Entrepreneurs all over the world follow closely the continuing growth of the global online betting market and many are starting their own online betting businesses to take advantage of the profit opportunities. Revenue for the online gaming market just in the US is projected to grow at a 12.9% annual rate, from $19.1 billion in 2023 to $31.1 billion by 2027, according to research firm Statista.
Successfully launching an online betting business requires a clear plan and the acquisition or development of key building blocks, including the sportsbook platform. At the same time, the online gambling industry must be studied and analyzed to identify the marketing strategies your business will use to launch and manage the site.
While the sequence of steps can be adjusted to suit individual business needs, let’s outline the main steps required to start an online betting business.
Step 1. Developing a Business Plan
A comprehensive business plan serves as a guide for the steps necessary to launch and operate your online betting business, including projections of financial outlays and expected revenues. Creating a business plan helps prepare for the business launch.
Additionally, licensing applications often require the submission of a corresponding business plan. And besides licensing requirements, a business plan can also be used to acquire partners and financing for launching your business.
There are many online resources that explain how to develop a business plan, with many of them providing templates that can be adapted to meet your business needs.
Development of a business plan entails conducting two main activities: market analysis and budgeting.
Market analysis is the first step in preparing for a business launch. It helps identify the target audience and the competition you will face in the online betting industry. A market analysis reveals what products and services competitors offer and how they promote them.
Key components of market analysis include:
- Identifying target demographics and customer preferences.
- Analyzing competitor offerings and strategies.
- Evaluating the strengths and weaknesses of competitors.
This study helps you determine where you can compete successfully based on your strengths and weaknesses, allowing you to choose the most effective marketing and promotional strategies for your business.
Budgeting for your online betting business involves assessing:
- Initial costs for launching your business,
- Recurring expenses your business will have during operations, and
- Revenues your business will make from the services you offer.
Developing a budget helps identify financial, personnel and other resource requirements for launching and running your online betting business, as well as the return on your investments based on your goals and capabilities.
Step 2: Registering a Sports Betting Company
Your sports betting company will need a gambling license from regulatory authorities in the jurisdictions where you plan to operate. Therefore, to obtain a license, you must first register your company since the gambling licenses are issued to registered organizations.
The procedure for registering a company varies from country to country, but is generally straightforward and can be researched easily. Additionally, there are many law firms offering assistance with registering companies in their respective countries.
Step 3. Obtaining Gambling License
Receiving an online betting license is essential to ensure your business operates legally and gains the trust of potential customers.
Different countries and regions have their own regulations and licensing authorities. Common jurisdictions include:
- - Malta
- - Curacao
- - Gibraltar
- - The UK
Once you have chosen your jurisdiction, you will need to:
- Prepare the required documentation.
- Submit the application by filling out the specified form and attaching the necessary documentation, which might also include an application fee.
The documentation requirements vary by jurisdiction but generally include:
- - Proof of financial stability, such as recent bank statements, to demonstrate you have adequate capital.
- - Criminal background checks.
- - Software fairness certificates.
- - A comprehensive business plan.
- - Risk management procedures.
- - Responsible gaming policies.
Once the regulatory body approves your application, you'll need to pay the licensing fee. The cost varies based on the jurisdiction.
The application process can take up to 18 months. Malta is a popular choice due to its reasonable fees and requirements as well as relatively short consideration period – 12 to 16 weeks.
Step.4 Selecting a Sports Betting Software
The sports betting platform consists of a set of software applications that manage betting operations, including placing bets, maintaining user accounts, displaying betting odds, and processing payouts. It is the centerpiece of an online betting business, and choosing the right sportsbook platform significantly impacts your website'sfunctionality and user experience.
As an operator of an online betting business, you have the option to either develop a proprietary betting platform in-house from scratch or purchase one offered by third-party providers - known as off-the-shelf platforms.
- - Develop a proprietary betting platform in-house from scratch, or
- - Purchase an off-the-shelf platform offered by third-party providers.
In-house platform development is a viable option if you have the required programming skills and knowledge of the gambling industry. However, developing a proprietary platform demands significant investment in resources and can be time-consuming.
Off-the-shelf betting platforms are ready-made solutions provided by third-party software providers, which can be customized to meetclients' specific needs. These platforms are typically classified into two main categories:
White Label Sportsbook Solutions
White label sportsbook solutions come with a pre-existing gambling license that the operator can use. They typically operate on a revenue share model, which can impact long-term expenses as the business scales.
Higher long-term expenses are partially offset by lower initial purchase costs - white label platforms usually range from tens of thousands of dollars. They also come with a pre-set array of games and payment systems. An additional advantage is a speedy launch due to the solution’s ready-to-use nature and pre-existing license.
Turnkey Sportsbook Solutions
Turnkey sportsbook solutions require operators to obtain their own gambling licenses. These platforms may involve ongoing payments for technical support, updates, and license renewals.
However, turnkey solutions offer higher customization as they are built to the client's specific requirements. Additionally, the operator retains full ownership and control, unlike white label solutions where control is partial. Turnkey platforms typically cost hundreds of thousands of dollars.
Want to understand the benefits of turnkey solutions? Read our Comprehensive Guide on the Advantages of Turnkey Sports Betting Solutions for more details.
Step 5: Ensuring Maximum Bettor Attraction and Retention
Ensuring maximum bettor attraction and retention (regardless of which platform option you choose) requires incorporating essential features, such as:
User-friendly Interface
A user-friendly interface simplifies navigation, making it easy for users to browse different sections, place bets, and manage their accounts through an intuitive design.
Secure Payment Processing
Secure payment processing is crucial and should include multiple payment options like credit/debit cards, e-wallets, and cryptocurrencies. Payment gateways such as PayPal, Payoneer, and Skrill ensure global accessibility and convenience.
Robust Security Measures
Robust security measures are essential for safeguarding financial transaction data and user privacy. These measures include:
- SSL/TLS Encryption: Cryptographic protocols used to establish secure connections, available from providers like Cloudflare and Let’s Encrypt.
- Multi-Factor Authentication (MFA): MFA requires users to verify their identity using two or more factors (2FA or 3FA authentication) through apps such as Salesforce Authenticator or Google Authenticator.
Marketing and Promotion
Marketing and promotion are key to driving traffic and sustaining growth for any online betting business. This can be implemented through:
- Affiliate Marketing: Facilitated via iGaming affiliate software, allowing affiliates to promote your betting platform through social media, influencer partnerships, reviews, and videos.
- Search Engine Optimization (SEO): Optimizing your platform for search engines to attract organic traffic.
- Referral Programs: Incentivize existing users to refer new customers.
- Tiered Loyalty Programs: Reward long-term users by offering greater rewards for higher betting volumes.
Risk Management Tools
Tools that help identify and mitigate potential risks to ensure the safety and integrity of operations.
Business Management Tools
Comprehensive tools that aid in managing various aspects of your betting business efficiently.
Customer Support Services
24/7 support services to assist users with inquiries, troubleshooting, and issues, fostering a positive user experience.
Launching the online betting business is done once necessary licenses are secured and the site is ready.
Conclusion
Starting an online betting business is easy thanks to ready-made solutions like iGpixel turnkey sportsbook solutions. They help operators save time and resources by outsourcing the website development process, allowing them to focus on marketing and license acquisition.
iGpixel turnkey sportsbook solutions include online betting and gaming website design, branding, and Affiliate Software with automated links generation that supports all commission plans.
