There are definitely some big differences between PPH services and regulated sportsbooks.
The growing number of legal US bookies, such as DraftKings Sportsbook and FanDuel Sportsbook, are regulated on a state-by-state basis and every state charges licensing fees, taxes and more.
It’s extremely expensive to operate a regulated sportsbook and is only suitable for big corporations.
Independent bookies that typically operate locally utilize PPH services. These services allow anyone to launch a sportsbook with horse betting and a full online casino for a small weekly fee.
There are no license requirements. For that matter, there are no identification requirements either.
Thousands of Americans operate sportsbooks using PPH sites. It’s a grey market, but there’s a huge potential to make a lot of money. Billions are wagered in the US illegally every single year.
Major Differences Between PPH Services and Regulated Sportsbooks
We’re going to outline the major differences between PPH bookies and legal bookies.
- Licensing: As we already touched on, regulated sportsbooks require licenses to operate. In the US, legal bookies need to have an active license in every state they operate in.
Licensing is extremely costly and not something an independent bookie could ever afford. This is why local bookies will utilize PPH companies to help them build an online presence.
- Credit vs. Post Up: PPH bookies will work with clients they have a relationship with typically and therefore will work on credit. A local bookie will usually have a collection day each week.
Regulated sportsbooks aren’t working on credit and require players to post up (deposit) funds.
However, if utilizing a pay per head service, you can also run a post up shop for some of your players. You can receive payment and then use the admin panel to adjust the player’s balance.
- Costs: The costs to run a regulated sportsbook are much more than a PPH bookie. Think of all the costs DraftKings has whereas a PPH bookie pays a small weekly fee per player.
Legal sportsbooks need huge teams, including lawyers, accountants and much more. The operating costs are insane and that’s one of the main reasons why PPH bookies will always remain in business.
Can a PPH Bookie Compete With a Legal Bookie?
Absolutely, here are a few ways an independent bookie can push some of the lower operating costs onto their players to keep them loyal and to prevent them from looking at legal alternatives.
Put it this way, if they get more value by betting with you, they’re going to stick with you.
- Better Odds: The legal bookies in the US are charging more than standard commission on many betting markets. Even casual bettors will realize they’re losing out on value.
- Promotions: Offer unique promotions apart from traditional bonuses. One example would be offering a monthly cashback program for your players that lose money.
- Contests: Since you don’t have the overhead costs, you can run a few contests every year during big events, such as March Madness, the Super Bowl or Kentucky Derby.
PPH bookies aren’t going away, but you may need to adapt to a changing industry.
More payperhead tips:
Steps to Build a Business On a Budget
How Can Sportsbook Agents Make Money?
Click Here For The Meaning of Pay Per Head