Start a Sportsbook: 5-Step Guide
The decision to start a sportsbook may stem from many different reasons. This particular niche has been showing steady growth over the years, bringing more attention from business owners as well as users themselves.However, the main question that is on the minds of stakeholders is the way that you need to get such a business started.
If you have experience building another platform type, you can expect the sportsbook service to be more challenging. Understanding how to start a sportsbook from idea to launch is the first step to successful operations. We are here today to explain all the crucial pieces of the puzzle.
In our in-depth guide, we will walk you through the steps of starting a sportsbook and answer all of the burning questions about creating your own platform. This will help you make more informed decisions regarding the initial stages and the overall development process. Let’s get to it.
What is a sportsbook?
A sportsbook is a service that allows betters to wager money on the outcome of certain sports events. The bets can include who wins the game, the scores at the end of the match, and other predictions they’re able to make.
Typically, the owners of sportsbooks make revenue by taking commissions from winning bets. However, there are other types of payouts. When setting the odds, owners calculate their commissions into them, which in this industry is called vigorish or vig.
The increased interest in entering this niche is undeniable and evident. Since the lifting of the ban on betting in the United States in 2018, a lot of business owners and stakeholders expressed their desire to become a part of this industry. The revenue skyrocketed over the past five years and will only continue this growth trend. Researchers forecast the sports betting industry to be worth around $10 billion by 2028 so far.
Forecast sports betting revenue in the United States from 2020 to 2028.
Such a staggering number pushes more to look into creating their own service. Hence, we are here today to show you the exact steps to achieve a successful result. With that being said, building your platform for sports betting has quite a few more intricacies compared to other sectors. The first point of interest is building software that will fit your and your users’ needs best.
When it comes to starting your own sportsbook business, you have two choices to consider for the type of software you want. You can either buy a ready-made solution from a development provider or work on building your custom software. There are pros and cons to each option, so let’s examine them more closely.
Turnkey solution.
An off-the-shelf solution is a good fit for business owners who are starting their iGambling journey for the first time. Partnering with reliable software providers can enable you to launch your business in relatively short terms and provide a consistent experience for users.
On the other hand, turnkey solutions can limit your ability to customize the platform according to your needs, as well as the technology used during development. You will also heavily rely on the provider to make decisions and support your software, which can be risky if the partner is not appropriately chosen.
Custom software.
A custom own sportsbook solution gives you a lot of room to build a service that is completely tailored to your image and needs. You are not limited to pre-made solutions and have complete control over each of the development aspects.
However, creating a platform from scratch requires a lot of knowledge of the industry and the necessary requirements for successful sportsbook operations. It can also take more time and budget to build a service from the starting grounds.
Looking into how to start your own sportsbook is the first step to understanding what kind of solutions will fit your business best. Therefore, we suggest you jump into the already detailed steps of creating a service of your own.
How to start a sportsbook in 5 steps
Understanding how to create a sportsbook of your own is the first step to wrapping your head around entering this niche. Having the platform you will be operating on is the cornerstone of your business, so you need to take the development process seriously.
It is also an excellent idea to consult with providers of iGaming solutions before you jump straight into the process. A team of specialists with experience in this industry will be able to guide you through the essential phases helping you make appropriate choices.
In any case, we have outlined five crucial steps that you need to take in order to build your sportsbook platform. Let’s observe each stage one at a time.
Step 1: Define your business requirements
The first step every business owner should take when starting a sports book is to gather any requirements for the project. Initially, you need to establish a realistic budget and timeline for developing your platform. Then, you can give yourself an opportunity to formulate your idea for the sportsbook.
Business requirements.
At this point, as well, consulting with sportsbook software providers can be a good idea. Professional vendors that have experience in this field can guide you through the necessary requirements, such as what kind of features you actually need, what market you are going to cover, what multiple selection of payment methods you are going to be providing, etc.
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: Conduct market analysis
Receiving a better understanding of what kind of software you need to develop, you must conduct in-depth market research. This means taking a better look at your competitors and making notes of what makes them attractive to users. Additionally, you don’t necessarily need to copy them, but this info allows you to gain a plenty of competitive edges.
Market and objectives analysis.
The point is to get a sense of their operations to outperform them later. Taking a look at their sportsbook design is also beneficial to comprehend what kind of color schemes and layouts appeal to bettors. Additionally, analyze the functionality of the software before you open a sportsbook so you know what to offer to your customers.
An essential part of the analysis process is the user research. To be able to attract and retain users, you need to paint a complete picture of the target audience. Many businesses start by creating user personas with detailed descriptions of potential users. That way, you can evaluate their pain points, needs, and expectations from the service.
Step 3: Design your sportsbook
With your requirements established and market analyses complete, you have the foundation to begin building your platform. As in most cases, the development starts with the design. Typically, it is divided into two specific parts – UI and UX design.
Sportsbook design.
During the user interface stage, the team consists of design specialists who create wireframes and mockups of the platform, serving as the first look at the final product. These are visual representations of the layouts and content distribution on the page. Later, you can approve of any branding and color-related choices that you want with the use of pallets.
The principal thing to keep in mind when creating your own sportsbook design is that users need usability. The UX design portion works on precisely that – building a user-centered experience, ensuring the design is intuitive and doesn’t confuse the person by providing a smooth flow of operations. The user experience design step is imperative as it can play a major role in user satisfaction when interacting with your platform.
Step 4: Start the development process
After you complete the design stage, you can move forward with sports betting software development. At this point, the development specialists take the final design and implement it into the platform. They also work on building all the essential components of the software, such as the main features, database integrations, and other server-side operations.
Development process.
During the development stage, you need to think of what payment methods you are going to provide your users with. It has become a widespread practice to offer additional payment options such as cryptocurrency, so it is one of the aspects of how to run a sports book successfully. Some of the most popular cryptocurrencies you can include are Bitcoin, Ethereum, Tether, and Cardano.
In addition, you must select what kind of sports events you will cover and the range of sports variety. For example, a few of the most in-demand sports betting events are:
- The FIFA World Cup
- The Super Bowl
- UEFA Champions League
- NFL
- Summer Olympic Games
Luckily, many options are available for you to choose from, so narrow down your list. That way, the development team can implement the correct types into your platform.
Step 5: Test and launch your platform
Finishing working on your sportsbook, you must undergo testing sprints. This stage allows you to ensure the code is bugs-free and functions as intended. There are many kinds of tests quality assurance experts can conduct to identify any faults or vulnerabilities in the code and effectively eliminate them.
The quality assurance process.
Some of the primary testing sprints that a quality assurance engineer can conduct include unit testing, integration testing, end-to-end testing, user acceptance testing, and more. It is important to pass this step before making your software available to the public too.
Lastly, after rigorous testing, you can finally move on to deployment of your platform and making it available to the consumers. The development team will transfer your software to the public server, and your sportsbook will officially go live.
In the long run, you must remember one thing: to ensure you are running a sportsbook properly, you have to secure ongoing maintenance and support. As you are carrying out operations, the platform must be kept up to date and protected in case of any unforeseen events. Over the years, you will most likely require technical maintenance, like annual certificate updates, so having a consistent monitoring team is integral to long-term success.
How much does it cost to start a sportsbook?
After reading the guide to crafting a betting solution, the next question that is naturally on your mind regarding how to start a sports book is just how much money you need. The answer can end up being more intricate than you would like. Let’s unpack it one item at a time.
First and foremost, we highly recommend you reach out to professional software providers that have a proven track record of building similar platforms. An experienced team will be able to consult you on your project and provide a custom quote that you can work with. At Limeup, we have worked on various betting projects and understand the scope of this niche to provide you with an accurate price estimation.
Nonetheless, the question of price depends on many factors. The main one is the scope of work that has to be completed. In general, high-complexity platforms with many custom features and designs tend to be more expensive as opposed to basic solutions with pre-made templates and simple functionalities. This factor ultimately comes down to the amount of work hours required to complete each stage of platform creation.
You can expect the level of experience of software specialists also to play a role. After all, the services of junior developers are usually lower than middle and senior-level experts. Other determining areas, such as time and budget constraints for the sports betting app development, can become a significant factor.
Overall, the development of a sportsbook platform may end up costing anywhere between $50,000 to $100,000. With such a wide range of prices, it is essential to consult with a trustworthy development company and get an estimate on your specific project. Having this information on hand will allow you to move on to other stages properly.
Is it legal to start your own sportsbook?
Running a legitimate sportsbook business is entirely possible if you adhere to regulations. Opening up a service without checking relevant compliances is a dangerous practice that is highly discouraged. Ideally, you want to partner with reliable legal representatives specializing in gambling laws.
To start a sportsbook that is fully legal and compliant, you will require two resources: time and money. Depending on where you are going to obtain a license, this could potentially be the most expensive part of opening such a business. As for the time, licensing may take anywhere between a few months to a year. So, be prepared to handle these nuances.
Obtaining a license in the region where sports betting is legal according to the local jurisdiction is crucial. Luckily, many states and countries allow for legal gaming business, so there is some room to make a fitting decision. If you are planning to run your sports betting business in the US, the main regulatory bodies that you will come into contact with are the Federal Trade Commission (FTC) and the Department of Justice (DOJ).
Based on the state, you will be required to comply with different regulations. However, on the overall landscape, you need to ensure your sportsbook abides by general laws, such as tax laws, data protection laws (GDPR), anti-money laundering laws, etc.
One curious regulation that you should keep in mind is responsible gaming. This refers to a set of practices that ensure the bettors are protected from becoming addicted. Some of these practices include daily betting limits, deposit limits, warnings, and others.
In summary, getting licensed and running a law-abiding betting business is not easy, but it is possible since many sportsbooks have gone the same route successfully. The crucial aspect is not to do it alone but to seek out professional legal counsel to be sure every factor is in check.
Need help with starting a sportsbook?
Becoming a sportsbook business owner is a hefty endeavor that requires a lot of research and understanding of the industry. Unlike many other startups, this niche is budget and time-heavy, so that you must weigh all the pros and cons and be prepared to tackle the creation of your platform from start to finish.
While you can do most of the education about the gambling sector on your own, you will still need support from other specialists down the line. The legal counsel will guide you through all the necessary steps of being a responsible and compliant business. At the same time, the development team will be by your side to build a fully-functioning software that is competent and speaks to your target audience.
In our guide, we have explored the five essential stages of starting a sportsbook platform, as well as other crucial factors that you need to account for when getting started in the niche. If you need any help with developing your betting software, be sure to reach out to our professional team. We are ready to answer all your questions and consult you on creating an ideal solution for you.