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Pay Per Head Explained

Pay Per Head Services Have Changed the Sportsbook Industry

Pay per head services like those offered by Boss Action have changed everything about sports betting for the independent bookie in the last ten years.

In the United States, sportsbooks began as small rooms in the back of casinos. Hotels like the Tropicana presented slot machines and table games in the center.

The sportsbook belonged in the back with other non-entertainment minded gamblers. Who were sports bettors? They weren’t who the hotel managers wanted to represent their clientele, that’s for sure.

It all changed on January 15, 1967. That’s the day the Green Bay Packers led by Bart Starr beat the Hank Stram coached Kansas City Chiefs 35-10 in the NFL’s first-ever Super Bowl. The Super Bowl turned sportsbooks from after-thought businesses into powerhouse profit-generating behemoths.

After corporations took over many casinos in Las Vegas, they continued to build out their sportsbooks. The MGM, Caesars Palace, and the Bellagio boast some of the largest, most impressive sportsbooks on the planet.

Super Bowl I was the first major shift in the sportsbook industry.

The second major shift happened in the late 1990’s. That’s when online sportsbooks became a force. Online sportsbooks gave players who didn’t live in Sin City a chance to play in a real, virtual, sportsbook. They no longer had to call their local bookie, ask for a line on a game, place a wager, and then meet that bookie to collect or pay up.

They could put money into their betting accounts and play when they wished. Online sportsbooks forever changed the industry. They put power into the hands of sports bettors. They remain a vital part of the sportsbook industry.

But they aren’t the only part of the industry that resides on the Internet. Right now, we’re in the midst of the third major shift.

Online sportsbooks appeared to stymie local bookie growth. Why become a bookmaker when players can log onto their online accounts and make wagers? For a while, local bookies were a dying breed.

The third major shift has changed that. Pay per head allows bookies to run online sportsbooks. They can decide on every aspect of the sportsbook including what betting lines, games, and bonuses to offer. Pay per head puts sportsbook management power into the hands of individual business owners.

What is pay per head?

First, discover more history about the local bookie.

How Bookies Used to Run Their Sportsbooks

When we hear the term “bookie”, many of us think of one of Tony’s employees in The Sopranos. Although the image isn’t 100% correct, the law that forbade states outside of Nevada from offering sports wagering did encourage local bookmaking. Sometimes, shady characters like those in The Sopranos ran local bookie businesses.

These businesses made a lot of money. They also kept legitimate bookmaking in the dark. It took effort for ambitious small business owners to start a sportsbook. Those who had the desire couldn’t just do it. They had to think of how to run their businesses.

Paper, Pen, Phones, and Chalkboards

Not long ago, bookies used the same tools that every individual business owner used. All business happened over the phone. Paper, pen, pencil, and chalkboards were the bookies’ tools. If the player couldn’t make the phone call, the player missed out on the wager and the bookie missed out on the fee, or the juice.

Those fees translate to profit. Even today, most fail to realize that bookmakers provide a service. The online bookie provides a means for sports bettors to make wagers. For providing the service, the bookie charges a fee. The fee often amounts to 10%. The fees add up. The more fees, the more money the bookie makes.

Every time a bookie missed out on a placed wager, the bookie also missed out on their 10% fee. Before the Internet, local bookies had to keep up on injuries, line movements, and take phone calls from their clients all by themselves. They had to keep track of wagers by themselves.

They did everything on their own. Pay per head, the third major shift, changed that.    

What is Pay Per Head?

Pay per head is a simple concept.

Bookies pay a “per head” fee for the right to use pay per head services. We can understand what pay per head is by comparing it to eBay.

On eBay, business owners run their stores. eBay provides the online interface where business owners can offer their goods and where customers can buy their goods. Not only does eBay provide the interface, but it also provides what happens in the background. It has a payment system. It can even help with shipping.

Pay per head works like eBay. It provides the interface for sportsbook clients. It also provides everything in the background. For a fee of $10.99 to $13 per head, sportsbook operators can use pay per head tools to build, manage, and grow their sportsbook businesses.    

How Pay Per Head Turns Bookies into Better Business Owners

Anybody who runs their own sportsbook is a business owner. Even if that person runs his or her sportsbook offline with a pen, paper, an excel file, and a phone. But, those bookies who run their sportsbook the old ways will find it hard to grow their businesses.

Bookies can improve their businesses and grow them faster by partnering with a pay per head company. Pay per head can jumpstart a new bookie business. It can help established sportsbook operators make more money. It makes every bookie no matter the level more efficient.

With pay per head, bookies become better private business owners. That alone makes pay per head necessary for almost every local bookie.

How does pay per head help bookies make more money?

1. Pay per head provides a tech-advanced betting interface for clients

Sports bettors don’t like calling up bookies. They prefer to wager through the Internet. That’s why online sportsbooks ended the relationship between many local bookies and their clients. Local bookmakers couldn’t compete with online sportsbooks. The Internet allowed players to wager on the games they wished and to wager when they wished.

Through tech-advanced betting interfaces, bookies return betting power to their clients. This makes happier clients. It also provides the bookie advantages. The bookmaker frees up time. Sportsbook business owners can use that time to do whatever they want, including thinking of ways to grow their companies.

The more difficult it is to make a wager, the fewer bettors are inclined to wager. Pay per head betting interfaces allows sports bettors to make quick bets. Quicker bets lead to more bets. More bets mean more juice, which means more profit.

A sports betting interface allows bookies to switch to a self-service business model. It’s logical that self-service business model companies make more money. Why? Less overhead for starters. Also, self-service businesses still charge fees. Often, the fees charged are lower.

But when it comes to running a sportsbook, the juice, the fee charged for every wager placed doesn’t change. It remains high at 10%. In some cases, the fee is higher.

This is true even though bookies who use pay per head interfaces don’t provide full betting services. Pay per head bookies work less for more juice generated profits.

2. Per head implements security for both clients and the bookie business

Security has become the keyword for all online transactions. One of Bitcoin’s big selling points is that it uses blockchain technology. Blockchain technology cuts out the middle man. It’s peer-to-peer. When a financial transaction is peer-to-peer, it’s almost impossible to hijack.

The very best per head companies, like Pay Per Head and BossAction, allow for Bitcoin transactions. Players that deposit with Bitcoin know their deposits are safe. Bookies that make Bitcoin payouts know those are safe.

But using Bitcoin isn’t the only security that pay per head provides. A pay per head company designs servers that are much more secure than an individual computer. Firewall technology allows good pay per head companies to provide the best possible security. A client’s account is safe. The bookie’s sportsbook business is safe.

3. Great PPH companies provide features, sportsbook management tools, and reports that generate more profit

This is the heart of how pay per head revolutionized the sportsbook industry. Large online sportsbooks and Vegas casinos gather player data. They use this data the way Netflix uses the data they gather. Netflix decides to promote shows based on what you’ve watched before.

Vegas casinos and large online sportsbooks also do this. If they know a sports bettor prefers to wager on football, they promote football betting. Pay per head provides reports that bookies can use to promote specific wagers to individual players. This increases action.

But actionable reports aren’t the only thing well-run pay per head companies do. They also provide tools that help bookies increase profit. The most important and the one that any person who considers becoming a bookie should know about is the layoff account.

The layoff account allows sportsbook business owners to lay off money wagered. They can use the money they won in their layoff accounts to pay their players. Or, they can use the money collected from their players to balance out their lay off accounts. It’s the most important profit protection tool that a bookmaker has.

It’s not the only tool, though. The holding percentage tool shows bookies what sports are most profitable. The line mover allows bookies to change often already sharp betting lines.

Pay per head also provides features that lead to higher profit. BossAction allows sportsbook operators to offer wagering options from 80+ domestic and international leagues. Many pay per head companies don’t just furnish online sportsbooks. They also offer an online casino and an online racebook. Both increase the bottom line.

4. Pay per head is a low-cost partnership for novice bookie business owners and professional bookie business owners

All business owners know they must spend money to make money. If a person runs a shoe store, that business owner must stock the store with shoes purchased from a wholesaler. The profit the shoe store makes is the difference between what the shoes sold for and how much they cost to purchase from the wholesaler.

Pay per head companies are sportsbook software wholesalers. They’re better than shoe wholesalers, though. Why? Because they only charge for existing customers. Per head means that if you become a bookie, you only pay for each client.

The cost to you, the bookie, ranges from $10.99 to $13 per. Simple math shows you how much profit you can make:

20 clients x $13 = $260

On the high-end for pay per head services, $260 is your cost per month.

20 clients account for $20 in fees, or juice, each month.

20 x $20 = $400

Your profit is:

$400 – $260 = $140

Is that a lot? Maybe, not. Is it a lot to run a self-service model business? It’s a heck of a lot! That’s what makes pay per head so attractive as an individual business. Entrepreneurs can make money without much effort. But, if they decide to grow, they can. They can grow much quicker than if they were on their own.

And the best part is that their cost, their outlay to the per head company, increases as they gain more clients. Bookies who use pay per head never spend more unless they make more.

Use Pay Per Head to Run a Successful Sportsbook

By providing secure, tech-advanced, betting interfaces pay per head has revolutionized the sportsbook industry. Anybody, even someone who knows nothing about sports, can run a successful sportsbook.

The best pay per head companies provide top of line reports, features, and sportsbook management tools. A company like BossAction takes it a step further by catering to people new to bookmaking. When you’re ready to start an online sportsbook, call a BossAction representative at 800-339-4108.

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