According to the Zion Market Research report, over the next five years, the world market for sports betting expects a steady growth of 9% per year, with much of the growth being achieved "thanks to the digital revolution that changes the world every second." Therefore, if you plan to create a sports betting site, now is the time. Our article will tell you how to do it correctly and legally.
What you need to run a sports betting site:
- Choose a niche for betting (football, basketball, horse riding, eSports, etc.).
- Choose an approach to development (from scratch, get licensed software, become a licensee).
- Obtain a bookmaker's license for the target jurisdiction.
- Select a payment service provider.
- Develop the design and functions of the site.
- Select a betting system.
What niche, sport choose
Major online brokers such as betway.com, 888sport.com and bet365.com serve bets on virtually all sports. And the first time you can hardly compete with them, unless you are ready to invest a lot of money in a marketing campaign. If the budget is limited, it is better to bet on a specific category or specific sport.
At bet365.com you can bet on all popular sports. Source of the image
Targeting a small niche will create a better user experience and make the site more recognizable. In practice, this means that you need:- Develop a site design and interface for a specific niche.
- Develop unique game offers specific to the chosen sport. For example, if this is football, we need bets on the first out, breaking the rules, hitting the plane of the opponent's goal, on the number of yellow cards, etc. If this is Dot 2 (video game), you need bets on the time of the first blood, the number of ultra-kills in a match, etc.
- Develop a marketing strategy for a specific niche. Due to a narrower target audience, you will be able to more effectively target an advertising campaign and increase the loyalty of players.
You need to choose a niche based on which region you are planning to work in. The simplest example is that in Europe, soccer is popular and practically does not play American football, and vice versa, American football is popular in the United States and there is almost no interest in soccer. The popularity of bets on certain sports in the country can be found, for example, using Google Trends.
The popularity of requests for bets on popular sports in the US
Using Google Trends is simple: enter keywords (“sport name” + “bets”), choose a region and a tracked period. Keywords must be entered in the local language (or languages). Tracked period must be more than a year. And the region must be chosen with a payable population.
What approach for the development to choose
Creating software for the gambling business is not a typical development, since standardization, licensing and credibility of software developers play an important role here. That is, players must be sure that their money will not be stolen, the probability of winning will not be "tied up" and developers will provide the proper level of protection against hacking and / or unauthorized interference.
That is why we recommend using development services from well-known development companies on the market. In the case of online sports betting, custom development allows you to implement additional functions. It is also useful in terms of marketing.
Three development approaches:
Completely customized solution. The cost of this option can be found on the example of Bet365. The site is registered in Gibraltar, so the registration was paid 30 thousand dollars, 100 thousand dollars a year is spent on taxes (the site has many licenses, and not just for sports betting). Website development cost 80−100 thousand dollars (+ the same amount per mobile application). Several million dollars was spent on promotion.
Thus, the development of a site like Bet365 will cost from 300 thousand to 3 million dollars. Focusing on a small niche will reduce marketing costs, but this will have almost no impact on the cost of developing a website. As an advantage of this way, it is worth noting that you will fully control the process and will be the owner of the program code.
Using White Label. Their price ranges from 10 to 350 thousand dollars. The cost of expensive options includes the site itself (a template with a limited ability to customize the design and functionality), application, payment processing and promotion. So you will only develop a design and general guidance. In return, you will have to pay a certain percentage of gross income or profit. In general, this is the best option to run your site if you have a limited budget.
Become a Licensee Licensee. The most budgetary approach to meet the amount of from 5 to 60 thousand dollars. Speaking in essence, you will work under someone else’s license as an agent to attract customers in exchange for a certain commission on their expenses. That is, you will be engaged in marketing and traffic to another site.
No matter which path you choose, make sure the software meets the following requirements:
- secure multi-currency currency gateways;
- there is customer support and customer relationship management system (CRM);
- you understand how the betting system works; large coverage of various types of rates;
- software licensed.
In which country to get a license
Building a sports-based business on the Internet is not an easy task, requiring a lot of money and a corresponding license. Such a license can be obtained not everywhere, since in some countries such a business is prohibited, while there are countries where not only entrepreneurs are punished for online betting, but also players. These are mainly countries of the Middle East and Asia. In Europe, bets are completely banned only in Poland.
The ratio of countries to online sports betting
Learn about the relationship of a particular country to online betting on the «Simon’s Guide to Online Gambling Legal Status and Laws» page. It is periodically updated, and there is an interactive map. In the US, attitudes towards online betting are determined by individual state laws. To find out about current legislation and the latest news on this issue, please visit gamblingcompliance.com. An interactive map is also present.
Attitude of individual states to online sports betting in the USA.
As a provider of gambling services, your company must apply for a license in the selected jurisdiction. Consideration of the issue by public authorities will take from several months to a year (depending on the country).
When choosing jurisdiction, consider the following:
- state reputation (attitude to rates, corruption, stability of the regime);
- licensing requirements for legal entities and authorized capital;
- the cost and duration of the procedure for obtaining a license;
- taxes and other fiscal charges.
Most online gambling companies choose the following jurisdictions:
- Curacao. There are no divisions into types of bookmakers, casinos and game slots. All of them receive one type of license. There are no strict requirements for applicants, which simplifies and speeds up the process. The tax rate is 2%, which is lower than in other countries. In general, this is a great option, as the authorities of Curacao seek to issue permits as quickly as possible, in order to increase tax revenues.
- Costa Rica. A stable country, which is happy to hand out licenses to conduct a betting business, but with two conditions: first, local residents should not use its services, which is achieved by blocking all IP addresses of the country; the second is the physical presence of your company in the country. The cost of the license is 12 thousand dollars a year. There are no tax liabilities or exchange controls.
- Isle of Man. Registration of all types of gambling entertainment is possible. The cost of the license depends on the structure of the company and the type of the form, the minimum is 50 thousand dollars. If the company's revenue is less than $ 20 million, tax deductions are 1.5%.
How to choose a payment service provider
To start a betting business, you must enter into an agreement with several payment system providers so that players can easily and quickly deposit and withdraw money from your platform. For convenience, it is recommended to provide users with as many payment options as possible. At the same time, it is necessary to make a bet on payment services that understand the conditions of specific regions and adapt their services to these conditions. In the table you will find a comparison of the three most popular payment systems.
What features should the site have
User panel features:- Login. The ability to register and authorize in several ways: login and password, email and password, integration with accounts in social networks.
- Choosing a bet. Simple and quick selection of the sport, team, player, events, which you can bet on at the moment. A set of such things should differ depending on the sport. It is important to realize the ability to bet on the result of a specific player, and not just the team as a whole.
- Broadcasting game / matches. The ability to watch the match in real time on the site or through the application site. Increases user experience and allows you to use more business models for earnings.
- Bid Help. A simple guide with illustrative examples (screenshots + video), how to bet and how to enter and withdraw money. Also, a tooltip system should be developed to assist the user in working with the interface for the first time.
- Team / Player Information. Users should be able to find out information about each team and individual players in the chosen sport. It must be concise information about the results, achievements, weaknesses and strengths.
- Match schedule. A calendar of future events will help users plan their activity at rates. The schedule must be contextual: if the user selects football bets, then the football matches schedule must be next.
- Choice of bet type. The set should depend on the specific sport and user requests.
- Communication with other participants. Players should be able to communicate in real time to discuss bets, events, predictions, and more. It can be implemented in the form of chat, forums and groups in social networks.
- Bid Results. The amount of winning or losing on all the bets made, plus the history of bets on sports and types of bets.
- Payment system. The ability in one or two clicks to enter or withdraw money from the system. Payment gateways must be integrated with the site and mobile application.
- Multi-language support. The more of them, the greater the reach of the audience.
- Match Summary. Detailed match statistics for the team as whole and individual players. It will give users the opportunity to analyze the effectiveness of each player and make a forecast based on it for the next games.
- Login. You need several administrator roles - for the owner and hired employees. The latter should be limited in rights, which should be enough to maintain and moderate the site, but not enough to steal money, delete or change important settings and the like.
- User Management. The ability to monitor and manage user accounts through a dashboard that gives access to all user data: profile data, rate type, amounts, results, etc.
- Input data from bookmakers. Information about the status of matches, teams, players and bets on them. Usually bookmakers combine betting data to give more accurate data regarding the stakes and winnings.
- Management of winnings and payments. Monitoring and control of the size of winnings in manual mode is needed to detect fraud, detect failures and resolve controversial situations.
What rate system to choose
The calculation of the probability of winning and the amount of winnings is a key element of the betting site. The site should explain how rate ratios work and how they relate to probability and win amount.- So, in a sports match, where one side was given 25% to win, the odds are calculated by the algorithm: one whole and N-tenths, where N = 100% / 25%. In case of winning the team with a 25% chance of winning, the amount of winnings on the bets placed on it is calculated according to the following scheme: rate * coefficient. For example, if the bet is $ 100 and the coefficient is 1.4, then in case of a win the user will receive $ 40 (100 * 1.4). This is the European system.
- In the Hong Kong system, the algorithm is similar, but not 1.4, but 0.4 is indicated. The probability and size of the gain from this does not change. In case of winning, the user will receive the same 40% of the bet (+ the amount of the bet). The British system uses fractional odds, for example, 5/10. The right indicates how many units you need to put, the left indicates how many units the user will win. So, if the coefficient is 5/10, then by betting $ 100, the user has a chance to win $ 80 ($ 100/10 number to the right) * 5 (the number to the left)).
- In the American system, rates like “+150 and -250” are used. The number on the right indicates how much to put, on the left - the amount of the winnings. For example, in our example, you need to put $ 250 to win $ 150.
- In the Indonesian system, the algorithm is similar to the algorithm in the US, only decimal fractions are used instead of integers, for example, +1.5 and -2.5.
- The Malaysian system also uses numbers with +/-, but first indicate the amount of the bet, and then the amount of the gain, for example, -45 and +100 (you need to put $ 45 to win $ 100).
Projected income
According to our data, betting is entertainment for most users. This makes watching the competition more interesting. About 25% of all players place bets with friends, therefore sports betting sites can actively grow by attracting friends through an affiliate program. Typically, sports betting sites earn between 2% and 4%. The lower the percentage of earnings and the more interesting the software interface, the more users will use the platform your platform. According to the study, the average bet in Europe is between $50 and $70.Given these figures, with 1,000 active users daily, you can receive from $1,000 per day:
1,000 users * $50 * 2% = $1,000 / day
or
1,000 users * $70 * 4% = $2,800 / day
So if you run an aggressive marketing campaign, you can make over $30,000 a month.
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