Several business owners and entrepreneurs have become interested in sports betting. Why not? A fast-growing and promising industry, sports betting, has emerged recently. In 2017, the U.S. sports betting market had a value of $270 million, according to Eilers & Krejcik Gaming, LLC. Several industry leaders are investing in online sports betting software solutions in preparation for the lucrative industry’s expected growth by 2024, which amounts to $87.75 billion.
Choosing the best sports betting software solution for each business can be challenging due to its many features, specifications, and internal systems. White label or turnkey sports betting solutions may be more appropriate for businesses that are new to the industry. Are you aware of the right sports betting software for your business? However, this blog will discuss how to start a sports betting business.
Let’s first dive into the blog by knowing what sports betting is.
What is Sports Betting?
Betting on sports aims to increase bettors’ profits by allowing them to invest their money more wisely. Simple terms for wagers are bets. Sports are offered for betting, including tennis, football, mixed martial arts, track cycling, horse racing, basketball, rugby, and baseball. You can also bet on the matches or tournaments during the events.
Business Scope Of Sports Betting In 2024 – 2026
Technological marvels are transforming every industry. There is no exception to this rule in the sports betting industry. The advancements in machine learning, anxiety-free payment methods, the growth of artificial intelligence, etc. Sports betting has grown tremendously due to these factors.
According to forecasts, online sports betting is expected to reach $87.75 billion by 2024 and $123.5 billion by 2026 (Source).
In this article, you will find a complete and comprehensive guide on how to start an online sports betting business.
Explore the Top 6 things to analyze for Starting Sports Betting Business
Be aware of your audience
Knowing your target audience and customers is an integral part of the process.
No matter how good your sports betting site is, you will not succeed without customers. To learn how to start a sports betting site, you need to identify your target audience, determine where they are, and how you will reach them.
Exactly who?
The world’s population exceeds 7 billion. Your target audience needs to be narrowed down to success as an online betting entrepreneur. This information will help you tailor your marketing, products, and offerings to maximize the number of clients you can serve.
Sports betting sites can’t be made to fit all. Create a product that caters to a specific segment of the market instead.
In what location?
Incorporating and licensing in the right jurisdiction will depend largely on your customers’ location. People can receive services under different conditions and from different jurisdictions.
Sports betting is popular in certain countries. Several countries, such as the United Kingdom, Australia, New Zealand, Canada, and Italy, are very popular with sports betting. Online sports betting is the most popular form of online gambling in Scandinavian countries, such as Sweden. When considering your target audience, consider Russia, Hong Kong, France, and Malta, small EU states.
Exactly how?
Your last step should be to think about how you will reach them. In addition to running an online sports betting service, you will probably offer an app, an in-browser app, or regular gambling through a browser.
Will you focus more on computer gambling or optimize for mobile? In addition to advertising and marketing, you should consider how to get their attention.
The marketing and advertising strategy might not have to be written now, but you should consider it.
Product knowledge
After establishing your target audience, you can move on to the product itself. Sports betting online is something you want to offer, but you need to find your niche in the sector.
Find your niche by studying your competitors
Observing what your competitors are doing in the online sports betting market is essential. Additionally, you should also look at what they aren’t doing. One of the smartest things you can do is to analyze the existing products, their quality, how well they work, and what angles are missing. In addition to meeting current demands, you aim to create a platform with a competitive edge. Consider the following questions:
- Are you going to offer to bet on any sports? Clients’ locations can play a role in this. There is a preference for different sports, including rugby (league/union), American football/soccer, horse racing/dog racing, tennis, cricket, athletics, and car racing in different locations.
- Are you going to offer fantasy sports betting? A lot of attention has been paid to this emerging industry in the past year.
- Is it possible to bet on eSports tournaments? Over the last year, eSports has gained popularity and become a legitimate sport.
- Is it appropriate to offer wagers on economic, political, and social events other than sports?
- What are your plans for non-mainstream and niche sports betting?
- Are you planning to offer other types of gambling and sports betting?
Assessing the local and international markets and answering these questions will help you create a product that is wanted but also offers something that isn’t offered elsewhere.
How to Start a Sports Betting Business Plan?
In a business plan, you outline all of the plans you have for your company. License authorities, regulators, investors, banks, and third parties are expected to see it. In addition to guiding you through the process of going live, the plan will also be used to determine what steps you need to take.
It is essential to include the following in a plan:
- An executive summary: A concise description of what you will offer, how, why, where, and to whom will be provided. Your sports betting site will be presented as a solution to the market research you conducted. The executive summary will also summarize each subsequent point of the business plan.
- Overview of the business: This list includes the company’s name, its legal structure, the jurisdiction where it is incorporated and licensed, what type of company it is, what product lines it offers, who the target audience is, and where it is located.
- Plan of operations: Includes office setups and who is responsible for which tasks and sections of the business; this will describe how the business will function.
- Analysis of the market: Here, you will provide a broad overview of the entire market, including up-to-date data, demographics, and how you will serve them. Furthermore, you will find out who your competitors are and what the future holds.
- Services and products: This section describes your exact product, including the brand, the type of betting and betting you will offer, and the platforms you will support.
- Marketing and sales: Describe what your product can do for your target audience, including pricing and sales information. The strategy for marketing and advertising is also included.
- Team management: The role of the senior management team, their responsibilities, and what they bring to the company are all detailed here.
- Plan your finances: The information you need includes budgets, financial resources, investments, loans, the cost of setting up the business, and ongoing expenses. Also included will be a forecast of revenue and profits for the next 1, 3, and 5 years.
- Information from third parties: Describe who your partner is, why they will be beneficial, and their costs. There is no definitive list of business plan formats, and each individual’s preferences may vary.
Start-up Costs for Sports Betting Websites
The costs you need to cover before going live are listed here. Among them are incorporation costs, document collation fees, application fees, sports betting license application fees, and costs associated with setting up processing or payment accounts.
Moreover, you should also consider office expenses such as rent, utility deposits, and bills, as well as the cost of furniture, software, and hardware, including licenses, subscriptions, mobile and landline phones, and water coolers. There are also hiring costs to consider. In addition to headhunting and recruitment fees, salaries, training, and relocation packages, employers must also pay headhunter and recruitment fees.
Then you’ll have to pay for any software required to facilitate betting and develop your website and app. Consider the graphic design, branding, logos, programming, UX, and other programs required to accomplish the task. A generous budget should be allocated to servers, hosting, and IT support.
Ongoing costs
The initial costs you incur are ongoing once your business is up and running. Costs like these should be factored in on an ongoing basis.
- Renewal fees for companies
- Fees charged by corporate service providers
- Accounting and auditing fees
- Renewing licenses costs
- Fees for processing payments and settling claims
- Salaries and pay rises for employees
- Bonuses for staff
- Expanding your workforce will increase your hiring costs
- Taxes included in office rent
- Bills for utilities
- Supplies for the office
- Hardware, software, and licenses that are not included in the original price
- Support for IT
- Involvement in hosting
- Designing and developing websites
- Business, site, and employee insurance
You should remember that as your business grows and expands, your outgoings will also increase. To avoid operating at a loss, you should be realistic with your cost estimates.
Projected Revenue
In your financial plan, you need to create an intelligent projection of how much you will bring in during the first year and each year afterward.
Marketing Plan
The marketing plan includes the following aspects:-
- Social media
- Advertising
- Sponsorships
- Content marketing
- Affiliate marketing
- Multimedia marketing
- VIP and Loyalty schemes
Incorporate a company
- Get Licensed
- Payment processing and settlement accounts
- Processors
- Hire your team
- Set up customer service
- Go live
How can Brino help you Build a Successful Sports Betting Business?
In the field of online sports betting, Brino is the leading software provider. Providing businesses with feature-rich wagering software solutions is what Brino specializes in. Are you looking for a sportsbook betting software solution incorporating all the desired features? You can build your platform with all the features and tools you need using Brino’s custom sportsbook betting software.
Are you looking for a fast way to launch your online sports betting software? You’re in good hands with us. You can rely on us to provide you with feature-packed online sports betting software solutions that feature all the latest functions and tools designed to entice bettors and render best-in-class sports betting experiences. Turnkey sports wagering and white label sports betting software are ready for launch in a few days.
We have helped several companies and entrepreneurs around the globe build successful sports betting businesses through our 8+ years of experience in the iGaming industry. In addition to designing and developing highly functional and user-friendly sportsbook betting software, our teams of highly-experienced QA engineers ensure bug-free betting platforms.
Do you need cutting-edge solutions at highly affordable prices? Get in touch with Brino today!
Frequently Asked Questions(FAQs)
Ans. Most bettors lose money when they bet on sports, so sportsbooks exist to help them. It is often not profitable to bet on sports because of the vig. Because sports betting requires companies to make money, PASPA was struck down in 2018.
Ans. Do Book-Owners and Bookies Make Money? The book’s profit from a $100 bet is split evenly between the bookie and the book owner so that $100 bet will make the book $5 in profit on average. It is common for bookies to receive a commission on their total losses every week.
Ans. Considering the above information, you can expect to spend between $20,000 and $40,000 on developing sports betting software. It will cost about $60,000 to $70,000 to develop a sports betting app with the most advanced features.