Becoming successful as a sports betting company these days is a challenge that few providers are up to. It is all the more important to avoid critical mistakes that could stand in the way of the success of your own operation. The following article highlights 4 of the most common mistakes betting companies make that we have observed in the market.
1. Lack of knowledge of the market
The most important and fundamental question is which market you want to be active in as a sports betting company and which target group you want to serve. A large part of the further considerations regarding the products and the offer of the own betting platform as well as the corporate strategy are based on these 2 decisions.
Often a betting provider decides on the domestic market, which can bring a number of advantages – you know the market, the customers, the legal situation in your own country and the competitors very well. Depending on the market situation, however, it can often make more sense to also consider other markets. or example, your own national market is already well covered or if the market entry barriers are too high. Each market brings its own challenges and requires some background knowledge in order to be able to assess market habits. These include, among other things, the legal framework, betting habits, player demographics and payment habits, as well as the general attitude towards sports betting.
Regulated markets, i.e. those in which the organization of sports betting requires the existence of a valid license, represent a frequent challenge. Many prospective betting providers make the mistake of not finding out about any regulations and applicable license requirements early enough. However, a license application must be carefully considered and planned into the corporate strategy, since such procedures not only entail considerable expenditure of time and money, but the whole company also stands or falls with them.
What payment methods does your sports betting company offer?
The range of payment methods is also closely linked to the regulation of a market. This is highly relevant for the acquisition of new customers and the success of your own betting platform. This is especially important as hardly anyone bets where they cannot simply deposit with known payment methods. The choice of payment methods depends on the payment habits in the respective market, but also on the availability of payment providers. The latter is often tied to the compliance guidelines of the respective payment provider and the existence of a valid sports betting license.
Read more about current payment trends in sports betting.
The range of products that are suitable for the target group and the market also requires strategic planning. Here, the preferences and requirements of the players and the offers of the competition, must be taken into account. In order to ensure optimal positioning of your sports betting company on the target market knowing your audience makes the difference. Vendors often make the mistake of using copycat strategies in the hope of being able to reproduce the success of their competitors. However, this is not advisable – customers who want to play with the competitor will continue to do so. Why would they switch over? Also the costs of convincing a player to play on the new (but nevertheless similar) platform are extremely high and are often a losing bargain. It makes much more sense to address new player demographics and to open up new market segments with innovative products.
2. Marketing without a strategy
Efficient marketing represents both the path to success and a special challenge for sports betting providers. In addition to a correspondingly attractive sports betting offer, targeted advertising is essential for creating brand awareness, acquiring new customers and long-term customer loyalty.
The marketing measures of a sports betting company must reflect this strategy and support its implementation. It is essential to always keep an eye on the current growth phase and the size of your own company – copycat strategies implemented by other companies, on the other hand, can pose problems for your own company (e.g. high bonus costs) if the sports betting company used as a reference turns out to be a problem is in a different phase of maturity.
In addition, promotion and marketing campaigns must be precisely tailored to the various groups of players and their requirements. Aimless bonus offers not only lead to high costs for the provider but also to enormous wastage if the wrong customers are addressed with them. In addition, the sustainability of a marketing strategy always has to be weighed up. If customers are convinced of their own betting platform with the help of expensive bonus marketing alone, these customers can also be quickly lured away by bonus incentives from the competition.
Correct planning and implementation of its marketing campaigns is therefore essential for the sustainable success of a sports betting company. This includes not only the adjustment to the different phases of the customer life cycle, but also the ongoing control of the performance using meaningful KPIs – because without an intelligent marketing strategy it is impossible to focus your own resources (time, capital) on the measures that actually work.
Read more on the topic of successful marketing in sports betting.
3. Inadequate risk management
Risk management processes are the backbone of any sports betting operation. It makes running a sports betting company a viable business model rather than literally gambling.
Trained bookmakers are able to adapt the range of leagues, events and markets to the target market, as well as to manage the risk and thereby ensure security for the company. Risk management processes are therefore very important for the sports betting operator; they have to be planned and carried out conscientiously and require ongoing evaluation.
The know-how and experience required for professional risk management are often underestimated, especially by betting providers with less experience. Risk management requirements can only be met in-house with a dedicated team of trained bookmakers and risk managers. In addition, the internal risk management processes should also be supported by the sports betting software in order to ensure smooth processes.
For many betting providers, it is therefore advisable to outsource the risk management processes, especially at the beginning of their own operation. At Arland, we offer our customers the opportunity to use our bookmakers’ many years of know-how for their business and thus quickly become successful in the market.
With the help of MTS (Managed Trading Services) from BETRADAR, a large part of the risk management can also be outsourced, which can significantly reduce the size of the risk management team.
Read more on the topic of successful risk management in sports betting.
4. Missing out on growth opportunities for your sports betting company
If a betting provider begins to grow with increasing success (more customers, higher sales, etc.), this growth must also be strategically supported by its own betting platform.
The platform has to support the processing of increasing amounts of data, the development of new products and a growing offer. All of these aspects require cost-efficient scaling options for software and hardware, as well as development options optimized for the requirements. Since running a sports betting company is a long-term affair, it is advisable to focus on quality and flexibility over low-cost alternatives when choosing the platform – because what looks tempting and cheap at first, can already prevent further growth in the next year. A betting provider should therefore plan opportunities for sustainable growth right from the start. Nobody likes to miss out on growth opportunities later on.
Arland’s new iGaming platform Bookmaker NEXT offers betting providers a flexible all-in-one solution for implementing their corporate strategy. The various business models support the requirements of betting companies of all sizes. In addition, the BM NEXT API offers numerous opportunities for diversification in that new products and front ends can be easily integrated and developed.
You can find out more about Bookmaker NEXT here.
Experience and the necessary know-how are crucial for success in the sports betting industry. New betting providers in particular or companies without industry experience are often faced with challenges that are difficult to master on their own.
With more than 23 years of experience in the iGaming industry, the Arland Group of Companies offers consulting for the successful development and operation of your betting company. Would you like to find out more? Simply write to us at [email protected]!