How To Start A Sportsbook: A Complete Guide

A full guide to building a money-making sportsbook software in 2024. It covers getting permits, developing a website, handling risks, attracting customers, and keeping up with the new rules and trends. 

Right now is the time to launch an online sportsbook platform. The sports betting industry is exploding and posing new opportunities.

However, the operators who entered the industry unprepared, failed before they could take off.

Starting a sports betting business requires a good plan, the right tools, and smart strategies.

This guide is your runway to launch into the market successfully.

There are a lot of white label sportsbook solutions but we will help you choose from the best.

We’ll break down the steps, help you avoid common mistakes, and make your sportsbook platform stand out.

So, let’s dive in!

What is a Sportsbook?

A sportsbook is a platform that accepts and processes wagers on sporting events. It serves as a middleman between the bettors and the events they are betting on.

This sportsbook software platforms take players’ bets and pay them if they win.

You can expect odds in sports betting on all sorts of things- who’ll win the game, how many points will be scored, you name it.

The sports betting platforms make their money by taking a little cut of the action, called the “vig” or “juice”.

While brick-and-mortar operations still exist, the industry has largely shifted online, expanding your reach and operational efficiency.

Who is a Bookmaker?

Ever heard someone say “I’ll bet you 5 bucks”? Well, a bookmaker does that professionally and on a much bigger scale.

They are the ones who set the odds and take bets on sporting events.

Bookmakers balance the books to make sure they turn a profit no matter who wins.

They are always on their toes, adjusting odds based on everything from player injuries to the weather.

Nowadays, many bookmakers operate online, letting players bet from their mobile phones. It’s a high-stakes job that combines number crunching with a deep love for sports.

Let’s quickly have a look at the crucial functions that a bookmaker serves in the iGaming industry:

–  Crunching numbers to set fair betting lines.

– Processing wagers placed by players through the online platform.

– Monitor betting patterns and adjust odds to maintain profitability.

– Overseeing the automatic calculation and processing of winnings to bettors.

– Ensuring the platform offers features like live betting and real-time updates to boost player engagement.

Understanding The Sports Betting Market

The sports betting world is booming right now. It’s set to grow from $102.4 billion to $265.6 billion by 2034. That’s a 10% increase each year on average.

In the U.S. sportsbook solutions have generated over $9 billion in revenue in 2023, with about one in five adults trying their luck in sports betting.

According to a report by Future Market Insights, the online segment of this industry is really taking off as it is expected to reach $233.6 billion by 2034.

This growth is accelerated by increased smartphone usage and digital accessibility.

Starting a sports betting platform now could be a smart move. The market is growing as more people get into sports betting.

The scope of online sports betting is much brighter than you think!

Indeed there are complex sets of regulations that you have to deal with and you will be going up against some big sharks in the sea.

It’s not easy but there’s room for new operators who know what they are doing.

Read more: To get an in-depth idea about the sports betting trends, challenges, and opportunities.

Did You Know? 🤔 As of late 2023, 33 states in the US have legalized online sports betting platforms. Big states like California, Texas, and Florida might join soon which can lead to over $1 trillion in bets by 20230. You see how much potential the online sports betting industry holds!

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

Your startup costs for a legal online sports betting platform largely boil down to three choices: custom-built, white label sportsbook software and turnkey sportsbook solutions.

This decision is a major factor in deciding your initial investment.

Here’s the list of expenses you will have to bear if you go for custom development.

• Licensing fees vary widely by state, ranging from around $1,200 in some states to several thousand dollars in others.

For example in Massachusetts, sportsbooks must pay millions of dollars in licensing fees.

• An online sports betting platform can cost anywhere from $100 to $20,000. This cost can vary based on the services chosen.

• UI/UX design can vary widely, generally costing between $5,000 to $50,000. The costs can vary depending on the complexities of the design and user experience enhancements.

• Implementing software and technology (betting engines, odds management systems) can range from $10,000-$100,000 or more.

• Annual maintenance can cost around 10%-20% of the initial development costs per year, covering updates and bugs.

On the other hand, if you decide to go for online sportsbook software (White label or Turnkey) here are the costs you may have to bear:

• $5,000 to $50,000 to make the platform look and feel like your brand. The more unique features you want, the higher the costs.

• 20-50% of net gaming revenue goes to your provider.

• $20,000 to $200,000 per license, plus ongoing compliance costs.

The initial investment for launching a legal platform highly varies based on your approach.

Your budget will depend largely on whether you choose to develop a custom platform from scratch or partner with the top white label sportsbook providers.

Each approach has its own cost implications and benefits to consider.

Is it Legal to Start A Sportsbook?

Starting a sports betting platform isn’t a one-size-fits-all deal when it comes to legality.

It’s been quite a ride since 2018 when the Supreme Court knocked down PASPA (that’s the Professional And Amateur Protection Act).

This ruling really opened floodgates for sports betting across the US.

As we kick off 2024, we are looking at 37 states plus Washington D.C. that have given sports betting the green light.

Even more impressive, 30 of these states are cool with online sports betting.

It’s clear that people want legal betting options, and states have collected over $20 billion in revenue since PASPA got the boot.

Each state plays by its own rules. So, if you are thinking about jumping into this business, you’ve got to do your homework on local laws and licensing.

Wherever you operate, you need to stay on the right side of the law.

Global Sportsbook Legality: A Country-by-Country Overview 🎯 UK: Fully legal, Regulated by the UK Gambling Commission, £14B wagered annually Australia: Legal online and retail betting; in-play betting restricted,  AUD 4B market in 2022 Canada: Single-event wagering, legalized in 2021; CAD 1B+ expected annual revenue Asia: Mixed landscape, projected $160B market by 2025 Latin America:  Growing market; Colombia’s estimated at $200M in 2022

How to Start a Sportsbook in 10 Easy Steps?

Do you think you know more about sports than the bookies? Prove it by starting your own! Here’s how you can do this in 10 simple steps.

1) Research And Legal Compliance

Starting a sports betting platform is exciting, but it is important to understand the rules first.

The laws are different in many places, so you need to know what’s allowed where you want to operate.

Begin by looking into the laws in your area. What you can do in one place might not be okay in another.

This can be tricky, but it’s very important to get it right.

Here’s what you need to focus on:

• Find out who makes the rules in that particular jurisdiction
• Figure out how to secure a gaming license
• Learn about local gambling laws
• Understand age limits, advertising rules, and what you need to report

It’s a good idea to get help from lawyers who know about iGaming laws.

They can guide you through the tricky parts and ensure you are following all the rules from the beginning.

2) Develop a Business Plan

Now that you know the rules, it’s time to make a plan for your business.

This plan is like a roadmap that will help you make decisions as you build your sportsbook.

Your plan should cover all parts of your business, but it should also be able to change as you learn new things.

Here’s what to include in your business plan:

• Why should people choose your platform over others? Maybe you are easy to use, or you offer bets that others don’t.

• Think about who will use your platform. What do they like? What problems do they have that you can solve?

• Explain how you will set odds, help customers, and handle day-to-day tasks.

• Specify how much money you’ll need to start and how you plan to make money.

• Think about the potential problems that can potentially come up and how you are willing to tackle them.

Your business plan can change as your business grows. It’s a good idea to look at it often and update it as things change in your business and in the sports betting world.

3) Choose a Platform and Technology

Picking the right technology for your sportsbook is important.

Good technology will help your business run smoothly and keep your players happy.

You have two main choices:

• Build your sportsbook software
• Use white label sportsbook solutions
• Use Complete Turnkey Sportsbook Solutions

Going for custom development gives you more control, but it takes more time and money.

While white label software is easy to set up, it might lack customization options.

No matter what you choose, make sure it can:

• Handle lots of bets at once, especially during big games
• Changes odds quickly
• Keep your player’s information safe
• Work with different payment methods
• Integrates with third-party services you might need.

4) Build a Team

Your team is very important.

You need people with different skills to make your sportsbook work well. 

Here are some key people you will need:

• Someone to manage daily operations
• Someone to manage risks and odds
• People to help players with their queries
• Tech experts to keep your system running smoothly

If you are starting small then you don’t have to hire everyone right away. You can use outside help for some jobs at first.

As you grow, you can bring more people onto your team full-time.

5) Secure Funding

Starting a sportsbook software will cost a heavy initial investment.

You’ll need money for licenses, technology, marketing, and to pay your team.

Here’s what to do:

• Figure out how much money you need. Think about all your costs for at least the first year.
• Decide where you’ll get the money:
• Use your own savings
• Get a loan from a bank
• Find investors who want to be a part of your business
• Try crowdfunding if it’s allowed in your area

Each option has its pros and cons. Using your savings gives you more control, but you might not have enough.

Getting money from investors can give you more to work with. But they would want a say in how you run things.

6) Establish Partnerships

Good partnerships can help your sportsbook software do better.

Here are some partners you might want to work with:

• Companies that handle money transfers
• Companies that provide sports data and statistics
• Experts who can help you manage risks
• Tech companies if you are not building your system
• Sports leagues or teams (if possible)

When looking for partners, choose the ones that have a good reputation and can grow with your business.

7) Develop Marketing And Branding Strategies

In the saturated world of online sports betting, you need to stand out. Here’s how to get noticed.

• Create a unique brand. Think about things that make your platform special. Use this to create a name, logo, and style that people will remember.

• Use different mediums to reach people:

• Online Marketing
• Create helpful content about sports and betting
• Send interesting personalized emails to your players
• Work with sports websites and influencers

• Offer different types of sportsbook bonuses to new players, but make sure these follow the rules.

• Engage with your players on social media, run contests, and be more than just a place to bet.

Keep track of how your marketing is working and be ready to change your plans if something isn’t working as well as you hoped.

8) Launch And Operate Your Sportsbook

Before you fully open, do a small test launch. This helps you find and fix any problem before lots of players barge onto your platform.

During your test:

• Look for any technical issues
• Make sure all betting features work correctly
• Listen to what your first customers say and make improvements quickly
• Check that your customer service team is trained to help

Once everything is working well, you can fully launch. Be ready for lots of new players and have a plan for any problem that might come up.

9) Compliance And Risk Management

The importance of risk management tools for iGaming couldn’t be stressed enough.

It keeps your business safe and fair.

Here’s what you can do to manage risks:

• Have strong security measures in place to prevent fraud
• Set betting limits to avoid bleeding profits
• Watch for signs of gambling problems among your players

You can consider getting help from experts who follow gambling rules. They can help you bypass the complex jungle of iGaming regulations.

Time-Saving Tip💡 If you decide to go for a white label sportsbook software provider then you will get in-built security tools in the platform. These typically include fraud detection systems, data encryption, and even DDoS protection.

10) Expand And Grow

Once your sports betting business is running well, you can think about growing. Here are some ways to expand:

• Move into new areas, but remember each place has its own rules
• Offer new types of bets or add virtual sports or esports
• Improve your technology like adding live streaming or a better mobile app

As you grow, don’t forget what made you successful. Keep focusing on giving your players a good experience and following the rules.

Final Thoughts…

Starting a sportsbook software in 2024 is a big task, but it can be really exciting too.

This guide gives you the basics, but remember that the world of sports betting is always changing.

The key is to stay flexible and keep learning.

Focus on making your players happy, keeping everything safe and legal, and standing out from the crowd.

There will be challenges but don’t let that scare you. Use readily available white label sportsbook solutions to your advantage.

With hard work, smart decisions, and a bit of creativity, you can build something great.

FAQs

• What are the initial costs of starting a sports betting business?

  Starting a sportsbook business calls for a capital investment of at least $100,000. This includes costs for licensing, software development, marketing, and operational expenses.

• How can I ensure the security of my sports betting platform?

  To secure your sports betting platform, implement data encryption, access controls, fraud detection systems, and firewalls.

• What are the most profitable sports for betting?

  The most popular sports for betting include American football, basketball, and baseball. These sports attract significant betting volume, with additional interest in Hockey, Soccer, and combat sports.

• What is the Future of the sports betting business?

  The future of sports betting looks promising, with projected revenues reaching $45.9 billion in 2024. Trends like mobile betting and regulatory changes are expected to drive further growth.