New Business Model – Gambling Convergence

The model is mostly used among Latin American bookies Lately, reports have been arriving of a new, pay-per-head administrative business model, which is currently mostly used by Latin American bookmakers, but may soon expand to other markets. Namely, the model is said to provide player convenience, ease of accounting and financial administration, and business increase through the use of specialized pay-per-head websites. As it was specified: "The basic setup is simple: Instead of taking a phone call from every bettor, the bookie directs his clients to a Web site, where bets can be recorded, tracked and totaled. The bookie can then log on and see who owes - or is owed - money in the coming week. "It is also a drastic departure from the entrenched notion of bookies operating out of basements or back offices, with jumbles of phone-line wires, drop safes and handwritten ledgers." It was added by Steve Budin, a gambling expert who formerly operated an online sports book: “There is always going to be a huge market for local bookmakers because they are the ones who let players bet with credit, with money they don't have to produce. People don't want to give out their credit cards or send money offshore someplace. They like dealing with real people and real cash. These sites just make it a whole lot easier for the bookies serving them.” The sites get paid by bookies who use them, receiving a small fee per client - usually around $20. This gives such sites a major advantage over offshore sportsbooks – they do not handle any betting money but simply offer the players a place to record their bets and the bookies a register for organizing them. An executive of one such company, PerHead, Travis Prescott, in an interview said: “With our setup, everything is streamlined and anyone can run their operation on their own.” He also provided some numbers, stating that the surge in per-head start-ups began some three to five years ago, and estimating that the number of per-head sites operating is “in the hundreds.”