The global online betting market where people wager on the future outcome of a game or event - the iGaming market - is predicted to reach $100 billion by 2024, according to WorldMetrics 2024 report. The report estimates that more than 5 million people across the globe use iGaming solutions daily.
It is no wonder so many entrepreneurs daily decide to set up new iGaming businesses inspired by success stories of such prominent iGaming tycoons as Mark Scheinberg (co-founder of the online poker giant PokerStars), Denise Coates (the founder of global iGaming brand Bet365), Robin Reed (founder of LiveSpin where players can join the action by watching live slots streamers) and others.
However, many newcomers to the iGaming industry learn the hard way that the road to success and fame is replete with decisions that can make or break the business. It is an accepted rule of thumb that 85% of iGaming start-ups will fail in the first two years.
Let us look at the six common issues businesses highlight as critical for the success of iGaming endeavors.
Not Researching the Market Thoroughly
Every business textbook states that developing a valid business plan significantly enhances the chances of success for business startups. Researching the market is essential for obtaining a clear understanding of who will be your business competitors and how you will succeed in gaining customers which then can be laid out in detail in your business plan.
It is rare that a business startup faces no competition. When such a situation happens, it means you have opened a totally new market niche.
It is much more common when a business is up against tens, if not hundreds, of other operators all competing for a piece of the market. To succeed in a competitive environment, you must learn what the top performers in your market offer that makes them so appealing.
Closely related to competitive strategies you can employ for your business success is the choice of your target audiences. You should learn about your target audiences betting interests, including things like:
- - What are their preferred games to play?
- - Why do they enjoy them?
- - What sports do they like to follow and wager on?
Identifying popular content and playing preferences will guide you in choosing winning strategies for entering the market.
You have to understand what advantage your business can use to attract customers. For an obvious example, maybe you know an effective strategy of using media assets to attract and grow a customer base.
It is a well-established fact that margins in the iGaming industry are thin while customer acquisition costs are high. Taking this factor into account, your market research should state how your unique product or service will generate more cash from each customer. Your market research should also accurately estimate your customer acquisition costs. At the same time, your plan must identify why you will be able to attract and retain customers for a lower cost than the competition.
All this will help you ensure that your cost to acquire and retain a player is less than the revenue they generate - so that you are not losing money.
Not Choosing a Suitable Provider
You will need coverage of sporting and gaming events to operate an iGaming business. So, after your market research gives you necessary information about the specific market you want to enter, you must secure a comprehensive coverage of gaming events for your startup. Such coverage can be obtained by sourcing it on your own or from providers who offer it as part of their iGaming solutions.
Identifying content providers and negotiating with them on your own will let you obtain a content coverage fully tailored to your specific requirements. However, it is a resource-consuming option as it will take time as well as money to identify them and sign a contract.
The alternative is taking advantage of bundled coverage that platform providers offer as part of a Turnkey or White label solution. This is an optimal option for market newcomers as they will be gaining a proven solution with all-you-need in one place.
Choosing a suitable iGaming platform provider is critical as you will be selecting not just software and a platform to operate from but also a partner who must be willing to share his expert knowledge and guide you.
Not Having a Clear Marketing Strategy
You will need to determine what strategies you will be using to promote your new online gaming business and grow your customer base. The main goal should be to position your brand as a trustworthy business that can both attract new bettors and keep them loyal and engaged so that they regularly bet with you.
Devising effective affiliate networks is one strategy that will facilitate customer attraction. Affiliate programs enhance customer attraction by expanding engagement and traffic to a regional or worldwide audience via various commission-based options.
Relying on predictive analytics to improve the customer experience is another strategy. Data produced by digital marketing efforts and the feedback to promotions (clicks, downloads, customer value) can help offer right betting opportunities to a customer.
Using various Bonuses is another popular strategy for earning recurring business. Businesses employ a wide variety of Bonuses: welcome bonuses; for 1st deposits; cash-back system, and Loyalty programs. All of them can be fine-tuned to fit your marketing strategy by applying several selection parameters for enhanced targeting.
Not Choosing a Reliable Payment Provider
Ensuring that your online business offers several popular payment options for customers enhances your revenue potential as well as convenience for customer experience. To be more accessible and player-convenient, you should provide all global and local methods that are popular in your region.
At the same time, it is essential that payment systems operate without a glitch. Mistakes in payments processing erode customer trust that has been acquired at high cost. Such mistakes take valuable resources to correct and most often result in a lost business opportunity. It is therefore critical that you look for a reputable supplier that offers a large variety of payment methods. This is an absolute requirement for an online gambling business.
Not Providing an Efficient Customer Support
No services industry business can be truly successful without efficient customer support. Customer support correlates to revenue: businesses with effective customer support maintain smoother operations and consequently increase their revenue. Dedicated customer support should respond to customer inquiries on time and ensure everything is in order for customers.
Your business will need customer support that communicates efficiently via email, phone, or live chats. It is a viable option to let the iGaming solutions provider handle the customer support if you have limited knowledge and support as a newcomer to the business.
Operating without iGaming License
Applying for an online gambling license can be a bureaucratically complicated, time-consuming and costly procedure. You may be tempted to operate for a while without a required iGaming license. That is not a good idea.
Besides maintaining legal compliance, obtaining a license from a recognized legal authority will assist gambling businesses in enticing players: a license from the appropriate authorities coveys an assurance of fairness of the gaming process as well as security of financial transactions.
Learn about Gaming License Types and Features
In Conclusion
The issues discussed above are the factors most frequently mentioned by businesses as critical for their success, listed in the order of importance. The list is by no means definitive and issues could be covered in more details. The purpose of the article is to alert you to the importance of these matters in guiding your preparation for launching an iGaming business.
By avoiding the biggest mistakes discussed, you can significantly enhance your chances of establishing a successful iGaming business in this competitive industry.
