt repayment?
- Can they afford to have credit issued and pay their debt?
- Do they seem like they might commit fraud?
- What other strategy can you offer if you decide not to offer lines of credit?
- Layoff Accounts: Ensuring Profits
To balance the action on both sides of the game, you need the help of a layoff account. Betting-software providers will generally include a layoff account in their management package.
Let’s say you’re in a situation where the loss of a wager can have a huge impact on your cash flow. The way to go here is to use a similar amount of cash to offset those pesky losses. The layoff account, which is solely a business tool instead of an in-house account, will allow you to get savvy on how to run a business and earn a profit without having to take significant risks..
- Get an Adequate Betting Platform
The Betting Platform you choose needs to satisfy both your business and your clientele’s needs. Look for the following items in a bookie:
- Wide selection of sports-gambling, e-Sports and other wagering online market options
- Wide selection of payment options that include e-Wallets and cards
- Top-notch security for transactions
- Top-of-the-line customer service
- Support in several languages
- Friendly interface.
- Admin panel with lots of functionalities
- Risk management tools
- Marketing tools
- Bet limits management tools
- Reporting tool.
- Set Up Your Business Site
A well-designed, friendly website is your next step for creating your sportbook. Appearance and features are a must. Look for these when setting up your site menu:
- Log-in panel
- Options for choosing the wager
- Option for choosing wager type
- Data on teams/players
- Calendar/schedule for sports and other events
- Summaries of matchups
- Diverse Payment forms
The other menu features to look for regarding administration should include:
- Log-in panel
- Panel for resource management
- User management
- Info (bets, matchups, teams and players) panel
- Advertising/Getting Customers
Regarding advertising, it is generally carried out online, with social media platforms as the go-to. Profitable bookie businesses need to follow at least one, if not more, of the following social-media strategies.
- Advertisement Exchange: you advertise someone else’s site and in exchange, they advertise yours. Both benefit and there’s no added cost for you. Remember both parts need to have an established audience, else it won’t work.
- Social Media Manager: employing a person to deal with this is easier, but there are added costs to deal with.
- Marketing and SEO for Advertising: These techniques optimize your site using your specific business keywords. On the down side, this strategy consumes a lot of time and needs constant surveillance.
- High-Risk Merchant Account
Since a bookie business is a high-risk business, it will need a high-risk merchant account so it can take customer payments and allow you to process these payments. Operating a business with high-risk limits will definitely limit the offer of processors and even raise the fees for these, though. Furthermore, it’s not easy finding a suitable one, and you may need to have a good look around, but it is a necessity since it mitigates your risks and lets you run an effective bookie business.
Pelican PayPerHead is intent on getting you all the valuable advise you may need to set up your own sportbook business and Becoming a Bookmaker, and we wouldn’t be doing our job if we left out the one big recommendation you need for any business to explode: analyze and get the best Pay-Per-Head provider to aid you in obtaining a successful business. Choose a current pay-per-head provider that fits your needs. For example, a provider’s casino offer can offset the per-head fees you invest by letting you earn money while sports events are on stand-by between seasons. That alone can be a great asset for your business, plus knowing that it’s in good hands and leaving you more time to enjoy life.
All set? Go get your business started right with Pelican PayPerHead’s recommendations of Becoming a Bookmaker! And don’t forget to follow us on Social Media!