Are Pay Per Head Services Legal in My State
In today’s Gambling911.com Q&A we are asked the question: Are Pay Per Head Services Legal in My State?
The answer to that question is both YES and NO.
Let us explain.
A Pay Per Head service is considered legal in that it operates purely as a call center and management contracting venture. But just likely Ivory Soap is 99.44 percent pure, that .56 percent is enough to keep operators offshore.
Many folks find these services via Google Ad Sense as they are not prohibited from advertising on the behemoth search engine through the gambling exclusion. A legal Pay Per Head does not actually pay out on wagers. Instead, they provide a software platform, customer support and reporting as well as a professionally trained oddsmaking team. Bet tickets, utlized by the Pay Per Head service, are lumped into the gambling paraphernalia category as per some state laws, providing yet another reason why these businesses opt to set up shop in licensed jurisdictions. Think of this as that .56 impurity.
So finding a Pay Per Head in say New Jersey probably isn't going to happen.
Such businesses are found outside the United States almost exclusively in the Central American nation of Costa Rica, which provides inexpensive licensing for data entry and call center businesses, the category for which Pay Per Head businesses fall into.
Often referred to as “Quicken for Bookies”, these legal Pay Per Head businesses charge a small fee (often starting at just $10) per active customer per week in exchange for their services.
While the Pay Per Head business may be legal, booking in the States is not, albiet some states make the infraction a simple misdemeanor.
Bookmakers who opt to use this type of service must act – not like a bookie taking bets – but instead like an affiliate.
An affiliate is someone who refers customers to an online bookmaker or casino and receives a percentage of losses (also called revenue sharing). Such activity is popular throughout the world, especially in Europe.
The Pay Per Head affiliate model is considered a hybrid version in that the individual overseeing a group of clients receives more than 50 percent of the revenues generated but typically do the same amount of work as your typical online casino and sportsbook affiliate who generally receives no more than 35 percent of revenues generated. The only extra work involves the payout process. As mentioned above, the PPH is not in charge of making payouts, unlike the average affiliate or commission program.
So why is it that stateside bookies who utilize these legal Pay Per Head businesses get themselves in trouble?
Probably because they keep on booking.
Taking bets, paying out on bets, managing customers….its all natural instinct for a bookie…but when opting to use a PPH service, it’s time to let go.
Wanna play psychologist to your losing clients by comforting them over the phone?
Nothing wrong with that.
Want to help resolve disputes between a player and call center perhaps related to a grading issue?
Nothing wrong with that either.
Be mindful that in some states it is expressly prohibited to place bets or gamble online. Washington State enacted a measure some years ago that prohibits an individual from betting over the Internet and thus supercedes the archaic 60's Wire Act (we are living in a mostly wireless society today and that law applied to phone betting). More importantly, Washington State makes the act of placing a wager a Class C felony with punishment on par with that applied to a repeat DUI offense and a child predator.
Utah prohibits all forms of gambling, thus one has to presume this applies to Web gambling as well.
It goes without saying you will never want to encourage individuals to place wagers in jurisdiction and/or nations where the punishment is targeted at the actual gambler, especially in regions of the world where the activity is punishable by lashings or even death (i.e. Saudi Arabia).
- Jagajeet Chiba, Gambling911.com
