How To Become A Bookmaker

Ever wondered what it
takes to be a bookie?

Some of the giants of
the betting industry – Coral, Paddy Power and William Hill among others – all
started out small before becoming the gambling goliaths we know today.

Just how do you become
a bookmaker and what route should you take? If done right, then you can have a
very profitable and lucrative business on your hands.

You also need a certain
skillset, money to get started, and to decide what type of bookie you want to
be. We’ll cover everything in our step-by-step guide below.

Step 1: Decide Which Route To Take

Man deciding which route to take as a bookmaker

If you decide that
bookmaking is the career for you, then what avenues are open to you? Which of
those is best?

Well, there are pros
and cons to each route, with four options to choose from:

  • Online
    bookmaker
  • On-course
    bookmaker
  • Opening
    a betting shop
  • Combination
    of some or all of the above

Online betting has never been more popular, but the marketplace is somewhat saturated nowadays.

You would need to offer
something different to the mainstream and big boys of betting to attract business.
Incentives like sign up offers and regular promotions are what lures and then
keeps bettors coming back to place their wagers with you.

Be warned: it’s hard to
stand out from the crowd in this area.

If you love horse
racing at your local track, then becoming an on-course bookie is an alternative
option.

There are additional
costs involved, however, for your pitch and it’s worth noting that quiet,
midweek meetings seldom attract big crowds. It can be hard to make on-course
bookmaking pay.

Opening a betting shop
involves more than just getting yourself a license to operate. You have to rent
some real estate and employ staff to help you run the place and that means
additional costs.

A premises license for
the place you lease and personal functional licenses for any people working for
you are also needed. More on those later.

Step 2: Decide How You Want To Set Up

Online bookie vs partnership

Many small-time
bookmakers are family businesses, so do you want to go it alone or become a
partner of an existing firm? That is the broad choice you face if deciding to
become a bookie.

Again, there are pluses
and minuses to both approaches:

  • Being
    an independent bookmaker sounds great, but you still have overheads. There is
    rent and wages to pay if you run a High Street betting shop.
  • There
    are fees like renewing your trackside pitch every year if you are an on-course
    bookie.
  • Taking
    the business online means server costs and license fees apply to whatever type
    of outfit you want to run.

Becoming a partner with
an existing company means you are representing them. Franchises may be granted
for a betting shop or trackside pitch, but you are in effect an employee of that
organization.

That means total
profits don’t go to you and you are on a percentage of takings or a salary
paid.

While there can be
greater security in forming a partnership, it is worth remembering that many
betting shops have been closed by large bookmakers to save on high rent costs.

This has come in
reaction to regulation changes brought in the by the British Government over
the maximum stake for Fixed Odds Betting Terminals (FOBTs).

Step 3: Find Out Which Licenses You Need

Gambling licenses

As noted above, the
gambling industry has strict regulation by the state. This is to ensure ethical
practice and fair treatment of bettors.

You are going to need
licenses and, depending on the type of bookie you are, plenty of them.

As listed by the UK Gambling Commission on its website, the regulator requires you to have some or all of the following licenses:

  • Operating
    License
  • Personal
    Functional License
  • Personal
    Management License
  • Premises
    License

These don’t come cheap,
either.

A license application
has no guarantee of success and the UK Gambling Commission doesn’t return fees
if you get turned down. There are also annual renewal costs attached to
licenses.

With Premises Licenses,
you are applying to your local authority rather than the regulator. These may set
different fees, rates and tariffs depending on your geographical location.

Also be prepared for
the possibility of opposition to your proposal of turning a piece of real
estate into a betting shop.

Why You Need Licenses

Each of the licenses
related to bookmaking serves a different purpose. Knowing about all of them is
essential before you decide to become a bookie.

With an Operating License,
the clue is in the name. Some or all of the following activities must be
specified on your licenses:

  • Non-remote
    general betting – standard if you trade from premises and/or limited for
    on-course bookies
  • Non-remote
    pool betting
  • Remote
    general betting – standard for real and/or virtual events, and/or limited for
    telephone and email bets
  • Remote
    betting host – again for real and/or virtual events
  • Remote
    betting intermediary – if you have trading rooms on your site
  • Remote
    pool betting

Getting those which you
need and also including ones for other intermediary purposes all have different
costs attached to them in terms of fees.

Looking at the remote
general betting license, for example, any bookie operating a gross gambling
yield of under £550,000 per year has an application fee of £2,933 and annual
renewal costs of £3,408.

Obtaining and keeping
this license alone will thus be an expense of £6,341 within 12 months.

Successful bookies who
have over £1,000,000,000 in their annual gross gambling yield pay an
application fee of £25,777 with annual renewal costs of £694,856.

For every £500,000,000
above that threshold, the price to renew increases by £200,000.

Personal Functional License

Personal Functional Licenses
are for people who work for you as a bookie.

Your staff needs to
have one of these in order to be legally allowed to do their job. Employees are
subject to a Criminal Records Bureau (CRB) check to ensure they are
trustworthy.

You need to get a Personal
Functional License for the following staff:

  • Cashier
  • Dealer/croupier
    (if you’re offering a casino product)
  • Gaming
    supervisor (or pit boss)
  • Inspector
  • Security
    personnel

Personal Management License

Before granting a Personal
Management License (PML) to anyone, the UK Gambling Commission wants to be
satisfied that the business model of a bookmaker is sustainable. They are
looking for stability in the people running the show.

These licenses cost
£370 per person.

A PML isn’t just
concerned with the boss. It covers a wider base than just that and includes
members of staff with responsibility for:

  • Strategy
    and delivery of gambling operations
  • Financial
    planning and budgets
  • Commercial
    development and marketing
  • Compliance
    (with the regulator)
  • IT
    provision and digital security
  • Management
    of premises licensed for bingo and/or as a casino
  • Management
    of 5 or more licensed premises within a particular area of the UK

Premises License

Local councils can take
several weeks to process and decide on your application to turn real estate
into a place where betting and gaming is permitted.

Residents in the nearby
area may raise objections. It follows that converting some premises into a
betting shop are easier than others.

Step 4: Work Out Your Budget

budgeting and working out expenses

As you may have
noticed, there are plenty of costs, expenses and overheads involved in setting
up and becoming a bookmaker.

It’s estimated that there are average initial costs of £8,000 to £10,000 just for starting up as an on-course bookie.

Here are some of the
outlays you are going to have to make:

  • Licenses
  • Rent
    of premises (for a betting shop)
  • Light,
    heat and electricity of premises
  • Pitches
    on racetracks (for on-course bookmakers)
  • Staff
    wages
  • Hardware
    (FOBTs, boards and batteries, computers, printers, stands and umbrellas to keep
    equipment dry on-course)
  • Software
    (for printing betting slips, online security and tracking markets)
  • Server
    hosting (for online bookies)

Bookmaker pitches,
officially known as list positions, can be a huge expense depending on the
racecourse in question.

At popular National
Hunt horse racing venue Cheltenham, for instance, some of these have been
valued at £250,000. Prime pitches at York, meanwhile, can change hands for
£200,000.

That is a lot of money,
but these tracks may be the exception rather than the rule.

A lower profile
racecourse will have their pitches valued at significantly less, but it may be
just as if not more difficult to turn a profit from them if demand isn’t there
on track.

It’s crucial that you
budget carefully, then, and have a good financial plan before you kick-start
your new career.

The Skills You Need To Become A Bookmaker

collage of pictures representing skills needed to become a bookmaker

Depending upon the type
of bookie you want to be, certain specific skills may be needed.

In general terms,
however, these traits and competencies will serve you well:

  • Numeracy
  • Negotiating
    skills
  • Leadership
    and management
  • Flexibility
    (reacting to situations)
  • Decision
    making
  • Customer
    service

Numeracy, an
understanding of odds and finance, almost goes without saying for a bookmaker.

You may need to
negotiate with potential betting partners, local authorities and staff, to whom
you also have to show leadership and management.

Customer service is
all-important too, as you can’t make money without people betting through your
service.

Flexibility and
decision-making become especially important if you are an on-course bookie. You
have to decide whether or not you have a strong view about a horse race.

Is a favourite worth
laying and pushing out in the market you offer, or do you just follow what the
betting exchanges tell you as they reveal where the money is going?

Common Misconceptions About Being A Bookie

Be under no illusions,
there is a lot more that goes into becoming a bookmaker than meets the eye.

The first mistake you
can make is by assuming it is an easy living.

It really isn’t,
especially for on-course bookies and those running a betting shop in an era
where online gambling has taken off.

It’s not just a
formality that you will be granted the licenses you need, either. If you fail
in your applications, the UK Gambling Commission has a no-refunds policy.

This leads to
additional costs that, if you didn’t budget for, will adversely affect your
business because you can’t even get properly started without licenses.

If you choose the wrong
favorite to take on as an on-course bookmaker, you can end up losing money.
Developing sound betting judgement is essential.

Trying to just wing it
is a very bad idea indeed.

Is The Bookie Life For You?

bookmakers at race track

So, if you’re
undeterred by all that and passionate about sport, being a bookie could be the
career for you.

First of all, you need
capital investment from the very start if you are to make a business. Strong
financial planning and evidence of sustainability will help persuade gambling
regulators to issue licenses to you.

When pitching to become
a bookmaker, you must have a clear idea and vision of the type of bookie you
want to be. Opening a betting shop means you need premises which means more
licenses, overheads in rent, light, heat, electricity and wages.

On-course bookmakers
must fork out for a pitch and have the technology to advertise prices, follow the
wider betting trends and markets, and create betslips.

If you go down the
online betting route, be prepared for stiff competition, security and server
costs.

With numeracy,
negotiating skills, the ability to plan, manage, lead and make decisions, and
not forgetting a sense of customer service, you might just make it as a bookie.

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