Have you recently started a local sportsbook or you’re thinking about starting one? One of the most important aspects of sportsbooks for the local bookie to master is bankroll management. How much money do you need to start your sportsbook? How large of wagers should you allow? How do I utilize a layoff account? These questions and more will be answered in this article. We will also explore some tools on your PPH website that can help you track your player’s wagers and keep you under your bankroll.
From the customer admin screen you can set the your players’ “weekly credit limit” and “wager limit”
- Weekly credit limit: This is the accounts credit limit, or the maximum amount they can lose
- Wager Limit: This is the default wager limit for an account. This can be overridden(reduced) by other settings for specific wagers but is the maximum amount that the account can wager.
What Is Your Bankroll And Why Is It Important?
Your bankroll is liquid funds that are available for you to pay your players when they win. This should be separate from your anticipated cash flow for the week in case a player doesn’t pay on time. It’s important to have a bankroll large enough to cover any bets that your player will make.
It’s also important to keep in mind that your sportsbook bankroll must be separate from your personal checking or savings accounts. This is not money that you pay your bills with or an emergency fund that you need to access if your car breaks down. Think of your bankroll as gambling money or an investment. Never gamble or invest money unless you’re willing to lose it all.
How Much Money Do I Need To Start
Your bankroll size depends on several factors. How many players you have and how much they wager are the two most important factors. Let’s say you have 20 players and their weekly limit is $1000, you should have a bankroll of at least $10,000 on hand. This is because you know not everyone is going to be winners at the same time, but you are covered in case several players go on winning streaks.
Understanding your players is also a key to having the right-sized bankroll. If your players are small rollers, meaning that they don’t usually bet more than $100 on games, you can get away with a smaller bankroll. But if you have a high roller who is continually maxing out his daily and weekly max, you need to maintain a higher bankroll in case he has an unusually good week.
Setting casino limits is yet another way to control your exposure and keep your bankroll in check. The limits available for this are:
- Max Win Per Day
- Max Win Per Week
- Max Loss Per Day
- Max Loss Per Week
Your Bankroll Is Scalable
The great thing about your sportsbook is that it’s scalable. This means that if you’re just starting out and you only have a few players, your bankroll can be just a few hundred or a few thousand dollars. As you gain more and more players and the amount that they are wagering grows, your bankroll needs to grow as well. The bookie software infrastructure allows you to keep track of all limits and tickets.
Weekly limits are also a great way to ensure you don’t go over your bankroll. You can set your weekly limits to whatever number you like to ensure that you can cover your players’ winnings. As your sportsbook grows you will become more comfortable with the weekly cash flow and can increase your limits accordingly.
It’s important for local bookies to understand what a layoff account or layoff bet is, and it’s even more important to understand how and when to use it. A layoff bet is simply a bet that bookies make to hedge against their potential losses. The best way to understand this is by example. Let’s say that the Chiefs are playing the 49ers and the Chiefs are favored -7. Your sportsbook is getting a lot of action on the Chiefs to cover the spread. If you’re concerned about your bankroll being able to cover those winnings, you can place a layoff bet (on a separate book, your “Layoff Account”) for the Chiefs to cover the spread, the same bet as your players. From here, two things can happen:
- The Chiefs can cover the spread, which means you will win your layoff bet. Your players will also win, and you can use the winnings from your layoff account to pay your players.
- The 49ers can beat the spread, in which case your players lose their bets (you make lots of money off of that), but you also lose your layoff bet, so some of your winnings will go toward paying that loss.
Layoff bets and layoff accounts are an important tool for the local bookie to use, but it’s more important to know when to use it. And when not to. Frequently using layoff bets will severely limit your ability to make a profit on your sportsbook. The reason is that a sportsbook is a gamble, for the player AND for the bookie. Statistics show that players lose more than they win, which is why casinos and sportsbooks almost always make money. But when you use a layoff bet, you are reducing or eliminating the risk that you’re taking, but you also reduce your ability to turn a profit.
(Un) Balanced Books
A balanced book means that you take equal bets on either side of a game or event so that whatever the outcome, you have an equal amount of winners and losers. This almost never happens. Most games have a side that is clearly favored, and the betting line will reflect that. Just as we talked about in the last section, you need to take risks as a bookie in order to make money. Unbalanced books are the potential for large gains for you.
Wager Alerts and Bet Ticker Tool
Pay Per Head websites have a plethora of tools for bookies to monitor their players and the action thanks to the sportsbook software. One of the best tools for staying on top of wagers as they happen is the Wager Alerts tool. This feature sends you an email every time that player places a wager. This is a great management tool if you are just starting out with a few players, or also if you have a few high roller players you’d like to keep close tabs on.
Another tool that makes bookies’ lives easier is the Bet Ticker Tool. This gives you a continuously updated list of all wagers placed on your sportsbook. Within the price per head bookie software control panel, click the “bet ticker” option. With the click of a button, it sorts the wagers by dollar amount and highlights them different colors based on the amount. It even plays a different sound when each category of wager is placed. These features make it simple to monitor the wagers on your sportsbook in real time.
Bankroll management may be the most important aspect of your sportsbook for a local bookie using pay per head software. Understanding how large a bankroll you need, and how to ensure your payouts don’t exceed your bankroll is key to a successful sportsbook.
We talked about how much money you will need to start, and about how your bankroll is scalable to the number of players you have. We also discussed layoff accounts and layoff bets, and how they can help you balance your book, but also how it’s unreasonable to expect your book to always be balanced. Finally, we discussed several tools available to you on your PPH website that allow you to monitor your players and their wagers to ensure you never go over your bankroll.
Remember, you can start off with small weekly limits if you have a small bankroll to begin with. As you get more comfortable with the process, you can always increase the weekly limit. With your new understanding of bankroll management, now is the time to request a demo account. With a demo account, you can explore the pay per head sportsbook and use some of the tools that we talked about here. Head on over to PPHSportsbook.net to request your demo account today and put your new knowledge to the test.