Must-Know Pay Per Head Information

Before getting into the nitty-gritty of a pay per head business, you should get to know how they came about.

Because if you’re a bookie, a “pay per head” can make your life much easier, but there are a few important details you should know first, starting with a history lesson.

A Brief History of Offshore Sports Betting

Offshore sportsbooks go back to around thirty years when a few enterprising individuals started taking bets in countries where gambling was legal to avoid prosecution in their own country where gambling might have been illegal.

Back then, bets were taken over the phone so most offshore books hosted large call centers and online gambling wasn’t even an idea.

Offshore gambling had a rocky start, full of stories of indictments of colorful characters the subject of another article, but it didn’t take long for it to spread like wildfire.

In little more than three years, over half a dozen countries were hosting twice as many sportsbooks.

How the Internet Transformed the Industry

The tipping point for the industry came when the Internet allowed these betting businesses to move online.

It was also at that time that bettors could easily deposit and withdraw money to bet on sports and other types of gambling.

It’s hard to imagine how from those humble beginnings an industry that is expected to generate over $50.65 billion dollars in 2018 was born.

If you want to learn more about the history of online gambling, you can view this infographic on Entrepreneur.com.

How Local Bookies Paid a Hefty Price for Sportsbook Services

Before we turn back to the origins of how pay per heads came about, there is still something to add about the local bookie.

Betting has a long history. A very long history that’s even older than written history.

In many countries, such as Britain, gambling is something of a national pastime.

And, of course, gambling takes place in many other countries as well such as China and the United States were billions of dollars are bet each year on sports betting, casinos, bingo, lotteries and practically anything else imaginable.

Anyhow, whatever the legality of gambling in each country the fact of the matter is that people bet.

And, mostly, when a person places a bet they do so with a bookie, who is someone whose business is to lay odds and turn a profit on the outcomes of bets.

Because it’s obvious enough that it’s hard to run a business as a bookmaker in places where it’s illegal to do so, yet that won’t stop people from gambling or others from taking their bets, something interesting happened.

Bookies started turning to offshore sportsbooks to hire services as “agents” with sheets of players who now had access to place their bets through the offshore book.

How did this work?

In exchange for those services, bookies made revenue-splitting arrangements with the sportsbook.

Bookies could now offer the many services sportsbooks had to their own players, which opened up many possibilities but also came at a heavy price.

Why?

Because bookies would split the winnings, or losses, with the offshore sportsbook; when a player won, the book would absorb a percentage of the loss and, when the player lost, the book would also take a split of the winnings.

On the surface, this arrangement might seem equitable, because the risk is shared with the sportsbook when players won, but the same thing is true if you flip things over because you’re also sharing your winnings when a player loses which means a decreased cash flow and limited business growth.  

So, this begs the question, is there a better way? Yes, thankfully.

How Pay Per Heads Came About

For a long time, the agent bookie business model developed alongside offshore sportsbooks that, for all intents and purposes, had no real interest in changing things.

When online betting took off, however, a new business model started to develop whereas instead of paying a percentage of revenues, a “per player” fee was billed on a regular basis.

Thus, when more agents became privy to this new business model, it opened up a new industry of pay per head sportsbooks that offered sportsbook services and left the paying out and collecting of monies to the bookies themselves.

Per heads, the name these service shops became known then became part of the sports betting industry.

In essence, pay per heads give bookies the same advantages in sportsbook software and services that big books have at a significantly lesser cost.

Local bookies could now expand their services and increase their betting volume without having to deal with many of the problems most traditional sportsbooks face.

It’s for this reason that PPH sportsbooks have proliferated in recent years.

The pay per head industry, in fact, now rivals online post-up sportsbooks in quantity, if not in size.

However, there’s a downside to the growth in popularity of pay per head sportsbooks.

And, it’s a big one if you’re considering getting into the business.

The Dirty Little Secret That Most Pay Per Heads Don’t Want You To Know

You see, before the Internet took hold with online betting, managing a sportsbook with all that that entails was serious business.

This meant sportsbook operators had to have in-depth, extensive, and direct knowledge and experience of things like line management, risk assessment, betting, and sports.

Nowadays, pay per head shops are a dime a dozen many of which have limited experience but put up a good dog and pony show.

Before you choose a pay per head, you should ask yourself some basic questions.

11 Questions To Ask Before Choosing A Pay Per Head

Some carry more weight than others, but none of these questions here are trivial. See how many of these you can answer by researching the websites of the pay per heads you’ve shortlisted. After that, speak to each per head directly to obtain answers to everything else.

1. Does The Staff Managing The Pay Per Head Have Direct Experience Of Running A Sportsbook?

This is the acid test for pay per heads. There’s something about running a sportsbook that does not compare to anything else. In-the-trenches experience on how to run a book when the shit hits the fan during football season can only be related by grizzled veterans.

This is in stark contrast to the shops managed by kids with computers that don’t know the difference between parlays and teasers, straights or moneylines. The two are not even remotely comparable.

If you are going to choose a pay per head to manage your players, ask them to prove to you their experience in running a successful sportsbook. This is the gold standard.

The next best thing after that is the pay per head that already has a few NFL seasons under their belts and knows what it takes to succeed in this cutthroat business. Again, they need to prove to you that they’ve made it through profitably year after year.

2. Is The Pay Per Head Really A Pay Per Head?

You want to find out if the pay per head is really just a scam or run by a skeleton crew. You want a pay per head with plenty of resources, lots of experience, and personnel. You don’t want your players to be neglected because your skeleton crew all went to lunch right before the games are going off the board.

Now mind you, there are a handful of expert operators who work without a big staff. They know the business inside and out and have loads of experience in the industry. They’re an exception to this rule.

But beware the skeleton crew pay per heads who come with no credentials, experience, and no battle scars.

3. What Services Does The Pay Per Head Offer?

The best answer? Those that should be standard: a sportsbook, casino, and horse betting. If they also offer live and in-game betting that should also give you more information. Look also for additional services such as custom built white label websites, access to a support team, different deposit options, experienced linesmakers, and reporting to make better decisions.

4. How Did You Hear About The Pay Per Head?

The best circumstance under which to choose a pay per head service is if a trusted acquaintance can give you a recommendation. Or, that you’ve spoken directly to one of the pay per head’s managers after doing your own research.

Always try to get references from industry websites or from previous or current customers (sometimes this is hard because of the industry, but it’s worth a try).

If you choose a pay per head sportsbook that contacted you out of the blue by email or by cold calling, without you seeking them out first, what does that mean? A per head like that usually has other priorities-they might be more focused on closing a customer than on offering a high-quality service for you the client. Many pay per heads are mills, where the salespeople are skilled scammers.

5.  Do They Have Experience In Your Specific Market or Vertical Niche?

This isn’t a deal breaker if they don’t. But some pay per heads may have experience in a particular target market that you work in. Every niche has its own idiosyncrasies.

6. What Types Of Reports Do They Offer?

Reports are the cornerstones of running a business like a tight ship. The first answer you’re looking for is for reports that give you a good idea in the context of betting. The types of reports such as settlement figures, weekly balances, player history, and hold percentages are critical if you’re going to make a profit as a bookie.

7. Do They Offer A Live Demo Or Free Trial?

Can you try out the software risk-free before you move your players? Some pay per heads talk mostly of their bells and whistles. A good per head, however, gets down to how they’re helping you make a profit and will show you with a live demo and allowing you to give the service a try.

8. What Software Do They Use?

When it comes to running your bookie business, it comes down to how good the sportsbook software is. Successful sportsbooks use software that’s trusted in the industry such as DGS to manage their operations smoothly.

9.  Who Exactly Will Be Managing Your Lines?

Sharp lines are the bread and butter of a successful bookie. A good linesman can make or break your business because they can mean the difference between making a profit or having sharp players destroy you on a weekend. Once the relationship begins, your players need to be managed by one or more highly experienced experts. Don’t be afraid to ask specifics about the people who are physically moving the lines. 

10. Are They Current With The Newest Trends?

Betting is going mobile. That’s a fact you can’t ignore. The fact is your players will likely bet through their smartphones. But, is your pay per head ready to offer a mobile betting experience? Most pay per heads aren’t built for mobile betting and are still stuck in optimizing things for a desktop.

Another thing to consider is whether or not they’ll accept payments through the newest methods such as cryptocurrencies. Bitcoin betting is the future for online gaming and it will catapult your business to another bracket but this can only happen if your pay per head has already built it into the software. 

11. What Does Your Gut Tell You?

Don’t be surprised by this question. Running a pay per head isn’t rocket science. There’s always a level of expertise that comes with the territory. Similarly, choosing a pay per head can’t be made solely on cold, hard facts. Keep on speaking with the pay per head until you feel comfortable with your choice, whether it’s to go with them or look elsewhere. The right per head will talk the talk and walk the walk, have a good business sense, be clear without muddling things up, understand the bare bones of the business, and have an in-depth knowledge of the industry.

If you have positive answers to the questions above and you instinctively feel that the pay per head understands you and your needs in what you’re trying to achieve, you might just have found your winner.

In Summary

Smart bookies know that the best way to manage their business is by using a pay per head. By offloading the cumbersome operational tasks to a pay per head via sportsbook software and other specialized per head services, it frees up time that could be used to increase your customer base. It also cuts down costs by only paying a flat weekly fee per active player instead of a percentage of winnings.

While all pay per heads work basically the same way, not all are made alike and you should do your homework before choosing a pay per head operator.

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