This Comprehensive Guide to Understanding Pay Per Head, goes over what a Pay Per Head (PPH) is and what it does for bookies.
Opening a sportsbook can be a fulfilling and profitable endeavor for someone who loves sports and gambling on it. However, in today’s sports betting market, it is difficult to compete against large gambling corporation. Thus, this is where the Sportsbook Pay Per Head solution enters the picture to equalize the playing field.
According to bookies, a Pay Per Head is like a beacon of light for small sportsbook operations. This is because it allows them to compete in a market where companies with deep pockets have the advantage. In short, a Pay Per head is a bookie’s best friend.
Pay Per Head through the Ages
Over the years, the Pay Per Model has undergone several changes since its humble beginning. According to the history of the Pay Per head Industry, the first PPH model became around the mid-1990s. Since it was a new technology and the competition was sparse, they would charge $40-$65 per head.
As the internet became faster and online technology became better, so did the PPH industry. Thus, they underwent several changes into what it is today. For example, there is no longer a need to have a huge call center as most people place their wagers on their smart phone. Thus, PPH sportsbooks were able to cut down on cost and pass it down to their clients.
Another Pay Per Head milestone is switching to a tier-payment model that encourages bookmakers into being more successful. PricePerPlayer.com gets the credit for having the first transparent tier-payment model. Before then, a bookie had to call the Sportsbook PPH provider and negotiate a more favorable rate.
Today, Pay Per Head providers have a much larger sports betting markets available to them. In the early days, it was much more expensive to acquire a variety of betting lines. This is because at the time, there were only a few odds providers like LVSC and Don Best.
Furthermore, thanks to better pay per head software, bookies now have better management tools. This includes more detailed reports so they can track their pay per head metrics and KPIs to better risk management tools.
Understanding the Pay Per Head Bookie Model
How does it Work?
The Pay Per Head Sportsbook Model is a payment model where clients (bookies) pay for using a third party’s sportsbook software and infrastructure. Therefore, instead of buying or leasing the sports betting software, the bookie only pays for what his customers (players) use. Hence, the use of the word “Pay Per Head,” “Pay Per Player,” or “PPH” to describe it.
The phrase “Per Head” stems from the Latin phrase “Per capita” meaning by “heads” or “for each head.” Its original use was to state a cost or amount to indicate the cost for each person. Thus, it was originally used like “the dinner is $20 per head.” It later evolved into a business model by several companies.
However, what differentiates them from other such models is that you only pay for what your clients use. In the case of a Sportsbook pay per head, bookies only pay when their customers (players) place bets in your sportsbook. For example, a bookie has 30 players and 20 players place 1 or more wager during a week. The bookie would then only gets charged for 20 players by the PPH provider.
The Three Main Elements of a Sportsbook Pay Per Head Service
Sports Betting Software – This is the software that allows players to place their wagers on sports betting event via the player betting site. It includes a program that lets you create, edit and integrate sports betting lines from lines providers. Furthermore, it keeps tracks of all wagers made by bettors as well as grade wagers, keeps track of deposits, payouts and bonuses.
Thus, the sports betting software is essentially a database that keeps track of wagers, betting odds, banking and player balance.
Player Betting Websites – The Player Betting website is the actual application that bettors use to place their wager. The betting site also keeps track of a player’s open bets, betting history, and their balance. In addition, it lets them request payouts, make deposits and a variety of other features a sportsbook may have available.
Pay Per Head Software – The PPH Software is the interface that lets bookmakers control their entire sportsbook operation. Thus, it gives them access to control most of the features of the sports betting software. This includes managing and creating player accounts like player settlement, banking and other gambling options.
In addition, a Pay Per Head Software also includes reports and tools to properly manage their sportsbook.
The PPH software will vary depending on the PPH company but essentially, they all do the same thing. It is just that some will have more options than others.
What Bookies Gets from Using Pay Per Head Software to Run their Sportsbook?
Different Pay Per Head providers will have different tools and options. However, the basic pay per head software and gambling options will remain the same. Here is a list of what the majority of PPH Companies offer.
A Variety of Gambling Options for Sportsbooks and Bookie
The biggest draw for using a Pay Per Head are the gambling options that they provide at a very affordable price. Buying the sports betting software and platform will cost between $250,000 to $500,000. However, that is just the beginning as sportsbooks also have to pay for lines feeds, servers, software updates and more. Thus, a PPH manages to keep the cost of these options by spreading the cost amongst their customers.
If you want to give your players the full sportsbook experience, then you would also have to offer other betting options. Of course, the more options you offer your bettors the higher the cost. However, Pay Per Head Sportsbook providers several gambling options for your players at no additional cost. These gaming options include:
- Live Betting – Most pay per head will provide live betting to their clients at no additional cost. Just be aware that some companies will offer basic in-play betting for free and offer their premium live betting options at an additional cost.
- Racebook – This is a standard part of most Pay Per Head Bookie. However, the number of racetracks available will vary depending on the PPH company.
- Digital Casino – An Online casino is standard with most Pay Per Head Sportsbook. However, the games available will vary from PPH to PPH.
- Live Dealer Casino – Most premium Pay Per Head will have a live dealer casino for free. Only a few companies will charge an extra fee for it.
- Lottery – The majority of Sportsbook PPH companies do not have this option but a few do for an extra fee.
- Poker – No many PPH services offer a poker room but the ones that do will charge an addition cost. If a bookmaker has the right type of players, having a Poker room can become a big money maker.
Pay Per Head Sportsbook Management Tools and Features
The next advantage in use a Sportsbook Pay Per Head are the Sportsbook Management Tools and Features. This is where the Pay Per Head Software comes into play. In essence, all PPH software provide the following:
Finance and Banking – Allows Bookies to keep track and manage of all financial aspect of the sportsbook like player settlements and bonus management.
Reports, Metrics and KPI – A normal Pay Per Head application will include several types of reports to measure their sportsbook Metrics and KPI. These reports are essential for a bookie to measure the health of their sportsbook and for player risk management.
Player Management – This is where a bookie can set player limits as well as manage their access to certain gambling options. In most cases, the player management tools include player profiling, and communication applications.
Lines Management – While not all Pay Per Head offers this option, top-tier PPH companies will have it. This allows bookies to create and edit their own betting odds as well as set odds on individual plays for bettors.
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