Running an Online Sports Betting Business? How to Do It the Legal Way
According to Statista, the size of the US gambling industry lies at $74.39 billion. Running online sports betting business is a lucrative way to earn money. Becoming a bookie can change your financial status to new heights.
Have you ever thought of starting of legal sports betting business? What challenges did you encounter on the way? There are many challenges that you have to overcome to become a bookmaker.
From stringent laws to high initial capital investment, starting an online betting business is no easy task. This article is a guide to aspiring bookmakers on how to establish a legal betting business.
Understanding the law
First things, first! Some laws govern online gambling in the US. You must read all the legal provisions before making a move.
Your attorney should guide you through all legal work so that you can operate legally. Firstly, familiarize with all the laws appertaining gambling in your state. Not all states have legalized sports betting, and thus you might be aware of the current situations.
States that had licensed sports betting by 2018 include;
- New Jersey
- West Virginia
- Rhode Island
Other states have the potential of legalizing sports betting in 2019. Make sure that online gambling legal in the particular state you are planning to start.
Also, get to learn how taxes work to avoid being at loggerheads with the taxman. Some states tax even more than 40% of your revenue. You must also be aware of other legal provisions such as remitting winning to clients and age requirements.
Research the Market
Always remember the rule of the thumb. You should take time to research and get facts about your market. Don’t to put your money somewhere in the wild and expect to succeed.
There is a lot of profits at stake, and the industry is growing at a high rate. However, the market is competitive, and therefore, you need a better approach to stay in business.
Market research helps you map both long and short term plans with ease. Also, you get information on what products to include in your website. Different localities have different preferences for gambling products.
Some states might have booming online casino markets while others might be skewed towards sports. The research will enable you to determine the most profitable niche to adopt.
Find a Gambling Software Provider for Your Sports Betting Business
The law requires all bookmakers to find the most secure and stable software to run the betting activities. If you not in a position to create your software, partner with a reliable provider.
It is next to impossible to secure a license without a functional software. When obtaining a betting software, ensure that it fits your functionalities. Your technology provider can customize the software to suit your requirements.
The gambling software must have the following;
- Payment gateway segment
- Back-end technologies
- Back office management tools
- User-friend front end
- Gaming management system
- Access to betting markets and events
- Account management and support services
In some states, you have to demonstrate the functionality of the software before obtaining a license. The gaming commission has to ensure that customers won’t endure inconveniences due to improper software.
Obtain a Gaming License
There is nowhere you can operate any business without a license. Each state has a gaming control board that oversees all gambling activities. These boards also issue potential bookmakers with permits to conduct their transactions.
To obtain a license, you have to apply with the relevant commission or agency in your state. The agency/commission will evaluate your potential and determine whether or not you are capable of. Obtaining a license is time-consuming, and you might need a gambling attorney to assist you in securing one.
The cost of obtaining a license is very high. For example, the license fee in Pennsylvania stands at $10 million. The license fees are different among the several states.
Choose a Payment Provider
Betting regulations require that the bookmaker should provide multiple payment options to customers. Your tech partner should be able to integrate multi-currency support services. Besides, the payment options should be incorporated into the website.
Online payment methods enable customers to deposit money and withdraw winnings at any time. The payment method should be functional and reliable at any given time.
The most popular payment methods include;
- Wire transfer
If you want to run a successful online sports betting business, the above payment methods can be helpful for you.
Understand the Art of Making Odds
How you provide the odds determines whether gamers will play. Your odds can make the bookmaker popular or unpopular. You should create the odds in such a way to attract gamers.
Setting odds is never an easy task. You have to balance between liability and commission. Gamers like to play in the most profitable bookmakers to increase winnings. As a bookmaker, you should concentrate on low-profit margins but high customer volumes.
Retention of customers might be different if you don’t provide competitive odds.
Setting Up a Business Website
Creating a gaming website may be a tough task because of the technologies used. Can your site attract and retain gamers? A reliable betting website should be stable with a great UI and UX.
Your tech provider should create a website that will incorporate gaming software and payment methods. Choose an attractive design that will make it distinct from competitors. You may also need to build a mobile app as many people now users mobile devices more.
Promoting Your Business
If you want to gain ground and attract a large customer base, marketing should be your priority. Your main aim should be promoting a trustworthy and reliable gambling platform.
You can offer winning bonuses, loyalty payments, and signup bonuses to attract customers. Research on the marketing strategies of the top global websites to see how they do it.
The Bottom Line
If you want to set up an online sports betting business legally, follow the above guidelines. Since betting ventures are worthwhile, you should take time to pursue all legal provisions and things will be easy. Do not let the law catch up with you for not following the requirements.
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