When investing in a business, one of your immediate concerns is to know when you can get your money back. The return on investment varies for every business, and generally, the higher the capital, the longer it takes to earn back. In the case of sports betting, this will also vary. If you are going to hire a team or build your own company to create a sportsbook from the ground up, then it will definitely take a long time for you to recoup your capital. If, however, you learn how to start a sportsbook with a pay per head software, then you may not wait too long.
When using online bookie software specific to a pay per head service, there is not hefty down payment or investment. In fact, some actually even offer a free trial for the first few weeks of your use of the software. This will give you a head start where you could probably even earn the money you will use to fund your online sportsbook. We’ll get into more detail on the pay per head service.
ROI for an Online Sportsbook
Let us assume that you are working with a pay per head provider offering a $5 per head rate. This means that for every player that places a bet on your sportsbook, you get charged $5 a week. If you have 20 players, then you pay $100 each week. This rate is regardless of how many times they bet each week. Assuming this happens throughout the month, then you have a pay per head fee of $400 a month. In addition, you need to have money on hand in case you need to release payouts that are more than the money you collect from players.
Assuming you manage your lines well and you will not have to pay out of pocket, then your actual operating expense is set at $400 a month. If you want to offer bonuses, then add it to your sportsbook. The amount depends on how much you want to spend.
Generating Revenue
Your revenue comes from the Vigorish, or the vig, which is a percentage on each wager that ranges from 1%-10% of the bet. You will set it, so the revenue you get will depend on you. If you have a player who bets $100, then you get $10 for that wager, and it immediately recoups the $5 for that player for the week. The other $5 goes to your revenue. If your player places more bets in that week, then the vig from that already counts as your revenue.
So you can see how easy it is to get back the money that you will spend on your sportsbook. You can also increase your bookie income with baseball, or other popular sports events, to increase the speed in which you get your investment back.
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