How to Start a Sportsbook : Step-by-Step Guide 2024

Welcome to the thrilling world of sports betting! As sports enthusiasts, none of us are unaware of the thrill sports betting comes with. The adrenaline rush during the victory, aggression while cheering for the favorite team, constant watch on the game, and breathtaking game progression are clear representations of how much sports and events consume us. 

Now comes an exciting part, what if we tell you that you can convert your passion into a profitable venture. Curious how? Keep on reading!

Start your sportsbook! It is not just a business opportunity, but your chance to immerse yourself in the dynamic and ever-evolving landscape of sports betting. Whether you’re a sports enthusiast, a seasoned player, or a businessman, this business venture of an online sportsbook is your road to skyrocketing success. 

In this comprehensive all-in-one guide, we’ll walk you through all the details you will need to start your sportsbook from scratch. From understanding the intricacies of sports betting sites to common terms, and rapidly growing market stats, we have got it all covered for you. 

But before we jump into understanding the steps for HOW TO START A SPORTSBOOK, let’s explore some aspects closely related to online sportsbook business. Buckle up because we’re about to embark on a journey that promises excitement, challenges, and endless opportunities. Let’s get started!

What is a Sportsbook?

An online sportsbook platform is software that allows betters to bet their money on their favorite sports event. These bets can be made on markets like overall win or loss, scores, players, and so much more. 

Typically, a sportsbook owner makes revenue from the difference of total losses towards the total of wins, or by commissions already set in the system, aka vig or vigorish. 

Ever since the United States of America lifted the ban on betting in 2018, there has been a sudden rise in businessmen and enthusiasts willing to be a part of this thrilling industry. Revenues have skyrocketed in the past 5 years and will show exponential growth in the upcoming decade, considering the history of growth and excitement amongst populations. 

Now that we have a fair idea of what is a sportsbook and some insights into its growing adoption, let’s further read about what is a bookmaker and its being. 

Read Also: Top Whitelabel Betting Exchange Providers to Watch in 2024

What is a Bookmaker?

In iGaming software, a bookmaker is referred to as a crucial element of the iGaming platform. It is a digital counterpart/replacement of the traditional bookmakers in the betting industry. A bookmaker in the iGaming industry serves various essential functions, such as: 

1. Setting odds: Very similar to traditional bookmaking, the online bookmaker is responsible for proactively setting odds for various betting markets offered in the event. It involves carefully analyzing the team or players’ statistics, performance history, and other relevant data to determine the possible outcomes. 
2. Accepting and Managing Bets: Another key role of a bookmaker in an online sportsbook is to allow players to place bets. It allows users to scroll through available betting options and choose their desired selection and wager online. 
3. Risk Management: Online bookmakers must ensure profitability. Risk management includes monitoring usual betting patterns, adjusting odds on the platform, and proactively implementing risk management strategies to mitigate potential losses.
4. Payout Management: When players win, the iGaming bookmaker automatically calculates and processes payouts to the bet winners. This process is automatically conducted in the online sportsbook platform with the help of a bookmaker to ensure a swift and smooth payout mechanism.
5. User Experience: A user-friendly UX is crucial for online bookmakers to retain players. Bookmakers’ key components in online sportsbook platforms are live betting, real-time odds updates, and personalized suggestions to enhance their overall experience on the platform. 

Overall, a bookmaker plays a fundamental role in the iGaming software to provide users with a platform to engage in sports betting online. It combines traditional betting principles with modern iGaming technology to create an immersive experience for the players. 

Next in line are the common sports betting terms that will enhance your domain vocabulary before you jump into creating an online sportsbook. 

Read Also: How To Create Your Own Sports Betting Platform?

Sports Betting Terms You Should Know

Before starting a sports betting business online, a basic understanding of fundamental terms related to the business is important. So let’s dig in and come out more informed about common terminologies related to sports betting before making the website. 

Action

Used for placing bets on the event/sport

Punter

A player/bettor, a person who places the bets

Odds

Feeds or betting lines produced by the sportsbook

Live Betting

Betting in real time on sports is called live betting

Wager

A bet placed on any expected outcome is called a wager

Exotic

Bets that are complex and challenging are called exotic

Dime

A bet that is worth $1000 is called a dime

Buck

A $100 bet is called a buck

Bookmaker

An organization or entity that accepts bets is called a bookmaker

Ticket

A ticket is a confirmation of a bet being placed

Limit

The maximum amount of bets a player can place 

Stake

Amount of money that is placed a bet on a specific outcome of the event

Nickle

A $500 bet is called Nickle

Sharp

Players who are professionals are called Sharp

Underdog

Part of the bet that is a high probability of losing

Future

A bet on champions or long-term winners is called a future

Understanding the Market of Sports Betting

In 2021, the global sports betting market was valued at USD 70.23 Billion. It is expected to grow at a CAGR of 11.7% during the next decade. The key influencing factors in the growth rate are the increase in penetration of connected smartphones, changing digital dynamics, and the rise in craze of online betting amongst the younger generation. 

The key driver helping online sports betting navigate is the growing digital infrastructure. With a rapid growth in the usage of smartphones and devices, it has changed the overall consumer behavior including online betting. In the world today, there are around 6.3 billion smartphone users, and this is growing every year. In addition to this, the demand for sports betting, online or offline, is also increasing with the increase in the number of events happening per year. 

Games like cricket, basketball, football, baseball, boxing, and motor racing are attracting the most bets. Non-athletic events such as horse racing and eSports are no less in attracting sports wagering. As the reports of Statista confirm, the global sports betting market is growing at $218 billion year on year. The interesting fact to be looked at is that most wagering is done online in the current scenario. This is why sports betting has seen a 206% growth rate in bets between 2019 and 2021. 

Furthermore, the sports betting market is also exploding with increasing investment in online platforms. According to DataReportal’s Global Social Media Overview April 2021, there are more than 4.8 billion internet users worldwide. Online platforms allow participants to keep track of their wagering actions in real time via internet-connected devices.

Why is THIS the Right Time to Start Running a Sportsbook?

Sports betting has become one of the most popular forms of gambling, recently across the globe. The industry has grown leaps and bounds over the last decade as the Statista reports suggest. This means a lot of new opportunities are waiting for sportsbooks to make profits from this industry. 

Here are some of the reasons that will explain exactly why this is the right time to kickstart your sportsbook software now: 

New Growth Spectrum

The legalization of sports betting in the US and across is creating new opportunities for those seeking more business opportunities. As more and more countries legalize sports betting, the number of participation from sports enthusiasts will also see a spike, increasing cash flow in the industry. 

More Revenue 

Online betting has eradicated the concept of geographies and boundaries. This means that bookmakers can accept bets from around the globe, irrespective of the hour. Thereby, adding more revenue streams and more player base. Also now that many countries have legalized betting, there are fewer restrictions on how much money players can bet. 

Increased Customer Base

With every country legalizing sports betting, the number of players is also increasing. The players who were unable to place bets due to restrictions can now easily come to your website and place bets freely in their currency. With fewer restrictions, more players are playing online and placing bets on their favorite events. 

Lesser Cost of Operation

With so many options in the market to proceed with, operations costs have significantly come down. Ready-to-launch aka White Label sportsbook platforms have subsequently reduced cost and time to market for sportsbook operators. They also come in handy when you want to integrate sportsbooks into your pre-existing online casino softwares as an extension. 

How Much Money Do You Need to Start a Legal Sportsbook?

The amount of money you need to launch a sportsbook can significantly vary depending upon a variety of factors such as size, and licensing fees. Tech infrastructure, marketing costs, and other legal costs are also additionally considered. Listed below are some of the major costs involved: 

Licensing and Legal Fees: licensing can be one of the most consuming expenses if you’re in a jurisdiction with strict betting laws. Fees like Licensing, attorney, and compliance costs can overlap.

Technology and Software: some investment in robust sports betting systems will involve higher upfront costs or regular subscription fees. This includes odds management software, payment gateway fees, CRM (Customer Relationship Manager) tools, and more. 

Variable Expenses: salaries, overhead costs (if any), utilities, and other everyday expenses are some of the common day-to-day expenses for your business. 

Advertising and Marketing Costs: branding and customer acquisition are the most complex elements for any business and sports betting is no exemption. Businesses have to set aside and assign budgets for online advertising, sponsorships, affiliate marketing, paid promotions, offers, discounts and bonuses to attract and retain the player base.

Capital Reserve: initial capital reserve is mandatory for a business to sustain in the initial run. You will need sufficient capital to cover the winning fee, especially in the early stages when the sportsbook may not generate significant revenue.

The total amount of money needed can vary greatly, but it’s not uncommon for startups to need hundreds of thousands to millions of dollars for an initial investment

Is it Legal to Start a Sportsbook?

Talking about whether it is legal or not to start a sportsbook depends greatly on which jurisdiction or geography you’re planning to operate. Laws related to sports betting vary significantly from country to country. Listed below are some of the key considerations to keep in mind. 

• Licensing and Regulation: many governmental bodies require sportsbook businesses to acquire a license before starting an online sportsbook platform. These authorities are responsible for enforcing laws and regulations on sports betting to ensure fair play, consumer protection, and compliance with anti-money laundering measures. Operating without these necessary licenses can result in several penalties.
  
• Regional Laws: it is important to keep in consideration the local laws set by regional jurisdictions. Some regions might have a full ban on betting, whereas others can allow you to operate under certain specific conditions. 
• Online vs. Land-based: Regulations may significantly differ for online sports betting platforms in comparison to brick-and-mortar establishments. Some jurisdictions may allow online sports betting but restrict or prohibit land-based or physical sportsbooks.
• Taxation Policy: understanding taxation is critical for online sportsbooks. Taxation can vary from government to government on gambling revenue. 

In a nutshell, while it is possible to start an online sportsbook platform in many jurisdictions, it requires research, obtaining licenses, compliance with regulations, and attaining permits. An unlawful operation can lead to severe consequences, including legal penalties, fines, and even a complete shutdown of your online sportsbook app. 

Read Also: Exploring the Latest Trends in White label Sportsbook Development

How to Start a Sportsbook in 5 Easy Steps?

Understanding how to correctly create an online sportsbook platform is the first step towards your journey of online sportsbook business. Having set up the platform to the T will be the cornerstone for your business. Therefore, you need to take it seriously and be conscious from the very beginning. 

It is recommended to consult experts or an expert provider of iGaming software solutions for in-depth guidance about the process. Our team of experts, with years of experience in the iGaming industry, will help you understand the intricacies of the field.

Meanwhile, we have listed down 5 crucial steps that you will need to follow to build your online sportsbook software without any glitches. Keep on reading.

Step 1: List Your Expectations and Business Requirements

The very first step for a business owner, while starting a new project, is to pen down their expectations and requirements from the project. Make a note of what you want to achieve with this project, your time to market, and the tentative budget you want to invest. This will formulate your idea into reality. 

Consulting your online sportsbook provider, at this stage, is a great idea. Professional experience can guide you better with realistic insights on intricacies, requirements, trends, and what your sportsbook needs in terms of market, consumer behavior, payment patterns, and so on. 

On a side note, if you are a newcomer in the field of gambling, this initial preparation will take up most of your time

If you lack experience running a gambling service, this initial step may take up a significant portion of your time for preparation. Still, it is critical to have a comprehensive visualization of how to operate such a platform and every aspect that goes into competitive performance as well.

Step 2: Market Analysis Step

To better understand the software development needs it’s crucial to conduct market research. This involves studying competitors to identify their features without copying them. Instead, it helps in gaining insights to establish edges.

The goal is to understand their business strategies to surpass them. Examining their sportsbook designs also provides insights into color combinations and layouts that appeal to bettors. Furthermore, assessing software functionality before launching a sportsbook ensures a customized offering for clients.

A key part of this analysis involves user research. To attract and retain users it’s important to have a picture of the target audience. Many companies start by creating user personas that help in evaluating their challenges, requirements, and service preferences.

Step 3: Sportsbook Design Phase

Once you have defined requirements and completed market studies, you can begin developing your platform. Typically the development process starts with design work focusing on two aspects; UI (User Interface) and UX (User Experience) design.

During the UI phase, a team of designers produces wireframes and mockups that provide previews of the product. These visual representations showcase layouts and content arrangements that aid in making decisions on branding elements and color choices.

The primary consideration when designing your sportsbook should be user-friendliness.

The next stage of UX design focuses on creating an experience centered around the user emphasizing on clean design and smooth operational flow. This phase plays a role in enhancing user satisfaction while interacting with your platform.

 Step 4: Development Process Initiation

Once the design stage is accomplished, you can go ahead with the development of sports betting software. During this phase, developers take a final design and put it on the platform while making necessary software components such as main features, database integrations, and server-side operations.

In the process of development, deliberation on payment methods for users is crucial. It is already common practice to offer more options like cryptocurrencies (Bitcoin, Ethereum). Furthermore, one must carefully select the sporting activities to cover and types of sports that would be in line with user tastes and desires.

Step 5: Platform Testing & Launch

After creating the sportsbook, keen testing sprints are necessary to ensure a defect-free code and an appropriate functioning. Quality Assurance experts perform many different types of tests – unit testing, integration tests, or end-to-end testing – to identify any faults or vulnerabilities.

Final Word

Diverse demands can be satisfied by many high-quality solutions that have extensive capacities to meet the needs of different customers and cover a wide range of sports. Nevertheless, it may not be easy to commence your own betting business as it will require both a platform and design at the highest level that is complemented with intricate features. 

It is worth noting that involving experienced designers and developers in this process has a lot of benefits because they will develop vital parts like software, websites, and hosting among others. Additionally, the right domain extension for your business goals should be chosen.

This guide offers you ways to start a sportsbook and takes you deeper into betting on games. Lastly, to get more expert advice, get in touch!

Read Also: Comparing Top Whitelabel Sportsbook Providers in the Market