Creating your own online sportsbook is definitely a lucrative investment. If you were to do this ten or more years ago, you would have needed a lot of money and resources to do this. But nowadays, technology has made it very easy, and very affordable, to open an online sportsbook. If you are wondering about the cost to open an online sportsbook, look no further than this. Today, we will walk you through the easiest way to be a bookie, without having to spend an arm and leg to do so.
Initial Cost to Open an Online Sportsbook
Opening a sportsbook involves several upfront expenses. As a bookie, the software or infrastructure that you will use to create a sportsbook will be your biggest investment. But it doesn’t mean that it would be your most expensive one.
This is because you will be using what most bookies use today: a Pay Per Head Bookie solution. This business model gives you access to software that will allow you to easily create and manage an online sportsbook. The cost of doing this is charged per player, or per head that places a bet in your sportsbook each week. The prices for these services vary from $2 to $30 per player. The rate depends on the provider and what they have to offer.
These companies will often ask for a deposit to use their software. Some will have free trials, then will charge you after the trial is over. Either way, you should allot a small amount to cover this. Providers can ask anywhere from $25 to $200 as a deposit. Eventually, they will charge you the actual price, minus the deposit. Thus, the upfront cost to open an online sportsbook will vary.
Back-Up Fund
A significant initial expense is establishing a reserve fund to cover potential payouts. The size of this fund can vary widely based on your expected betting volume and risk management strategy. You can look at how much your players wager and get an estimate. If you have a small operation, maybe a few hundred or a thousand or two would help cover this. Of course, with successful line management, you will not need it. But the funds have to be there in case the worst-case scenario unfolds.
While this seems bothersome, all businesses do this- you need to be able to fund your operations for a certain period. It won’t be an outright expense anyway, its simply funds to have on hand just in case. So when you compute for the cost to open an online sportsbook, make sure to include this in your budget.
Ongoing Operational Costs
The primary ongoing expense in a pay per head sportsbook is the per head fee charged by the software provider. All you need to do is get the per player fee and multiply it by each active player you have each week. If you have a small operation, a few hundred should cover you for the week. Technically, the cost of this will be coming from your revenue, but it helps to maintain a revolving fund so you are always liquid.
Marketing and player acquisition costs are another significant ongoing expense. These can fluctuate widely depending on your strategy. This includes promotional offers, and bonuses to attract and retain players.
If you are looking for a pay per head provider to help you start a sportsbook, we can help you. These pay per head reviews give you an insight into different providers, their rates, and services. Furthermore, these providers will give you their expert opinion on whether you can trust these providers or not. With the right pay per head software, owning a sportsbook will be easy. And you can do it without having to spend thousands of dollars in the process.
