It seems like sports betting businesses are everywhere these days. Growing a bookmaking business is one thing – getting started is a whole different beast involving a whirlwind of legal and logistical issues. But don’t fret. At OddsMatrix, the leading sports betting data provider, we acknowledge the obstacles up-and-coming bookmakers face in opening a betting business. This article serves as a guide that will teach you how to start a sportsbook in a few easy steps.
Nowadays, a bookmaker usually refers to an establishment that accepts and pays off bets on sporting and other public events at pre-set odds. In addition to wagering, some bookies can lend credit to bettors.
On a general level, the way a bookmaker works (and earns money) is relatively straightforward – by adjusting the odds (meaning paying out amounts using odds rather than what they determined to be the actual odds), bookmakers ensure they gain profit by “balancing the book.”
A sportsbook is another term for an experienced bookmaker that accepts wagers. If that sounds similar to what a bookmaker does, that’s because “sportsbook” is often used interchangeably with “bookmaker”. There is no actual difference between the two.
This is one of those questions that you answer with other questions. What kind of bookmaker do you want to become? Which licenses do you need? How about your budget? Let’s take it step by step:
If you’ve decided to enter the bookmaking business, there are several avenues that you can pursue. Generally speaking, there are four options:
Today, online bookmaking is the safest bet. But while online betting has never been more popular, the competition is fierce. It can be challenging to stand out if you don’t offer something different from the competition – which can range in size from corporations to up-and-coming bookmakers like you.
On-course bookmakers are somewhat of an oddity nowadays. Essentially, they provide instant access to betting on races. In some countries, on-course bookmaking is the only legal form of gambling.
Betting shops are somewhat pricier in the sense that, in addition to an operating license, they require a physical location to get going. You will need to rent some actual real estate and employ staff.
As you can see, there are advantages and disadvantages to each. It’s up to you to decide which avenue is worth pursuing.
The short and easy answer is between $5,000 and $10,000. This range accounts both for the smaller clientele that you will have in the beginning, as well as playouts. Anything less than $5,000 is risky and unlikely to keep you afloat.
Now, as for the long answer, the reality on the field is different than the ideal scenarios drawn out on paperwork. Betting operators are unique in the sense that they’re more reliant on steady cash flow to stay afloat than your typical business. Apart from overhead expenses such as utilities, rent, payroll, hardware, software, fixtures, and so on, a bookmaker must also pay out winning wagers. That’s their primary responsibility – otherwise, the whole operation falls apart.
The process is pretty straightforward. Bookies connect commissions on losing bets. Bookies then use the payouts from the losing wagers to pay out winning wagers.
With that out of the way, how much money do you need starting out? A rule of thumb is that the more you put into your business, the better it will be positioned. You have to consider the fact that there will be some extra fees in the beginning, not including the actual license to operate and unforeseen costs (that B2B solution you thought was the best for you only to have to cancel it).
There is also the fact that casual players put in less money than professional players, so ideally, you will try to attract as many people from the latter category as possible to compensate for the former.
So, to summarize. You will need between $5,000 and $10,000 to get started. However, bookmaking can be a rocky business, so ideally, you want to put in more.
Every country comes with its own set of laws regulating sportsbooks, casinos and any other type of gambling. Some countries may allow gambling, but only in physical locations and not online. Other countries may allow gambling only in specific, specially designated geographic areas. At the same time, certain countries don’t even make the legal distinction between online and physical gambling.
In this regard, you must do your own research. The best place to start is your country’s government website which should outline the dos and dont’s. Alternatively, you can check our frequently-updated list of countries where sports betting is legal as a starting point.
There is no one true way of starting a sportsbook – however, the following steps are universal enough that they should be a great starting point regardless of where you are.
You can have the greatest sports betting service in the world, but it’s all for nothing if you can get actual players onboard to spend money. Thus, outlining a marketing and positioning plan must be item number one on your to-do list.
While there are many ways to go about this, this step can be easily broken down into three, well, steps:
Effective inbound and outbound marketing needs an experienced in-house marketing team to manage day-to-day marketing efforts, which include, but are not limited to, PR, SEO, and social media. Also included are tournaments and, most crucially, bonus policies.
While the old adage “a bookmaker lives and dies by the accuracy of their odds” is true, bonus policies are usually the first thing players look for when choosing a bookie. Pay attention to your bonus policy and also look to competitors to see what they’re doing. Think about how they integrate bonuses and rewards into their platform and do it better.
This step is somewhat related, but not quite to the previous section. Essentially, you need to figure out how (and if) your betting platform fits within the business’s logic and how to stand out from the competition.
So, how do you go about differentiating your sportsbook? Here’s how:
First, we need to define what setting lines actually mean. Without getting into too much detail, oddsmakers set betting lines based on what they believe the outcome of a specific event will be. Betting lines include anything from the spread of how many points a certain team wins or loses by, total points scored in an event, and, last but not least, the chances of a team winning a game.
With the context covered, you can probably see why setting good lines is essential in the day-to-day operation of a bookmaking business.
Generally speaking, you can set the lines yourself or look to other (preferably professional and well-established) bookies for inspiration. If you’re just starting, it’s not a good idea to set them yourself. A wiser approach would be to delegate this task to a third-party service such as OddsMatrix, which provides all the historical data necessary to make this decision.
Traditionally, all bookies have the option of issuing credit to bettors. However, with the legitimization and proliferation of sports betting, this practice has fallen out of favor, as it is viewed as a relic of a time when gambling skirted the line of legality and, not to mention incredibly risky.
Still, if you want to issue credit to bettors, here are some things to consider:
It’s safe to say that data is the lifeblood of every bookmaking business worth its salt. Without data, bookmakers would have no way of determining odds and providing a seamless experience to their customers.
This is where sports data providers come in. Sports data providers collect and analyze sports-related data and sell it to third parties. Anything from player statistics, team win/loss ratios, and historical data are accounted for and aggregated.
Now, to understand which data provider is best for you, you first need to consider the things customers look for in a bookie:
This is the baseline that you should start from. As for you, the bookie, your platform of choice should ideally support some or all of the following needs:
This is where OddsMatrix comes in. OddsMatrix offers real-time odds data for a wide range of sports and betting markets, including traditional sports such as baseball and football and eSports like Counter-Strike. Because we integrate data directly into the platform, accessing accurate and up-to-date odds is as simple as a few clicks for bookmakers. Bookmakers can, amongst other things, set their own odds and adjust them to precision based on market trends.
Here are some of the features our service offers:
Gambling is a highly regulated field – and for good reason. Laws and regulations keep the shadier elements of the underground economy away from gambling and legitimizing the field.
This is arguably the most crucial step, as making sure that your sportsbook is compliant will prevent legal issues down the road.
Some of the regulations that you need to consider are the following:
Another mistake is offering limited integration options. The reason is simple – most users are looking for one-stop shops. In other words, you need to ensure your platform is integrated with as many different providers as possible. If you offer eSports and your offer only includes, say, a couple of games, users will quickly seek out alternatives. The frustration will grow even higher the more you advertise your business as the “ultimate solution,” so if you do that, you have to talk the talk and walk the walk.
There’s a reason why UI/UX design is a thing. Because online platforms are highly complex beasts under the hood, UI/UX abstracts all that complexity and translates into an easy-to-understand and intuitive form.
In other words, if your UX and design are poor, your customers will get frustrated and switch to a better platform sooner rather than later. Some elements you need to pay attention to are the navigation flow, layout, bet slip, typography, and color scheme, amongst others.
No matter how comprehensively we deconstruct and analyze this industry, the basic principle is the same across all betting platforms – bettors put in money in the hopes of making more money than they had wagered. Sometimes, the sums are small; other times, they’re enormous.
But regardless of the numbers, the surefire way to convince bettors to entrust their hard-earned money to you is by setting up incentives. These incentives will convince bettors to spend money on your shop and encourage them to invite their friends and family to join.
These incentives come in the form of “rewards. A fleshed-out reward system shows your customers that you are deeply committed to offering them the best experience possible and appreciate their loyalty and efforts to spread the word about your business.
This can easily be an article of its own, so let’s focus on a few types of reward systems to get you started:
The last few years have seen an explosion in online gambling, with its ubiquity set to only increase in the following years. Still, some bookies have not yet made the transition to in-live betting. In-live betting adds an exciting dimension to gambling, allowing bettors to place wagers on matches as they develop, so make sure to include it in your platform.
With OddsMatrix, starting your bookmaking business is easier than ever. We offer everything up-and-coming bookmakers need, from risk management solutions to scaling-friendly tools to help you take your business to the next level.
