Starting a gambling business is no easy feat. You need to select what platform to use, where to operate and what products to offer to your customer and then, on top of that, ensure that bettors are not only engaged but that they want to come back to your site too. It is much easier said than done.
But with the global gambling industry undergoing tremendous growth and regulatory changes, bookmakers must be more careful than ever to ensure that they not only remain compliant with any legislation, but that they are also ahead of the curve when it comes to their technology.
Inevitably, ticking all the many boxes required to become a fully-fledged bookmaker comes with myriad challenges. So, in a series of articles, BetConstruct takes us ‘back to basics’ as it highlights what to do – and more importantly, what not to do – when setting up a betting company.
Find a partner
The first thing on the list, according to BetConstruct, is selecting your sports betting platform. There are two routes that you can go here: design your own, or partner with a provider.
Designing your own platform can help operators create a more bespoke offering for their customers, however does require a significant investment in both time and expertise.
BetConstruct believes that partnering with a platform provider is somewhat of a “better option” and can help ease the development burden away from the operator.
In a blog post, BetConstruct said: “There are many benefits to purchasing an off-the-shelf sportsbook from a software provider, but this is a huge decision when creating a sports betting product. There is the alternative of customising your sportsbook. You control the sportsbook, changes can be made at any stage, and functionality is not limited.
“Software providers will strive to meet your specifications, but the final product may have snags or elements that do not fit your requirements. Odds provision, payment methods and risk management systems are all critical when you select a software provider to give you a ready-made solution.
“You must recruit a company that can respond to requests promptly. There are now several experienced and trusted sportsbook software providers. There could be less expensive gaming software stables, but you risk dealing with a company that does not have the most experience.
“Each software provider will have a portfolio of clients, which can be a good indicator of the quality of their service. Companies that have helped the major UK brands will probably have the expertise to develop sports betting solutions with smaller, independent sports betting businesses. Your provider should be carefully selected to meet your and your customers’ needs.”
Identify your target market
Next on the list, and a point which is arguably the most important, is identifying which markets you want to operate in and obtaining a licence.
The tricky thing with sports betting at the moment is that every market is in a different stage in its regulatory journey. You have more mature jurisdictions such as Italy and the UK, but then emerging markets such as Canada, South Africa and the US – all of which have different requirements.
There are also costs and benefits related to each region of operation, including the financial outlay of acquiring a licence in the first place.
When it comes to markets such as the UK, there are significant fees associated with acquiring the necessary certifications. One other such challenge is that even after receiving a licence, sportsbook operators will be competing in a market dominated by the major brands that can afford to invest in compliance, set and monitored by the UKGC.
Whilst the costs can often appear to be eye-watering, gambling operators cannot afford to cut corners when it comes to compliance.
BetConstruct added: “The legal infrastructure of a sportsbook is one of the major challenges when you create a sportsbook and betting business. This part of the process can be the most expensive, but the UK market is advanced, so many companies can provide legal services for sports betting businesses.
“The UKGC is one of the most experienced regulatory bodies in the industry. However, if you decide to operate elsewhere, you will deal with other licensing bodies, including the Malta Gaming Authority and Gibraltar Gambling Commissioner. The importance of researching the specific gambling laws in each country cannot be underestimated.
“The Gambling Commission can revoke licences and impose fines. A sportsbook that tries to cut corners with legalities could make mistakes. However, ignorance is not a valid reason for breaking the sports betting laws that apply to sportsbooks with a UK gambling licence.
“The UKGC monitors how licensed operators comply with standards for safety and fairness. There are many compliance issues regarding free bets and promotions. There are clear standards associated with the advertising of betting companies. They have to be taken on board when applying for a licence, running a sportsbook and using sportsbook software.”
Within its blog post, BetConstruct highlighted a range of other core components that you must consider when setting up a gambling business – spanning marketing, payments, affiliation, website design, engagement and retention.
To avoid any pitfalls and challenges, you can read about how to become a bookie in the full blog