Do bookies make a lot of money? If you ask yourself this question, it hints you want to become a bookie. Your question is valid, considering you want to become a bookie to earn profits.
However, the answer to do bookies make a lot of money is not precise. This is because several things contribute to how much a bookie can make.
This article will explain how bookies make money and give various figure examples. Ideally, this guide should hint at how much you can make depending on multiple factors.
How Do Bookies Make A Lot Of Money?
To understand how much bookies make, you need to learn how they make money in the first place. The main source of a bookie’s income is the transaction fee or commission, commonly referred to as the juice, vigorish, or vig.
When placing a bet, you will come across odds such as -110. This means you have to wager $110 to win $100. Suppose there is a 50 percent chance for the player to win. For every $100 wagered, a bookie will get $5.
The money a bookie makes from each bet varies depending on the vig of the bet. It is usually -110 or 10 percent plus the wagered money for the specific bet.
Ideally, the total amount a bookie can earn from each bet varies per player and per bet. For example, some players can bet $50 and others $200, totaling different vig amounts for each player.
Another way bookies make money is from the remaining balance after paying out winnings from losing wagers. Suppose a player places a $50 wager at -100. This means they risked $55 to place the bet.
If they lose the bet, the bookie retains the whole $55. Suppose a player places a bigger bet of $2,000 on a game at -110. This means they wagered $2200 that the bookie will retain when the player loses the stake.
The goal is to have many quality players. That way, your bookie can record an increased volume of bets, which translates to more vig.
Calculating How Much Bookies Make
Let’s start with an example—Nevada recorded 1.015 billion in sports wagers in December 2021. The revenue was 15.960 million. To make this calculation easier, we will use whole numbers.
So, we will work with 1 billion as the handle and 15 million as the revenue. To calculate the hold percentage:
- 1,000,000,000 =100%
- 15,000,000 =?
The hold percentage stands at 1.5 percent. This is the money, or the profit bookies keep once the bets are settled. While we have chosen to use Nevada, the hold percentage seems a little low.
This should not discourage you because this is a rare occurrence. Usually, the ideal hold percentage ranges between 3 and 15 percent for individual bookies.
Let’s calculate how much you would earn using these average numbers. Suppose you have 100 active players that wager $10,000 every year.
Going with a hold percentage of 1.5 percent, you would make $15,000. If the hold percentage is 10 percent, this means you make $100,000 each year with 100 clients.
Ideally, a bookie’s revenue = the number of players X the number of bets made by each player X hold percentage. If you are working with a pay per head site, you can use a sportsbook revenue calculator to predict how much you would make in a year.
Factors Influencing How Much Money Bookies Make
Opening and running a sports betting service is expensive. For starters, you have to pay for the betting software, among other things.
However, when you choose to operate a pay per head sportsbook, you can get around the expensive costs and retain most of your profit. In this section, we look at factors influencing how much you can make as a pay per head bookie.
Suppose your bookie hosts three sports betting markets, including tennis, basketball, and hockey. Moreover, you only cover a few leagues for each of these sports. Whenever your clients want to place a bet, they will find fewer markets than they want.
Suppose you were offering betting markets in 20 sports. This would mean you have over 100 leagues covered by your bookie. If your client wants to bet on football and finds soccer markets, they will be tempted to place another bet.
Another thing contributing to a bookie making a lot of money is live wagering. Today, 80 percent of bettors prefer placing bets on live matches over betting before a game begins. This is due to how exciting it is to bet on live matches.
Moreover, it allows bettors to place multiple bets before a game ends. Live wagering gives players an opportunity to be actively engaged in a game. As they watch a match in real-time, they can predict the next happening and place a bet on it.
Therefore, you should have many bet types, including props, to increase opportunities for bettors. That way, they can bet more, increasing your juice.
Apart from live wagering, you should offer Moneyline, parlays, props, point spread, and other bet types. This gives your clients many options.
Remember, a bettor chooses a betting platform that addresses all his needs. Activate as many bet types as possible to get all the preferences for all your clients.
Bookies Make A Lot Of Money With Pay Per Head Software
We suppose that you now know the answer to ‘do bookies make a lot of money?’ based on the examples we gave. You have also learned that a pay per head bookie is destined to make a lot of money compared to other types of bookmakers.
Earlier, we mentioned that sportsbooks have to pay for their sports betting software. However, we did not note that you have to pay for the pay per head sportsbook software too. The good thing is, you do not need thousands of dollars.
With a fee of between $5 and $30 per player, you can afford the pay per head software and services. The fee is much lower, leaving you with enough profit, unlike traditional sportsbooks. The betting software is packed with all betting markets, many bet types, and every other factor contributing to how much money you make.
Contact Power Pay Per Head and ask for a trial period with its sportsbook software. During this period, you can predict how much money bookies make and create a plan to achieve your goal with the bookie software.