How to start sportsbook in 2023

how-to-start-sportsbook-in-2023

The sports betting industry is growing internationally. 2022 has been an important year since sportsbooks became legal in some of the US markets, and at the same time, the global industry is projected to grow at an astounding 10.23% of growth rate. So today is the best time to join the sports betting market and start your sports betting business.

Sportsbook software has been an important part of online casinos since they drive around 40% of their monthly revenue. According to Statista, the sports betting and lottery market size has reached 231.33 billion by the end of 2022. Considering the sustained growth of the sports betting market, getting a sportsbook solution is a profitable undertaking for your business. In order to find out how to start a sportsbook and make the best out of this venture, keep reading the article.

Why do you need to start a sportsbook?

Online sports betting is in a better form than ever. As we have already mentioned, online sports betting accounts for more than 40% of all iGaming revenue, and the projected year-on-year growth in 2020-2025 stands at 10.23%.

Sports betting in developing markets like Africa takes the most significant slice of the cake. This is partially due to infrastructural limitations that make other forms of iGaming less feasible, and Latin America, where passion for football propels the use of betting products.

The US market is another excellent example that proves the profitability of the sports betting business. In 2018, the Supreme Court allowed the legalization of sports betting at the state level. This resulted in the gradual opening of an enormous and highly wealthy market. As a result, in 2020, revenues reached $1 billion and are expected to rise to $8 billion by 2025.

This data is a good indicator of the great potential of the sports betting business. Modern punters and average players often opt to visit betting sites and place wagers on the possible outcome or on their favorite teams.

On the other hand, we should not forget esports, one of the fastest-growing and most popular sports industries in the digital world. According to Statista, the global esports market was valued at 1.38 billion U.S. dollars in 2022 and is predicted to reach $1.86 billion in 2025. Does it ring the bell? These estimates give you the perfect answer to the question of why you need to start a sportsbook.

How can you start a sportsbook?

There are a few options for starting a sportsbook. You can start from zero and do everything yourself or use a white label platform or turnkey solution to obtain sportsbook software through sportsbook API integration

In the case of a self-service sportsbook platform, you are following an approach where you have to develop sportsbook software by yourself. In the best scenario, it gives you absolute independence – you are the owner of the platform and have a chance to make unlimited customizations, create your unique UI/UX design for the website, build a bonus system according to your preferences, use the bet builder and have your own back-office. 

On the other hand, if you decide to create a self-service sportsbook platform, you have to pay a high price to hire software and web developers. Furthermore, this process might take too much of your time, and in the end you may find out that it was a nonprofit, unremunerative venture. If you are not an experienced operator with a strong back up of long-term practice and involvement in the sports betting sector, this solution is not for you. 

Instead, you might opt to contact a sportsbook solution provider and acquire their software for your sports betting site or online casino. You can choose the second option and acquire the sportsbook software via white label solution, which incorporates the sportsbook API tool. A white label allows you to develop the front-facing portion of your online casino according to your needs. You can also get a turnkey solution that incorporates the sportsbook API integration, is customizable, and saves you from most of the work involved in getting the website up and running. Upgaming can help in both of these cases. We offer turnkey and white label solutions for our clients. These include access to sportsbook software with our sportsbook API Integration and many other products.

Sportsbook software will require various subsystems that we’ve discussed above. Integrating one or more payment options to allow players to deposit money to the website is the first priority. Next, you will need to source tools such as CRM software or affiliate systems for customer segmentation and trend analysis in order to create effective retention and acquisition campaigns. These, in turn, require a robust bonus system with effective promotional tools to appoint free bets, deposit match bonuses, and other incentives to players.

Afterward, the sportsbook will also need skilled personnel. No business can function without the right people. You need a customer service team that will help players with technical issues, marketers who help you to promote your online betting site, legal experts who ensure that your sportsbook is compliant with the local regulations and does not violate the rules of the given jurisdiction, and many other divisions.

We’ve discussed the two most effective solutions for acquiring sportsbook software – turnkey and white label. Nonetheless, there is more than Upgaming can offer you. In specific, what we’ve got in our portfolio of proposals is the Sportsbook API integration. Sportsbook API is the tool that ensures the seamless and fastest integration of the sportsbook software into your platform, whether it will be an online casino or sports betting site alone. Upgaming’s sportsbook API integration guarantees the fastest execution of the process with the whole package. 

What are the essential parts of the sportsbook software?

n order to launch an online sportsbook, you need sportsbook software, otherwise known as the betting platform, which is quite complicated software, including risk management and anti-fraud system, payment system, bonus system, various types of games, including virtual games, e-sports, and other iGaming solutions. Nevertheless, the most essential parts of the sportsbook solution are live events, pre-match events, tournaments, and the number of markets. Let’s discuss these elements to understand what they represent and how they comprise high-quality sportsbook software.

Live events

Live events are the most important part of the sportsbook, enabling players to bet on the events that are taking place at a given time. Thus, live betting occurs throughout the game, and odds can change quickly during the game depending on a variety of factors such as possession of the ball, the number of corner kicks, and so on.

Concerning e-sports, live events are all about the community and atmosphere. More than 81% of the players attend esports events to be a part of the gaming community and watch their favorite players and teams while betting on their favorable outcome.

When making a choice, you must select the software provider which offers a rich amount of live events in their sportsbook solution. Bear in mind that before arriving at a final decision, it’ll be better to compare various sportsbook software from various providers, weigh the pros and cons of each one and find out how many live events they offer.

Upgaming is a leading sportsbook solution provider incorporating +82 000 live events in its sportsbook software that you can get with API integration, giving your players multiple options to choose from and bet. Regarding the e-sports betting options, there are more than 3 400 live events that players can wager on.

Pre match events

Pre match events are organized before the beginning of the important match or tournament (for instance, the World Cup or UEFA Champions League). Here, unlike live events, players have more time to think and devise a preferred strategy, weigh the pros and cons of their choice and make a rational prognosis about the probable outcome.

While live events are the most popular types of events, pre match events are also an essential and indispensable part of the sportsbook software. Your clients will have various preferences, and some may feel more comfortable betting on pre-match events. Thus, you should be able to provide a rich quantity of such events to enable your users to wager on the different types of games. Upgaming’s sportsbook software includes more than 75 000 pre match events, giving you access to many matches and tournaments.

Sportsbook tournaments

Sportsbook tournaments are competitions in which players bet on various sports events. Nonetheless, in such contests, users are not playing against the in-house bookmakers or traders. Instead, they play against each other. In general, the sportsbook tournament closes in several days. In such events, players try to guess the results of multiple games. One who correctly predicts the highest amount of likely outcomes of the games is the winner.

Needless to say, there are additional prizes and bonuses for active players. Such accolades are included in the bonus system of each sportsbook solution provider, and there must be a possibility to add customized options too. The greater the variety and the number of such prizes, the more players will be interested and engaged in tournaments.  

Amount of markets

There are many markets and wagers available for players. Different types of markets can be denoted by different names in various parts of the world. Furthermore, certain types of markets that are very popular in one country may not be available elsewhere. 

Nonetheless, the major markets are still accessible on every sportsbook software, and it’s not only the types of markets that determine the quality of the sportsbook but the amount of them. In other words, the variety and the quantity of the markets shape the overall performance of your sportsbook software. Upgaming’s sportsbook solution includes 4 500+ markets giving your players multiple options and probabilities to wager.

What should you consider when choosing a sportsbook software provider?

Only a few sportsbook software providers in the iGaming market offer high-quality sportsbook solutions to online casino operators. While each provider claims to have the best and leading sportsbook solution, you must carefully choose the most suitable option that offers the essential parts we’ve discussed above and provides all the features we will review below. 

Before you start researching the offers of various sportsbook software providers, you have to define what is essential for you, your goals, and what you expect from the provider. Nonetheless, you should consider some very significant points before making a final decision. We’ve compiled a list of these points and questions that will help you to choose the right direction. Below, you can see the outlines of the central questions you should ask about the sportsbook solution providers before choosing one for your online casino.

Is the provider experienced in the market you plan to operate in? 

What you must seek in the sportsbook software are the sports types that are the most popular in the market you plan to enter. If the provider does not incorporate the sports types that are well-known and popular in your target market, then buying their sportsbook solution is a waste of time, money, and effort. 

Furthermore, sportsbook software providers who have practical knowledge of the specific markets can offer payments, bonuses, and designs that are customized and adapted to the very same market. Thus, if you find such a provider, you don’t need to worry about the painstaking process of making numerous changes to your sportsbook platform to re-adapt the software to the requirements and trends of the desired market.

What type of sports do they provide?

The most popular sports in the iGaming industry are football, tennis, horse racing, American football, and golf. But only these categories are not enough to comprise a sportsbook software that will meet the needs of your players. The point is that online casinos can be accessed from everywhere. Your players are coming from various corners of the world with different backgrounds and preferences. While the most attractive option to bet for the average user can be football, you will also have players who prefer American football, rugby, netball, and so on. The rule of thumb implies that plenty of options are better for the satisfaction of your customers.

Do they have esports and virtual sports?

Another big venue for players is esports. You should check out the list of games in the provider’s esports library and ensure that it includes names such as League of Legends (150 000 – 200 000 players/viewers live every second), Starcraft (170 000 viewers), Cs: Go (328 000 viewers on average), Call of Duty (77 000 viewers on average), Dota (66 000 viewers on average), Overwatch (12 268 viewers on average), etc. 

Esports is sometimes considered the future of betting due to its growing nature and popularity worldwide. In 2022, the global esports audience size equaled 532 million users tuning in to watch and play their favorite games. This number is predicted to increase and reach 640.8 billion in 2025. This is why having esports games in your sportsbook software matters so much.

Virtual games are also an indispensable part of sportsbooks. They deliver instant gratification and are very exciting to play. In simple terms, a virtual game is computer-generated software that imitates real-life sports. The game is fast, funny, and delivers quick results. Many players prefer to make simple bets and wait for the program to finish the game and deliver the final outcome. 

Do they have a team of in-house bookmakers?

The team of in-house bookmakers is composed of experts who analyze and set the market coefficients 24/7. Bookmakers accept and pay off bets on sports events at agreed-upon odds, which can change during every minute of the live events. So, why do you need in-house bookmakers for your sportsbook software? Because, without them, your sportsbook business just won’t work – nobody will define the market coefficients, and only on the standard, pre-arranged odds your iGaming business will just fall off the cliff and experience failure. 

Bookmakers do more than just predict the outcome of certain events. They must alter the market coefficients in favor of the business. If it’s not happening, then there will be nothing but a fiasco – the situation in which there are two static categories – losers and winners, and if we are on the same page, then you don’t really want to be a loser. 

Are their odds competitive?

Better odds mean more loyal customers. They will bet on your sportsbook platform more frequently if they see that you are offering higher odds. This is why your odds must be competitive. 

To demonstrate it in a simple way, let’s say that the odds that team X will win the match is equal to 1.60, but on your competitor’s betting site the odds for the winning of the same team is 1.80. If that team will actually wins the match, then the players who placed the bet on the very same outcome on your competitor’s website will win more than players who placed the same bet on your site. This means that the odds of your sportsbook software provider aren’t very competitive with other providers’ market coefficients. If such a situation prevails, you will lose your clientele in the long run, and your players will also move to another sportsbook platform. 

Needless to say, this is a very simple picture, and in reality, everything is more complex. Still, all of it depends on the bookmakers and how they set and change the market coefficients. Therefore, be cautious and choose the sportsbook solution provider that offers competitive odds.

What additional features does the sportsbook have?

Sportsbook software includes many elements apart from the features we’ve discussed above. These elements are bet builder, bonus system, payment system,  risk management tools, sportsbook API integration, and other marketing tools such as CRM software. Let’s discuss each of these items below.

Bet Builder

Bet Builder is a software incorporated in a sportsbook that calculates the odds using predefined, early predicted odds. This automated betting version lets you view the stake amount, events, and total odds. It also means you won’t have to reach the online bookmakers to request all markets you want to combine into a bet.

A bet builder considers the impact of each scenario on others and offers bettors fair prices. You can use these features for a small selection of sports to create your own bets automatically.

Bonus system

A bonus system is one of the crucial elements of a sportsbook that helps you to retain your customers. Every bonus system is supposed to have standard bonus types within it, but what you should look for is the possibility of customized configurations. In other words, you should be able to create unique bonus types only you can offer to the players. It will significantly affect your retention rate and increase the player’s loyalty to your sports betting site.

Bonuses, tournaments, and leaderboards are great incentives for players and can significantly increase your customer acquisition and retention rates. Therefore, you must carefully choose the sportsbook software provider that offers the best sportsbook solution with a rich and customizable bonus system and other marketing tools to help you to increase the performance of your online casino. In order to understand more about bonus systems, you can check the following article.

Risk management tools

Risk management tools and anti-fraud systems are the defensive walls of your sportsbook software. Sportsbook solution provider must offer a risk management system that monitors and tracks potential risks and fraud attempts. 

Fraud prevention and cybersecurity are the biggest concerns in the iGaming sector. Therefore, it should be your priority to acquire an anti-fraud system with modern AI tools. These tools quickly identify potential fraud attempts and send the information to you or your anti-fraud department.

Other marketing tools

These tools include CRM software and an affiliate system. CRM software will help you to manage customer acquisition and retention tactics and provide data that can be used to devise new, result-oriented strategies. An affiliate system is a tool that will aid you in creating your affiliate network and manage your website’s online advertising activities by monitoring, analyzing, and optimizing the performance of your advertising campaigns through your affiliates.

Standalone Back Office 

Why do you need a back office for your sportsbook? Because this is the most suitable and effective solution to oversee and manage your sportsbook operations from a single place. The back office is the core of your sportsbook business, giving you the unified foundation that lets you gather data and manage the software without requesting information from various places. 

It is effective and can spare your time and effort by letting you efficiently manage your sportsbook. For instance, you can manage your website design, set limitations on a player or group of players, control bonuses and design unique bonus types for loyal players, monitor the progress of your business, and get constantly updated reports. 

Licensing

Every online Sportsbook Operator knows that the international legal environment is complex and subjected to change. You must always be up to date with industry developments and news. Although the online gambling business can be very lucrative, operators must adhere to various regulations and rules. Sportsbook operators must have licenses to be allowed to operate on the largest markets in the world.

There are various online gambling licenses that provide legal permission to serve international clients, including the Curacao gaming license, Malta gaming license, Isle of Man gaming license, Kahnawake gaming license and so on. You can read our article about iGaming licenses to get more information on that topic.

Sportsbook operators must be subordinated to at least one jurisdiction in order to operate legally. Operators who want to start their own sportsbook must have a gaming license. The license is a factor that proves your reliability in the mind of the customers. The iGaming license also ensures that your products are genuine and have not been falsified. This is a brief overview of the benefits that iGaming licenses provide and why you should have it:

·         Legally administer your service to citizens all over the world

·         Increase the credibility and authenticity of your business

·         You can operate on a global basis in more jurisdictions

·         Get the trust of your players as well as other service providers

·         eliminate the possibility of being arrested, fined, or even prosecuted for illegal functioning

·         Run advertising campaigns

Frequently asked questions

How to get a sportsbook license?

First, you need to know in which markets you want to operate your sportsbook business, and after that, you can think about the specific licenses you need to start your sportsbook. Various types of licenses enable you to run your business internationally, such as the MGA license, Curacao gaming license, Alderney gambling license, Kahnawake gaming license, etc. You can also find numerous local licenses that give you the right to enter a specific market, such as a UK gambling license. Nonetheless, at the initial stage, it is always better to apply to a jurisdiction that provides an internationally recognized license. Afterward, you can get numerous local licenses if you want to.

What is sports betting software?

Sports betting software is another name for sportsbook software, which is complex software that incorporates many features and subsystems. It enables the online casino or sports betting website operator to receive bets from users. Sportsbook software offers live events, pre-match events, tournaments, and multiple types of betting markets to let customers place the bet on various odds and possibilities. 

What is a sports betting API?

Sports betting API is a tool that enables you to integrate sportsbook software into your platform quickly and securely. Sports betting API integration is the seamless and fastest way to acquire sports betting software and access the sportsbook content, including multiple types of sports, e-sports, and virtual sports. 

What is white label sports betting software?

White label solution is one of the most effective solutions that help you to acquire sportsbook software. As we’ve mentioned in the article, there are two ways of starting a sportsbook business, first way is to do everything by yourself (AKA self-service solution), which costs you a lot and requires a lot of time and hiring skilled personnel. White label solution is the second and the best method for getting a sportsbook, because it gives you a tailored, off-the-shelf, ready-made software that you can directly integrate into your website. By opting for a white label sports betting software, you are saving time and expenses that otherwise could reach very high numbers.

Why should I use a sports betting development company?

Sports betting development companies have years of experience in the sports betting market and certified, reliable product. The service and products they offer are of high quality and can be used on any platform and website. Suppose you plan to start a sportsbook business solely by your own efforts, without the help of sportsbook development companies. In that case, your venture will be vulnerable to pitfalls and complications that might arise during the process.

 How should I choose a sports betting software provider?

There is a huge list of factors you have to consider before choosing your sports betting software providers. All of these factors are covered in the given article, but for the most part, you should choose a provider that offers various sports in its live and pre-match events. You also need to verify that their sportsbook incorporates e-sports and virtual sports, has competitive odds created by in-house bookmakers and has a rich variety of betting markets.

How much do I need to start a betting company?

Getting an overall analysis of how much it will take to start your sports betting business is very hard and depends on the hundreds of factors that may change at any time. Nonetheless, if we disregard the unanticipated costs and unplanned expenditures, you may need from $5 000 to $10 000 at the initial stage to start your online betting company.