Are Pay Per Head Bookie Services Legal?

Are Pay Per Head Bookie Services Legal?

When the US Supreme Court ruled in favor of New Jersey against the federal government in terms of legal sports betting back in May of 2018, the entire US sports betting industry was turned upside down.

In the past, the federal government had enacted laws that made sports betting illegal in most of the US from the bookmaking aspect. The lone exception was Nevada. These laws included private bookies who attempted to run their operations on US soil.

The combination of the Internet and these unenforceable federal gambling laws gave rise to the entire offshore gambling industry, with an added focus on sports. The big commercial offshore books stated to cater to the US market through their million-dollar websites.

The top offshore pay per head companies developed online sports betting software solutions that could be used to let a private bookies conduct their business on the internet as well. This is where the whole question of legality exists in today’s business environment.

A pay per head site provides products and services that allows any bookmaker to run and manage an independent sportsbook online.

Pay per head sites do not payout winning bets and it does not collect funds to satisfy the financial liability of losing ones. That is the sole job of the private bookie.

Weekly per head fees are tied to bookie services that offers a betting software platform.

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They also offer customer support options, access to oddsmaking services and overall management analytics. The collected weekly fees for each active betting customer act as a lease agreement for these goods and services.

The primary reason this is a legal enterprise is the physical location of these pay per head companies. They operate in jurisdictions where their products and services are deemed legal. A perfect example would be Costa Rica.

Just because sports betting is legal in New Jersey does not mean setting up shop as a pay per head provider is also legal. That is why you will not find any bookie service companies with a physical US mailing address.

To keep US-based bookies on the up and up, they technically cannot book sports bets on US soil without a proper license. Sports betting licenses are made available on a state by state basis where this practice has been deemed as legal.

In most cases, legal sportsbooks are associated with legal casino gambling venues or horse racing tracks.

An individual can legally play the role of an affiliate.

This is someone who refers customers to an online book or casino. In return, they receive a percentage of the losses created through betting activities. In most cases, this could be as much as 35 percent.

There is also a pay per head affiliate model as a hybrid business solution.

One individual referring a client base to an online pay per head site can receive more than 50 percent of any generated revenue as part of the referral process. The big difference between the two is that a PPH affiliate is still involved in the financial aspect, paying winning bets and collecting losing ones plus commission.

While it remains a fine line, booking bets as a private individual does come with legal issues in the US. Acting as a PPH affiliate to drive (or refer) betting customers to place bets through this service without booking the bet yourself is generally considered to be legal.