How much is this sportsbook worth?

[ClipJoint]

$100,000 in player accounts
$100,000 in weekly volume
700 customers (not active...total)
Square action (limit/boots winners)
Great reputation for customer service and payouts for 2 years +.

This seems like a small book that would be worth an investment but I am wondering how much this type of book would be worth as I am not sure what the going rate is.

Any insight from you guys set up offshore? All input is appreciated.

 

[JudgeWapner]

I rough guess, would be a million- 2 million.

 

[JudgeWapner]

Just did a little math here. If they write 100,000 a week and lets say a hold of 5%. That would be 5 dimes a week.Or a little over a quarter million a year. So I would think a fair price would be 500,000- a million. I think the lower figure would be a fair price.

 

[WildBill]

If it holds 5% then its generating about $250k per year before costs. Maybe the square focus makes it closer to $350k. I wouldn't pay more than 2 times that with the costs going up these days in running a book, maybe even less depending upon your feel for how effective the marketing program is.

When I approach a book for my investors/clients, I tell them to always use 5% because you just never know. Every book these days tells you they have a superb client roster, with few or no sharps. Don't buy into it, sharps sure still seem to get their plays down.

Asking prices are going up, settle prices are coming down is my feel for the market right now. Not a lot of deals being done because owners still want the jackpot, but can't cover up the fact that offshore businesses face endless market share wars. Rest assured whatever someone asks for it upfront, you shouldn't pay more than 50% of that price. If they insist on more just wait it out, it isn't a business you really want to get into these days unless you get the right price.

 

[ClipJoint]

Great insight...thanks.

The book boots/limits winners but still hold less than 3%. It just goes to show how difficult it is to make it in this day and age online.

Here is what the numbers have been since August 1st:

Volume: $1,102,362
Net loss: -$29,749
Book hold: 2.6%
Deposits - Withdrawals: +$97,591

Keep in mind this is during the busiest time of year also. I would think outside of football season they would only be seeing $50,000 in volume a week.

Also, the book is part of an umbrella of books so they don't move lines/numbers off of the money coming in. I think if the book had its own line manager the hold percentage would increase dramatically.

The volume could be 3-5 times as much if the owner wanted to take all action. I can't imagine the hold % going down too much. Even if you only held 1.5% on $500,000 of volume weekly, that is only $20k a month before expenses.

I would think a book like this would be worth $250k or so. Do you think that is reasonable?

 

[350z]

The hold is terrible.

Doesn't matter the amount of money you got in, all that matters is the hold of the book.

2 to 3 times the expected anual profit AFTER costs would be the price to pay.

 

[JudgeWapner]

That is a terrible hold. Wonder who the BM is. Anyone who knows what they are doing could double that hold, if in fact the customer base is square. 6% is possible with a square clientelle.

 

[JudgeWapner]

If those #s are correct Clip, 250g would be a very good price.

 

[AdamSelene]

I'd guess by that number they also do not have a casino?

Tack a good single-wallet casino package on there, you'll not only push the hold up a few percent, but also greatly increase the handle. Let me know, I can hook you up.


PS. Also a big factor in the price is whether you are buying the book with player balances ($100,000) fully-funded (in escrow) or not?

 

[cattlerustler]

Taking into consideration the last five weeks - the hold looks fine to me. With more input being put into this database - could sqeeze more long term from them.

 

[wolfie_cr]

silly questions from someone not really into the sportsbook market

1) is this credit or post up?, you said 100k in player balances so I suppose this is post up
2) if it has such great reputation I am assuming the URL is part of the package
3) I would like to see the chargebacks % of whatever cc processing company they are using

 

[JudgeWapner]

Checked with 3 shops, all on small side. Lowest hold since Aug 1, was 3.98. So I believe you could def increase the hold.

 

[ClipJoint]

Great feedback from everyone and I appreciate it. Let me address a couple of the comments and questions.

The hold % is brutal and that is what makes it pretty attractive because that would not be too hard to improve. As I mentioned, they are part of a group of books and they are one of the smallest in the group so the lines are moved based on all of the action of all of the books...not the action coming in through this book. So the book could have all one sided action and still be moving the line in the other direction because they only represent a tiny percentage of the volume. That part would be improved upon without a problem.

There is a casino involved but it does not get much action. The software isn't great for the casino.

The player balances are in an escrowed account and would be turned over with the purchase. The balance is slightly over $110,000.

The domain name plus their domain with casino.com and poker.com are included.

$250k seems like a pretty solid price. That is about 2 times what I am assuming the book would show in revenue for 1 year. Then I also feel that the number could be doubled simply by moving the lines for the book based on money coming in and treat it as its own property. The book if run by itself would probably be generating 2-3 times as much with a 5-7% hold instead of 2.6%.

With that volume...if it had a 5% hold (modest estimate for a book that limits/boots winners), that seems like it could be a profitable venture since it has been around and has a solid reputation of paying everyone. That is the hardest part and is priceless in my opinion. Starting up a new book is easy...gaining credibility takes a couple years.

 

[JudgeWapner]

Clip, personally believe it is worth pursuing at 250g.

 

[wolfie_cr]

"The domain name plus their domain with casino.com and poker.com are included."

boy this really gets my attention, what sort of deal is poker.com involved with on this transaction?

 

[ClipJoint]

"The domain name plus their domain with casino.com and poker.com are included."

boy this really gets my attention, what sort of deal is poker.com involved with on this transaction?

It caught my attention also. BUT, they haven't purchased or launched anything with poker yet. It is only the domain.

But at the same time, joining a poker network is only about $10k and you can tie into filled tables.

 

[JudgeWapner]

Clip, just make sure you are properly bank rolled.

 

[ClipJoint]

Clip, just make sure you are properly bank rolled.

Absolutely.

I just feel that paying $250k or so to obtain over $100k in post up money already established is a steal. Throw in an established domain and that is pretty sweet.

Getting the deposits and trust is a big part of the battle offshore. This $100k is not sharp money either. They have booted a lot of steam chasers which also takes a while to weed out normally.

 

[wolfie_cr]

The reason I asked is because there is a very documented "*ucked up " deal between the former owner of poker.com URL and some guys that got that URL leased

Esentially the lease DISAPPEARED at some point and they screwed the guys that were holding a valid contract

 

[ClipJoint]

Wolfie...I am not sure if you are thinking I meant the exact url poker.com and casino.com. I mean xyzpoker.com and xyzcasino.com (xyz meaning the sportsbook name).