Money and PPH

pph

With the explosion of legal and regulated sports betting in many countries, a lot of entrepreneurs are interested in learning about the potential profits that can be made as a bookie.

Calculating exact profits is impossible, but we can give you some educated estimations.

What Is Hold Percentage?

The “hold percentage” is the amount of revenue a bookie gets to keep after paying out winners and collecting from losers. You can expect to have a hold percentage between 5%-10%.

In the legal US sports betting market, the hold percentage varies by state, but the average is 7.2%.

From June 2018 to April 29th 2021, legal bookies in the US had a $50,344,064,855 betting handle and they earned $3,606,481,501 in revenue, which equates to a 7.2% hold percentage.

Here’s the formula to calculate hold percentage:

  • Revenue / Handle * 100 
  • $3,606,481,501 / $50,344,064,855 * 100 = 7.16 (Rounded up to 7.2)

How Much Money Can I Make as a Bookie?

Now that we know the average hold percentage is 7.2% in the legal US market, we can use that data to make some estimations on how much a bookie will make.

There’s a lot of money that bookies can make, but it’s reliant on betting turnover.

  • Example #1: You have ten players as a new bookie and each player bets an average of $2500 every month. Using a theoretical hold percentage of 7.2%, you’d have monthly revenues of $1800 before you account for the cost of a PPH service, marketing and any other expenses.

As you can see, it doesn’t take a lot of players to start earning a healthy side income.

Let’s look at another example, but use numbers an established bookie might see in a month.

  • Example #2:You have 100 players and each player bets $5000/monthly on average. In this example, the bookie would earn $36,000 in monthly revenues before expenses.

Even if you’re spending $6000/month on PPH fees and marketing/advertising, that’s still a huge amount of profit every month. A sportsbook can quickly scale into a full-time income.

Building your business to 100 active players isn’t easy and will take time, but it’s a goal that you can work towards. Getting to $5000/month in revenue shouldn’t take too long for a dedicated person.

Improving Hold Percentage

One way to increase the profits you get to keep is to improve your hold percentage. While a lot of factors are in play, the best per head software sites have the tools to help you increase your profits.

Using the data from Example #1 above. If you had a 10% hold percentage, you would make revenues of $2500 on $25,000 in turnover. A small change in your hold percentage can mean big bucks.

There’s no denying that there are billions of dollars being made in the US alone.

You can carve out a small piece of the pie and live comfortable without having to work a 9-5 again.

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