One of the most popular questions we get from readers, is about the cost of putting up a sportsbook. It is, after all, a very practical question. Before you venture in any business, its always good to have a solid business plan that anticipates the cost of starting out and running the day to day operations of your sportsbook. When you read how to be a bookie for dummies, this will probably come up.
Now, the more traditional way of going about this, is by putting up your own company. This means spending hundreds of thousands in setting up your business, and hiring people. It also takes forever to do. Well, not really. But we are talking months, when a pay per head service can do it in minutes.
How Much to Start a Sportsbook?
Which is why when you ask us about the cost, we will tell you that the cheapest option is to go for a pay per head service. It is very easy to compute the cost because it will depend on how big your operation is. So, let’s assume you want to start a sportsbook and you have 15 players. The cost of the pay per head bookie service is $5 per head. Let’s do the math:
15 x 5 = 75 each week 4 weeks x 75 = 300
$300 is the base cost of the pay per head service that you will use each month. This rate is regardless of the number of bets your player makes. In fact, some Price Per Head Online services will not even charge you if a player would not play for that week. It looks like a reasonable price, right? Is it too good to be true? No.
Because aside from the $300 a month for 15 players, you still need to have money to cover their bets. Remember that as a bookie, you want to collect not just the vig, but any excess winnings as your profit. So, it will be a good day if you get:
Losing bet side > Winning bet side
That means that there is more money coming in from losing bets. You use it to pay off the winning bets of players, and any excess goes to you. So, as a precaution, you need to be able to have the money to front the payout of winning bets. So, if your winners have a collective amount of $1,000 for the day, and you only have $800 from losing bets, then you need to pay off the $200. This is your motivation for trying to get as close to a balance as you can between these wagers. It also means that you should set betting limits for your players. Adjust them accordingly, but always make sure you have money to cover the bets. Otherwise, the very affordable fee of $5 per player is the only money that you will be spending.
