How to star a Betting Company and become a Bookmaker
Becoming a betting company is quite a restless startup. Betting is one of the more strict businesses to get involved in in the UK, right up there with credit and lending companies. Betting is often made out to be the devils work and many onlookers think bad of those operating betting companies. One thing to be well aware of as a bookie is there are also risks involved. As a betting company, when a player wins on your website or at your bookmaker store you will pay them their tax-free winnings. On the other hand, when a player loses money, your earnings are not tax-free. This is one of the bigger downfalls as there is just as much if not more risk involved for you as the betting company, this being that the player only has their initial stake at hand. For us bookies, we have the entirety of their potential winnings at hand.
For example, a player places a £100 bet at 5/1 odds. For this player, they have their £100 on the line. As a betting company you have £500 on the line, as if their bet is successful you not only pay back their initial bet of £100, but £500 in winnings as well. Really speaking, the bookie is taking the bigger risk.
As a betting company, startup capital is the main thing required, especially if you haven't got any prior experience to web development, branding or marketing. You will almost certainly need an attractive and memorable domain, logo and nice website or app design. Betting is hugely competitive between bookies today, especially if you plan on taking customers from already established big boy sites like William Hill, Ladbrokes or Betfred. Betting companies like these have millions of pounds worth of advertising costs weekly, with the Facebook, Google, YouTube, Football sponsorships and even TV show sponsorships between the ad breaks. On top of this, in order to increase customer acquisition you will need an attractive welcome offer and a good reason for them to join. After all, if a player is already satisfied with their current bookie, what reason do they have to register with your company.
In the below I will be covering a number of topics and go in-depth with some of the more budget friendly ways to start a betting company, though be aware that if you plan on a fast growth betting company startup you will need to have at least £500,000 to invest. Many betting sites over 2018/2019 came into the market and left within less than 12 months. We can look at MintBet, MustardBet and K8 Sports for a prime example. With these betting companies there were a number of factors I found wrong from my own personal view. The main one being branding. It just wasn't done correctly.
Starting your betting company
Building a presence in online betting industry can be a tricky thing to do. Firstly take a look at some other betting sites and give them a go yourself. If you can find some flaws that you think you can fix up or make better use of, take note and use them for your own company. One of the main flaws with betting companies is that they all use the same software so their websites are very similar. Therefore, the only way they are able to attract more customers over their competitors is to offer attractive welcome bonuses with well branded campaigns. If you're on a big budget, purchasing a premium domain name is always great practice. For those who are unaware of premium domains, an example would be bet.com, betting.com, casino.com and so on... These sort of domains will already get a lot of traffic from internet users going straight to the website due to the simplicity of their name. So, point 1 is to have a stable brand. You will need a nice logo, good colour scheme and a memorable name / domain.
If you are unable to have a custom betting software built, there are many providers for sports betting. One of the biggest being SBTech along side BetConstruct. These 2 providers can give you whatever you need in relation to starting up a betting website with some of the most complex betting systems integrated with simplicity. This process is known as white labelling, whereby the betting site along with the license is legally registered to the software provider. Your job is to build the traffic and generate revenue. However, the issue with this is always that you will need to pay a commission to the provider on your revenue. As well as the commission there is always an initial cost, starting from £20,000 for some of the lower end templates up to £250,000 for the best ones available. If you have the money available and the correct contacts, it is definitely recommended to have a custom system built. Due to the complexity of a betting site, this would cost upwards of £500,000. In the long run you will make this money back, as when your players start generating a revenue you aren't having to pay a commission to any software providers. Maybe just a tech / maintenance team which you would require regardless.
Building traffic and generating revenue is the main sport of being a betting company. The thing to remember is it's all about traffic quality rather than quantity. As a bookie the last thing you want is players joining and spending a few quid here and there then never returning. To keep repeat customers, regular offers and enhancements are recommended to keep your players happy. When a big betting event is on the horizon, enhanced odds or price boosts would help out tremendously in creating a big fuss for your customers to start spending again. Many bookies will do special price enhancements such as 25/1 odds for a certain outcome of an event, but the winnings will be paid in free bets. The maximum bet is usually quite low as well, no more than £5 for odds like this. This way, you can limit your losses if the outcome is in favour of your customers. By paying the winnings as free bets, it's a great way to keep your players spending and reusing your platform. This way, they will become more and more used to your system and eventually end up being what we call a quality customer.
So far, what you will need is a good, memorable name as well as a nice website, attractive incentives and offers to acquire new customers. You will also want special offers and existing customer offers to keep your current players satisfied. A dissatisfied customer will end up betting with your competitors and never returning. Building up trust and a reputable brand is an unbeatable ingredient to owning a betting company. After all, the last thing punters want is to be gambling on whether you're going to payout or not rather than the betting event itself.
Always pay your customers their winnings. The brilliant thing about paying your customers their winnings is that it always ends up generating a profit from new customers wanting a slice of the pie. We can look at the many times companies such as Paddy Power, William Hill and others have been featured on news websites due to their customers winning jackpots of up to £1M from playing slot games. As an operator, they don't legally have to pay these winnings. For those who are unaware, a gambling case can never be held in a court of law in the UK, therefore there would be no legal argument for demanding the betting company to pay their winning customers. But, these operators pay well to their winning customers because when it hits the headlines, almost every reader of 18+ will be joining their websites and spending money in hopes to hit the jackpot.
That rounds this article up and covers nearly all there is to know about starting a betting company in the UK. Becoming a bookmaker is definitely not a no-brainer. It's a strategic process and requires either a lot of knowledge, a lot of money or both.