Laying off Action
When bookies are taking action in the per head industry, sometimes they may opt to lay off some of the action. Laying off action simply means that you, as the agent, are betting the same side of what your players are betting, in order to minimize your overall risk.
There are many reasons why bookies decide to lay off action on certain games. The main reason is that they have a specific game that they are getting one-sided action on. If they are short on funds, have a bad feeling on that game, or just want to minimize their risk, the agent may decide to also bet that same team with another local bookie or offshore post-up shop. For example, if an agent is getting pounded on the Patriots for a total of 50k in wagers, they may want to bet a certain percentage of that somewhere else on the Patriots as well. This is done to limit an agent’s overall exposure on a specific game, because now if their players win, their own bet also wins, providing some funding to pay the players.
Agents are in the per head business because they are gamblers, and many agents will decide to take the risk, and not lay off a percentage of the wagers. This can be a smart decision if the team that you are getting a high volume of bets on loses; however if that team does cover, it could ruin a good week, or make a bad week even worse. Each bookie agent has varying bankrolls and varying risk levels, so each agent will look at laying off the action in a different way.
If you are a new agent to the pay per head industry it may be wise to lay off a percentage of the action if you have one-sided games. This should obviously not be done all the time, because when you lay off action, you are automatically limited to your winnings when your players lose. It would be smart to use some sort of ratio, or metrics formula, where if you receive for example 90% to 100% of the wagers for a specific game on the same side, then you should lay off 25% to 50% of your total volume, so you can minimize your loses if that team covers. This is good advice for the novice agent, because they usually have a small number of players, and limited bankroll, so this will be able to keep a novice agent in business long if players start off winning early and often. Larger agents may also want to lay off some action as well because they may have hundreds of thousands of dollars or even millions of dollars of action on one side, so they may want to limit their risk exposure.
Agents that are gamblers at heart may let it ride, however they can be put out of business on a few key games. Agents that are looking to have this business for the long haul, may want to consider using the lay off strategy as a way to minimize losses and increase the longevity of your business.