Since the restriction on sports betting was lifted for many states in the US in 2019, sports betting has seen growth globally which makes it one of the biggest economic successes in the world – continuing to rise even as financial instability around the world has seen other industries fall.
Sports betting is essentially placing a wager on the outcome of some sort of sporting event. The most popular sport to bet on is football, with 23% of wagers placed. Horse racing is a close second, but bets can be placed on tennis, cricket, basketball, hockey – and even in some cases the outcome of talent shows like America’s Got Talent or The Voice. Some sports betting bookmakers even take bets on things like who will become the next UK Prime Minister or state governor.
For those who are thinking about setting up a sports betting business, the numbers and extreme growth in the industry will be a huge part of that decision-making process. In 2021, the global revenue from sports betting was $76.75 billion, and it is predicted to reach $122.12 billion by 2030.
However, there are some major considerations that you should be making before you jump on the bandwagon and start providing sports betting services.
Setting up any sort of business comes with built-in costs, but when you are dealing with a regulated industry like sports betting, you need to be aware of some of the specific costs that you will face.
Not only will you need to lease or buy some property (either as an office to work from or a shop front for in-person betting), but you will also have to fork out cash for a website. There are software developers who create online gambling websites, which include full functionality that is needed for customers to be able to create and fund accounts, make bets, and manage their money – but this isn’t cheap. The level of security needed, with attention to user experience is something that comes with a hefty price tag.
All this is before you have even considered things like tax, staffing, and other overheads – like licensing.
Any form of gambling anywhere in the world is regulated – as it should be. Regulation protects customers but it also protects businesses, providing a legal framework in which to operate and access to help when it is needed.
Whichever country you are looking to open a sports betting business in – and wherever your customers are going to come from – you need to ensure that your business holds the correct licenses.
The process of getting a license is different from state to state, and from country to country, but in most cases, there will be an application cost to consider, an overwhelming amount of paperwork to complete, and ongoing fees and responsibilities that you will need to consider.
Starting a sports betting business is a large undertaking, and it is not going to be something you will be able to do on your own.
Partnerships might be the way to go, creating an easy-to-access a pool of knowledge, finance, and skills that can ensure that all areas of the business are covered.
However, finding investment might work better for you if you want to retain more control of the business – you can get financial backing and hire people to complete the management team, focusing on those who have the skills, knowledge, and abilities that you lack.
To get the right investors, you will need to produce a well-constructed, thorough business plan, which looks at all the different factors of creating a business in this industry. This will include all costing, who the competition is, and what your future plans are with details about how it will all be achieved. This is more than just a whiteboard full of ideas; it needs to be good enough to tempt other people to part with their money to support your dream.
This is where it can get tough for a new business just starting out. With the best will in the world, when it comes to sports betting businesses, there are already hundreds out there – from big global companies like 888 and Bet365 to smaller local companies, all already providing betting services to the community.
To be able to compete in this industry, your business needs to have an innovative Unique Selling Point (USP), something that sets it apart from the other companies. What this is will depend on you and what you want to bring to the industry, whether that is excellent customer service or a focus on providing wagering opportunities for eSports in particular.
Setting up a sports betting business is not for the faint-hearted, but with some careful consideration and excellent industry knowledge it can be achieved – the thousands of companies out there offering the service have managed it, after all!