How to Become a Bookmaker – Payment and Collections

paymentAny successful bookmaker will tell you that the key to running a business that generates a profitable return not just in the short term, but over the long haul requires a payment and collection system that effectively maintains an ongoing flow of cash, creates an acceptable profit, and minimizes risk and exposure to bad debts.

Any business needs a certain amount of cash on hand to operate, especially in the bookmaking business. As you begin to build your client base, you must have the ability to quickly and efficiently payoff winnings as well as collect any money owed. At times you will pressed for cash if a large percentage of your clients suddenly go on a winning streak as you may not always be in position to balance things out with the clients on the losing end of their wagers. While you will always need a certain amount of cash on hand, the best way to stay ahead of any sudden liability is to maintain a steady cash flow over your entire bookmaking service.

As a bookmaker you make your profit on the vigorish, which is the commission you earn on every wager you book. This ‘vig’ or sometimes referred to as ‘juice’ is normally 10 percent of the amount of the actual wager. If your client wagers a dime ($1000) on a football game, your cut whether he wins or loses is $100. The key to running a successful bookmaking service is to try and always maintain a ‘balanced book.’ Your betting book is considered balanced when the amount of money that some of your clients have won is as close as possible to the amount of money that the rest of your clients have lost. Always remember, as a bookmaker you are not necessarily concerned with winners and losers rather making sure you play one off the other to balance things out. This way you are able to walk away with a healthy profit from the vig.

The final key to a payment and collections system is to minimize your exposure to bad debts. It is never wise to act as the bank for your clients. All the major sportsbooks have a standardized system of accepting deposits and issuing withdrawals and so should you. There are a number of ways that money can be transferred today and you should always try and utilize as many as possible for your client base.