Manage your sportsbook money like the professional sportsbook owner that you are with pay per head software
Our sportsbook business is our house and we’ve got to take care of our house. Taking care of our house doesn’t mean pushing wagers; it means taking care of our sportsbook finances by managing our players and our books.
For those of us who don’t have a finance degree, the actual sportsbook money management part can be tough. Keep reading for tips for managing your sportsbook money.
The difference between sportsbook revenue and sportsbook profit
Revenue is the total amount of money you bring to your sportsbook. Let’s take a sporting event like the 2019 NBA Finals. The Toronto Raptors beat the Golden State Warriors in 6 games. Check out the results for each game.
- Game 1 – Raptors 118 – Warriors 109
- Game 2 – Warriors 109 – Raptors 104
- Game 3 – Raptors 123 – Warriors 109
- Game 4 – Raptors 105 – Warriors 92
- Game 5 – Warriors 106 – Raptors 105
- Game 6 – Raptors 114 – Warriors 110
There are two types of revenue for all sporting events with multiple games. There’s the revenue that you got from each game. We call that individual game revenue. There’s also the overall revenue that you got from the 2019 NBA Finals.
Let’s list the results again with made up betting action from each game.
- Game 1 – Raptors 118 – Warriors 109 – $500
- Game 2 – Warriors 109 – Raptors 104 – $600
- Game 3 – Raptors 123 – Warriors 109 – $800
- Game 4 – Raptors 105 – Warriors 92 – $500
- Game 5 – Warriors 106 – Raptors 105 – $900
- Game 6 – Raptors 114 – Warriors 110 – $800
The total betting action on the 2019 NBA Finals is $4,100. That’s the total revenue you received from the NBA Finals. For Game 6, the revenue total is $800.
Now let’s add the juice, sometimes called vig or bookie fees.
- Game 1 – Raptors 118 – Warriors 109 – $50
- Game 2 – Warriors 109 – Raptors 104 – $60
- Game 3 – Raptors 123 – Warriors 109 – $80
- Game 4 – Raptors 105 – Warriors 92 – $50
- Game 5 – Warriors 106 – Raptors 105 – $90
- Game 6 – Raptors 114 – Warriors 110 – $80
In a perfect world, you would have received the same amount of money on each side of the spread. Meaning, you could use the losing wagers to pay off the winning wagers. Let’s say your fee on each game is 10%. In that case, we calculate your profit this way.
$4,100 in revenue – $3,690 total cost of services = $410 in profit
The cost of services, in this case, is your total payout. 10% is your profit. That 10% also accounts for your sales.
This is a good time to discuss the difference between growth revenue and actual revenue.
Companies that sell stock favor growth revenue before actual revenue. Investors buy a stock hoping the company will grow. But sportsbooks are different from stock selling companies.
Bookies don’t get growth revenue. They get actual revenue. You can’t sell shares in your company expecting growth revenue to later turn into profit.
Tips to manage your sportsbook dollars
Check out tips on how to use the line mover and layoff account. Also, here are a few tips on managing your digital and live dealer casino, your digital racebook, and money line wagers.
Be subtle with the line mover.
Don’t overuse the line mover. Vegas bookmakers have much better information than you have. If you overuse the line mover, you can push your players to a different book.
Don’t overuse the layoff account.
Overusing the layoff account leads to lost profit. Before getting into that, we should set ground rules on when to use the layoff account. You start by thinking about yourself.
Ask yourself the following, “What is my risk-level?”
If you’re a risk-taker, use the layoff account less than if you hate risk. It’s okay to be conservative. There’s nothing wrong with always using the layoff account to pocket your fees on every ATS game.
Set betting limits on all future and money line betting options.
Don’t bother using your layoff account for money line wagers. Moneyline wager odds push players towards underdogs. The value doesn’t exist on future and money line bet favorites.
Set maximum win limits on horse races.
Horse race odds are much higher than sports events odds. Sometimes, a single trifecta of a race can pay over $1,000.
Set max win limits for every race. Win limits set a max amount players can profit from a single race.
Open both your casinos for all players.
Make sure your players can wager in the digital casino and live dealer casino. Casino wagers won’t make you rich, but it’s an important revenue stream as it will keep your players in action when there’s no game on.
Manage your sportsbook revenue and profit
With good sportsbook money management, you can take care of your house. By doing the five things highlighted above, you can ensure you turn most of your revenue into profit. For any questions, chat online with us or call at 800-605-4767.