Every beginning is difficult – that’s also true for starting a sports betting business. That’s why as a prospective sports betting provider it is all the more important to ask the right questions right from the beginning in order to position yourself correctly. The following 5 questions form the basis for a successful sports betting operation.
1) What is my target market for starting a sports betting business?
The most important and fundamental question is which market a sports betting operator aims to be active in. Often the decision is made on the domestic market, but there are many factors to consider, which is why it can often make sense to also consider foreign markets (example: German provider starts in the Austrian market).
The following considerations are crucial for these decisions:
- Is sports betting regulated in the respective market?
If yes, read more under 2) License
If not, what is the legal situation on the market? How do other providers offer sports betting in this market?
- How big is my target market and how popular is sports betting in that market?
Statistics and precise market analyzes can often be used for this purpose.
- Who is my competition?
A detailed analysis of the competition provides important information for later considerations regarding positioning on the target market. An analysis of the offer, as well as the processes and the look & feel of the platforms are important here.
- Which channels are available for my marketing?
The choice of marketing channels depends heavily on the regulation of gambling advertising – more information on this can usually be found at the relevant authority of the respective country. In addition, the popularity of different channels differs between the individual countries (print vs. online vs. TV).
2) How can I offer sports betting in my target market?
License
When a market is regulated, there is usually a state-regulated licensing process. In order to be able to offer legally, the sports betting provider must obtain such a license. This is why it’s an important aspect to consider before starting a sports betting business. The license requirements vary from country to country and can be found with the relevant authority of the respective country.
Basically, the requirements revolve primarily around the platform and the issues of compliance, youth and player protection (KYC).
Read more about the challenges that KYC processes pose for betting providers here.
Payment
The range of payment methods is extremely relevant for the acquisition of new customers (nobody is going to bet where they cannot easily deposit and use known payment methods). Choosing payment methods usually 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 and thus represents one of the greatest challenges for new and existing sports betting providers alike.
Most likely the easiest way to assess payment habits is to analyze the competition in the respective market.
Bookmaker NEXT offers a large number of already integrated payment providers and payment methods for a wide variety of markets, which allow quick market entry and new integrations are possible at any time.
3) Who will handle my risk management?
Risk management processes are the backbone of every 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. The risk management processes are therefore very important for the sports betting operator and must be planned and executed carefully.
There are 2 options for the risk management:
1. Own risk management
With your own team of trained bookmakers and risk managers, the requirements for risk management can be met in-house. The internal risk management processes should be supported by the sports betting software.
Arland’s Bookmaker NEXT, for example, enables targeted risk management through a range of comprehensive risk management tools based on the loss limit approach and covers all areas necessary for successful risk management. Limits can be flexibly configured and risk managers are automatically notified when a limit is reached so that they can react as quickly as possible.
Arland will be happy to advise you on how to set up your risk management team. The skills of your team can then be expanded through targeted training and workshops from Arland.
2. Outsourcing of the risk management
Often there is also the option of outsourcing your risk management processes to the software provider. Arland, for example, offers its customers the opportunity to use the many years of know-how of their bookmakers for their business.
With the help of MTS (Managed Trading Services) from BETRADAR, a large part of the risk management can also be outsourced, which drastically reduces the necessary size of your own teams. This means that only employees are required who determine the sports betting offer for the platform.
4) What betting platform do I use for starting a sports betting business?
Software/Hardware
The sports betting platform is at the heart of any sports betting operation. The decision for a software provider when starting a sports betting business is often not easy and depends on various factors. Here you find a list of the most important ones:
- Quality of the platform (experience of the provider)
- Range of frontends/products (read more about the Bookmaker NEXT frontends here)
- Customizability/Options for diversification
- Integration of payment providers
- Integrations of third-party products (e.g. Casino, Virtual Sports)
- CRM, CMS and risk management tools
- Odds feed integration (see also part 5)
- Compliance options
- Costs (set-up, revenue share, monthly fees, etc.)
5) Where do I get my odds from?
The events and odds for the sports betting platform are provided via the data feed. With odds suppliers, however, there are significant differences in the offer, quality and pricing, which must be taken into account. In addition, it must be reviewed which software provider is integrated with which data feeds, because not every software supports every feed.
Bookmaker NEXT’s offer is currently based on the powerful Unified Odds Feed (UOF) by BETRADAR and the Betgenius Feed.
Arland’s software Bookmaker NEXT provides you with an all-in-one solution for your sports betting company.
The Arland experts will be happy to advise you on starting a sports betting business! If you are interested or have any questions, just write to us at [email protected]