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Over the years I've encountered new bookies who seem disappointed with their profits, and I've come to understand that this stems from the over-simplistic explanations of how juice works.
Setting Reasonable Expectations
People have been told that juice is the commission charged by the bookie on every bet, however just because a bookie may charge $110 to win $100 does not mean at the end of the day, they make $10 for each losing bet.
How much bookies make depends on their overall hold percentage which is seldom equal to the juice charged on losing bets. To fully understand hold percentages, we need to consider a bookie's gross winnings which are calculated by subtracting the amount of money that needs to be paid out from the amount of money that will be collected. Once we have determined the gross winnings, we can then figure out the real hold percentage, for this, we need to divide the gross winnings by the number of bets accepted.
The hold percentage is almost never the 10% people have come to expect, the reason for this is that there is never the same amount of money and bets on either side of a sporting event. When agents enlist the services of a top pay per head service such as www.AcePerHead.com, they do so knowing that the odds experts who work there have a reputation for posting the sharpest lines, which greatly helps create balance in each game.
Balance is the single most important factor in long-term profits, when there's too much action on only one side, this creates a negative exposure for the agent. Sometimes negative exposure is impossible to avoid, but, the experts have a few tricks up their sleeve to help create interest on the side and reduce the gap.
While sports betting is all about gambling, the only ones who should be gambling with their money are the players, not the bookies, and having inexperienced line managers handling the betting odds will increase the instances where agents are faced with negative exposure, this can seriously impact the overall hold percentage and in turn cut into an agent's profits.
So, what is a reasonable hold percentage?
Because of the balance factor, hold percentages will almost never be 10%, but, when it comes to sports betting agents should expect to be close to a 5% hold, some weeks it will be a little higher and others it will be a little lower. The key, of course, is to have more weeks where the hold percentage is equal or above 5% than weeks where the hold percentage is significantly lower than 5%, and that is what the odds managers over at Ace Per Head are famous for.
The importance of hold percentages when it comes to how much bookies make is because there is a direct correlation between the hold percentage and health of a bookie's bankroll, lower hold percentages mean bookies will struggle with cash flow and this can ultimately drive them out of business.
If you are unsatisfied with your current hold percentage of your regular pay per head, give www.AcePerHead.com a try, I'm certain you will be blown away by the difference.
