The best way to evaluate any business is the bottom-line profit it generates over a fixed amount of time. For a private bookie, this could be as simple as how much money ends up in your pocket at the end of each week.
If you are serious about running and managing a private bookmaking operation that can meet both short-term and long-term financial goals, the proper evaluation process is a bit more complicated than that. A private bookie makes their money on the difference between the winning bets paid out and the losing bets plus commission or juice collected. Evaluating how that money is made is a crucial part of the process.
While it is highly doubtful that anyone you owe money to forgets to collect. However, one of the biggest pitfalls in this business is collecting bad debts. If you have customers that are constantly behind on bets owed, it may be time to cut them loose and look for some different cliental.
Credit is a benefit that needs to be closely monitored. This is one of the biggest tools a private bookie has to maintain that edge against big commercial online books. However, when bad debt begins to cut into cash flow and weekly profits, credit can become one of your biggest headaches.
It all starts with your pay per head bookie software provider. Their online sports betting package gives you the ability to set appropriate credit and betting limits on an account by account basis. As a private bookie, you already have the ability to pick and choose your specific customer base. You also have the ability to decide just how much credit you are willing to extend. This should always be a big part of the evaluation process.
Extending too much credit to bettors with a shaky payment history on money owed is a proven recipe for disaster. You always have to remember that credit is earned not demanded. If you do not pay your credit card bills, the cards get cancelled. Keeping tight control on the credit you extend needs to be part of the overall business plan.
Another important way to evaluate your customer base on an individual basis is by total volume bet. You probably have a few steady bettors that gamble a fixed amount every week. You are also paying a fixed weekly per head fee on this bettor as part of your pay per head plan.
As long as your overall hold percentage on a bettor is more than their overall pay per head fees, you are making money on that customer. When the amount of money they bring in on a weekly average dips lower than the fee you pay, it is time to cut that person loose.
The right pay per head business analytics can also help you evaluate your bookie business in terms of winning percentage. As long as the overall winning percentage stays at or below 50 percent, you are making money on the juice you collect. You then have to factor in all the other operational costs to determine what your net profit is.
A large customer base of low-unit recreational bettors adds some stability to your bookie business, but not all that much profit. Heavy bettors definitely add more risk to the equation, but over the long haul, they will be your most profitable customers in the absence of any collection issues.
The best customer base for private bookies is a blend of both. What you definitely need to avoid is heavy hitters that win more than they lose. Let the sharps find some other bookmaking venue to place their action. Evaluating each of your player’s overall winning percentage is the best way to balance out your overall betting base.