History of the Per Head Industry

Many years ago, when bookmaking took place in back rooms of ice cream parlors, social clubs, and apartments filled with guys who smoked cigars and drank hard a service industry was created. These guys found out that they could bring in “partners” and utilize their infrastructure more efficiently and profitably. This was the beginning of the agent partner who had 5 to 100 players but did not have access to a call center or good line management.
These were the days before Don Best and sports pagers. A good line manager was a god and information about injuries was as guarded as your bank account password.

A deal was made between the “agent” and the bookie, in exchange for use of the call center and financing, the agent would place his players and only needed to deal with collections and payments. The keywords were makeups and red figures but in the end the agents owed the money and often times they made nothing while the bookies and their associates made all the money.

Starting in 1997, Pelican Sports moved to Costa Rica and started offering a hybrid model where an agent would pay a fee per player for line management, call center access, and eventually internet software. Keep in mind boys and girls, in 1997 there was no internet wagering. In exchange for providing 100% of the financing, the store took 25% of the risk and the profits. Agents could pay a larger fee and give up a smaller percentage or just do a pure split deal where the house got 35% and there was no fee. Many large US based bookmaking operations moved offshore to prevent prosecution and because offshore gambling was perceived as a “Gray” area in the law. A few years later that turned out to be a false assumption when WSEX founder Jay Cohen was sent to prison.

Then the internet opened up and thousands of bookies decided to go offshore and the Per Head Industry was launched. Instantly guys who made their living running scam call centers in the US moved to Costa Rica, Margarita Island, and Antigua and opened call centers and offered pay per head pricing. Many of these startup call centers had limited line management experience and even less sports knowledge. When an injury was announced they looked to Don Best to see if it was important.

It is now 20 years later and the Per Head Industry is now split into two types of providers; the old time bookies who still strive to offer a great product for their Per Head clients and the books offering a no frills product managed by computers and kids that could not tell you the difference between a parlay and a teaser. While there is a place for all types in any industry, it seems that as the prices keep falling there are more and more agents going broke which seem to be contradictory. The pros never lose money, the big established books know how to make money in all markets and understand their role in the industry. When looking to find a per Head shop, look at the infrastructure and the management team….price should be third or fourth on your priority list.