The Overhead Costs in Running a Sportsbook

The Overhead Cost of Running a Sportsbook

When you are going to become an online bookie and manage our own sportsbook, there are a lot of things for you to plan. Of course, like any business venture, you will be very particular with how much money you will invest, and how it will be spent. Determining how much you are willing to spend in terms of the overhead cost of running a sportsbook will help you figure out how sportsbook will operate.

So aside from reading resources like “How to Be a Bookie for Dummies”, you should also shop for the software that you will use for your online sportsbook. Depending on which option you take, the overhead cost will be different. The first option, is to create your own software. With this option, you will put up your own company . Then, you will hire a staff of experts to create your sportsbook software and maintain it. This means hiring software developers, project managers, sports betting and handicapping experts, among others. You will need to maintain a physical office, or work remotely, and pay for other necessary expenses in running a traditional business.

The Overhead Costs in Running a Sportsbook: A Cheaper Option

The Overhead Costs in Running a SportsbookYour second option, is to look for an online bookie software solution to use. Here, you will be paying a pay per head service provider to access software that will allow you to personally run your own sportsbook. Here, you will get access to two sites: the actual online sportsbook where your players can view the odds and place bets. Two, you get complete access to the technology that you need to easily manage a sportsbook.

A pay per head service charges you per player that you have each week. This is basically why its call a pay per head software. So, for every active player that you have each week, you will pay a fee, say $5. That’s around $20 a month for each person that you have. If you only have 10 players, then you have to pay $200 a month. That is just the fee to be able to use the software. But this is the most affordable option available, as the first option we mentioned earlier would cost you hundreds of thousands each year to maintain.

Your Biggest Sportsbook Expense

The Overhead Costs in Running a SportsbookPart of your job as a bookie is to balance the lines, or the wagers on each side of a bet. Ideally, you want to have two sides as balanced as possible. Why? Because you will have to pay your players’ winning bets, and you will be taking them from the losing wagers. And if there are more payouts than money from lost wagers, then you will have to shell out the balance. This does not happen every time, but it could happen. And when it does, you need to be able to come up with the money asap, and be able to give your players their winnings.

You will have money from the Vig, or the commission that you will get from each bet. This usually is enough to cover your pay per head fee. And if you have active players, then you will have extra earnings, since the vig is per wager made. You can take the payouts from there, should you need to. If it will not be enough, then you need to fund it on your own. The limits that you will set on your players can help minimize this risk. As mentioned earlier, this does not happen a lot. But if it does, you need to be ready. This means that you should have a readily available fund that you will set.

You have to make sure that this amount is on hand, and that you can take from it as you need, and replenish as you earn more. This, along with the pay per head fee, makes up the overhead expenses for running a sportsbook. Given the profitability of sports betting, this is something that will be very affordable for you, even in the long run, and even if you expand your sportsbook to take in more players and wagers.


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