One of the most important things to understand about running an independent sportsbook is the value of a layoff account and how to best use one.
For those unaware of what a layoff account is and how bookies can use one, we got you covered.
Much like the leader of any sports team, the independent bookie needs to have a gameplan before entering into battle with their opponents. In this case, the opponents are the players at your sportsbook and you need to do your homework to find the best ways to maximize your profits and minimize your losses.
Perhaps the best tool to mitigate any potential money lost is the layoff account.
What is a sports betting layoff account?
The idea of a layoff account is relatively straightforward.
Laying off, as a general sports betting term, refers to a situation where a player will place a bet to “lay off” some of their action on another book to best cover their losses. It’s a form of hedging.
The way a bookmaker can use it varies slightly from the average sports bettor. A pay per head agent would either utilize their layoff account to minimize the exposure they risk from a particularly big-ticket game, or to just balance out a sportsbook that has crossed over into dangerous territory.
The easiest way to continue our explanation of a layoff account is by creating a real-world example as we move forward.
Say, for example, the Miami Dolphins and Pittsburgh Steelers have a big AFC showdown in primetime this week. It’s been a hot topic around the league and a very popular game for your clients to bet on. The problem is, the vast majority of the action is coming in for one particular side, the Steelers at home to cover the spread. If this were to be the outcome of the game, your sportsbook would stand to lose a lot on just a single game.
This where your layoff account comes into play.
To protect yourself from such a financial hit, you will head on over to your layoff account and make a mirror bet on the Steelers against the spread.
Therefore, if the Steelers do in fact come through, then the payout you collect from the layoff winnings should cover most, if not all, of the losses at your own sportsbook. Should they fail to cover the spread, the money won at your own personal sportsbook should, in turn, cover your losses from the layoff bet.
It is a Pay Per Head agent’s way of hedging their action and is a powerful tool that can save you from taking massive hits on popular public betting days.
Now that we’ve covered the basic use of a layoff account, let’s tackle a more advanced concept. That of balancing your sportsbook with the aid of a layoff account.
Balance your sportsbook’s action with a layoff account.
Layoff accounts are not only a way to protect against a single but loss, but can also be utilized on a more regular basis to keep your sportsbook in balance. The idea here is to monitor the overall action which your sportsbook takes in each day, and lay off your liabilities with your other account.
When using this strategy, the goal is to maintain as close to a 50/50 split as possible. Essentially, any event which you have a slight exposure on, you lay it off. This process requires a lot of time and effort but can have a number of benefits for your independent sportsbook. First, if you truly accomplish a true 50/50 split, you would essentially set your risk to next to nothing, while you make money off of the juice.
Sure, zero risk does sound very appealing to any small business owner, but to the online bookie, this also means very little reward. The sports betting community, both the players and bookies, both make money based on risk.
The players bet longshots in the hopes of hitting it big while the books live off public bettors losing on bad bets week to week. The thing is, when you take the risk away, you take away the profit potential. A sportsbook that is just earning you that little bit of juice is being underutilized.
This doesn’t mean there are not reasons for running a book this way, sometimes. It’s a great asset if your book is going through a rough patch financially and you aren’t able to secure more capital right away. An independent bookie in this situation can spend his time keeping things split down the middle while saving the juice earning to put back into his struggling operation.
Every business goes through lean periods and having the tools to keep you afloat is paramount in keeping your doors open. Surviving off juice should be mostly reserved for just that, surviving. It’s a great way to help keep your sportsbook in business short term but isn’t a viable long-term strategy.
How to layoff a bet as a Boss Action agent.
Time to get super specific and go step by step on how a bookie might layoff a wager.
Say it’s Saturday morning and a full slate of College Football action is just hours from kickoff. Part of your morning prep should include reviewing your client’s bets and calculating how much you stand to win or lose from the day’s events. You can then set out to make bets on the games which you stand to lose the most money from, set a limit if you want to create a system.
If you stand to lose (X) percent of your bankroll on a certain event, it’s an automatic layoff.
Let’s say that Michigan and Ohio State are squaring off this weekend with the Buckeyes three-point favorites. Your sportsbook has taken 10 bets on the Wolverines at +3 and just eight bets on the Buckeyes at -3, both at -110 and all $10 bets. If Michigan covers the game, your outflow, or total payout, would be $210 or 10 winners being paid $21 each. This would leave you down -$12 when you take into account the eight losing bets you profit from. This is not ideal. If the Buckeyes end up with the cover, your outflow shrinks to just $168, or eight separate players being paid $21 each. This would leave you with a profit of $30.
But, if you used your layoff account properly, you could be having a much better Saturday afternoon. Say you made a $20 bet on the Wolverines with your layoff account at +3 on the spread. Now, if Michigan covers, you will still be paying out the same $210 to your clients, but you have also won $38.18 to help with that task. You have now taken that game from a -$12 net loss to an overall profit of $6.18. While this does take away from your net profit if Ohio State covers, you are still coming away with a net profit compared to the possibility of a net loss.
The perks of being Boss Action agent
Lucky for you, Boss Action agents enjoy many advantages over agents who rely on sub-par bookie software providers.
The Layoff Account is just a brick in the wall of features which we offer at Boss Action. Don’t forget, being an online bookie requires using all the tools at your disposal to avoid running your business into the red. If you want to make Boss Action a long term solution, you best start thinking about the actions you take today and how they might affect your sportsbook business long-term.
Do yourself a favor and make one of those actions to really use the layoff account efficiently and effectively. Combine this with some of our other features and you will be an unstoppable force. Using player reports to predict where the money will go, or real-time betting alerts which allow bookies to be fully aware of a specific action going down at their sportsbook.
This just requires you provide an email address or phone number for a text or email to inform you of events you might have missed. Once alerted you can easily react in seconds to head over to your layoff account and hedge accordingly. It’s that simple.
If you have yet to sign up as a BossAction sportsbook agent then head on over to our ‘Join Us’ page above and get started on your path to owning your own sportsbook today.