How Much Money Do You Need to Start As a Bookie?
Starting an online bookie doesn’t need to be expensive.
We’re going to teach you exactly what you need to budget for as a new bookie. While you don’t need a huge investment to launch a sportsbook, you need to have some liquid cash available.
How Much Liquid Cash Do I Need (Bankroll)
As a bookie, your bankroll should only be used to payout players.
When you start out as a bookie, you need a minimum of 20% of the credit you’re issuing.
Let’s take a look at an example:
If you have twenty players with a $300 weekly credit limit ($6000 in credit issued), you need to have a minimum of $1200 in liquid cash, which is to be used strictly to payout potential winners.
Could you maintain a higher emergency bankroll? Absolutely. As you grow and earn money, it would be a good idea to increase your bankroll to closer to 50% of the credit you issue if possible.
Some players will win some weeks, while other players will lose.
However, you may need to pay Player #4 on Monday and collect from Player #6 on Thursday. This is why it’s important to have liquid cash so that you can quickly payout your winners on time.
Why Paying Players Quickly Is Imperative
Paying your players fast is your best form of advertising, as it’s free.
Word travels fast in the sports betting world and if you build a reputation for paying winners quickly without any problems, you’re going to have lots of guys wanting to bet with you.
The other thing to consider is that if you slow pay, your players will as well. Or worse, your players may not even pay you or they’ll switch bookies because you’re not paying them fast enough.
No sports bettor wants to hear how you can’t pay them out right away or you need a payment plan to pay them. This is why you need a liquid cash bankroll reserved for paying out winners.
What Are the Other Costs to Consider As a Bookie?
There are some other costs as a bookie, but none will break the bank early on.
Firstly, you need a pay per head (PPH) service to partner with. You can expect to pay $10/head each week for an active player (made at least one wager). Therefore, if you have ten players to start out, you need to budget $100/week to pay the per head fee.
You should budget for this as a new bookie because some weeks you might not make money.
Some other things to consider when launching are a new smartphone (you don’t want to use your personal phone number) and a computer/laptop to handle the day-to-day operations.
As your business grows, you will need to start budgeting for maintaining your business and at some point, you’re going to want to hire an assistant to handle the mundane tasks.
Another expense as you grow is for marketing/advertising. Eventually, you’re going to run out of friends and family to join your sportsbook and you’ll need to start branching out.
However, these additional expenses aren’t necessary early on as a new bookie.
The main thing you need to worry about early on is the liquid bankroll (20% of the credit issued).
The majority of pay per head services offer 2-4 week free trials, so you’re not even going to have to worry about paying a per head fee until after the first several weeks of operating.
The only money you need in the beginning is to payout any players that may win.
Build a Safety Net
You should now understand how to start a bookie business, how to build your betting sheet, how to set-up players and the financials of operating in this industry.
In this lesson, we’re going to explain how to take the next step as a bookmaker.
Now that you’re prepared to succeed, it’s the opportune time to focus on building a safety net.
Transparency is Everything
As a bookie, transparency is everything. The more you can build relationships with your players, the more loyal they’ll become. This is how you build a safety net as a bookie.
The goal of a bookie is to always find new players that are profitable.
There are times of the year (NFL/CFB Seasons) when finding players isn’t too difficult, as there are lots of people looking for a bookie. However, some months of the year are tougher for marketing.
The idea of building a safety net as a bookie is to have loyal players to get you through the tough times. If you’re losing players as fast as you sign-up new accounts, you’re never going to grow.
How to Be Transparent and Build Trust With Your Players?
Here are just some of the ways you can build trust with your players:
• Notify When Away: This is a small thing, but goes a long way with players. If you’re going to be on vacation or away for any other reason, make sure your players know.
Players will understand if you’re going on a summer vacation if you notify them beforehand.
Bookies get into trouble when they don’t notify their player base. If your players are expecting to be paid on Thursday and you’re not going to be able to meet them, give them ample notice.
• Arrange Payouts: If you’re going on a vacation for a week. Arrange for someone close to you to handle the payouts for players if possible. Doing this will build a lot of trust.
Remember, as a small/local bookie, your biggest weapon against the big bookmakers is your ability to pay players on time every week. This is what keeps players loyal to your business.
• Communication: Don’t spam your players with offers, but communicate with them. One way to do this is through a survey. Ask your players how you can improve your business.
One of the best things you can do as a small bookie is to make yourself available.
A lot of players join local bookies because they like being in direct contact with the bookmaker and not an outsourced support rep. You don’t need to be available 24/7 obviously, but try to build up a relationship with your players by being your players first contact for any problems.
The benefit of being transparent with your players is that they’ll also feel obliged to be transparent with you. Make sure you let your players know that you expect the same transparency/respect you give them. If they’re going to miss a collection day, they should notify you as soon as possible.
Retaining Loyal Players Is Your Safety Net
Your best safety net is retaining your profitable players.
It’s a lot easier to retain loyal players then it is to convert new players. What happens if you have 10 players and lose 7 of them without any new players coming in?
Well, your revenues are going to take a big hit.
Learn to Save
There are going to be months where you’re flush with cash.
This is the time to save some money for a rainy day. These savings should be separate from your escrow account. These are savings you can use for personal expenses during slower months.
Believe us, not every month is going to be as good as the months during the NFL season.