Back in 2011 I was very interested to launch my own sportsbook site. I had been involved in the online gambling world, and particularly sports betting, since 2002 or so, and as I've often came in touch with affiliate managers, traders, webmasters, players and even highest directors, I had a good clue about how a bookmaker should be run and what is required to make a successful project out of it.
I didn't have a big budget so obviously I couldn't afford to buy one of the expensive white-label solutions offered on the internet, while developing the software from scratch and also getting a gaming license is more like science fiction than reality if you don't have a HUGE amount of money to invest. So I went for one of the small gaming software providers (I won't mention their name) that offered me a solution that included sports betting, casino and poker. The problem was, their software could be hardly implemented from a technical point of view and what's even worse, the deal they came with (who gets what and how much in %) was not exactly good for me, considering that I was about to do all the hard work, develop and market the website. So I just gave it up shortly after that, even if I had a very good plan that was meant to succeed (no modesty this time).
But this article is not about my own experience in particular. It's about white-labeling in general and I'd like to share with you what I've learnt about sportsbook software providers and running this kind of internet business.
What is a white-label SPORTSBOOK provider?
A white-label product or service is a product or service produced by one company (the producer) that other companies (the marketers) re-brand to make it appear as if they had made it. That's the official definition and in simple terms in means that you use something you don't own for a pay. In our case it's the software, that comes in the form of a "skin", along a wide range of fully-managed options in many cases: back office, reporting tools, website and design, betting markets (odds), risk management, bonus options, affiliate software, gaming license etc. etc. It's basically all you need to get things going with a ready-made software, for a set-up fee or/and weekly/monthly/yearly commissions.
So basically, there are two ways you can get started:
1Look for a turn-key ready-made solution as described above;
2Create your own sportsbook software from scratch; this will require big financial efforts but also more time and human resources, as you will need to hire people for every department (customer support, traders, designers, managers, rent office, etc etc).
I don't want to imagine the costs of creating the software from scratch and all the efforts associated with it, but I know that white-label software providers generally charge between €30,000 - €50,000 in set-up fees + %. They are generally divided in three groups:
1Those who charge a medium to high set-up fee but offer more than 50% in share revenue to the "skin" owner;
2Those who charge a small set-up fee or don't charge a set-up fee at all, but who will generally want more than 50% in share revenue to them and less to you as a brand owner.
3Pay per Head suppliers; they are a relatively new option but it's becoming popular in the last few years. Although no gaming license will be provided, they offer sportsbook software that can be used by the bookmaker for a relatively small commission for every active player. Browsing the internet I've found one at The Standard, who does not handle any of the bets directly and only charges the bookie a usage fee for utilizing the software on a weekly basis. The fee is determined by the number of active players. This is known as Pay Per Head in the industry and you can read more about here.
- White-label providers that usually charge high-set up fees offer more options and a better service in general; however they are rather interested to sell the software to as many clients as possible, rather than help them succeed. So from the moment you buy the sportsbook software, it's really only up to you whether you manage to create a strong brand out of it and make money or quit soon after. I've seen a lot of operators proudly launching to fail miserably in a relatively small period of time, mainly because of bad management and faulty marketing.
- I've seen white-label software providers charging as little as $3,000 in set-up fees + a small monthly commissions (20% to them and 80% to you for example) and that could be appealing to many; the problem is, what they offer is outdated and chances to succeed in today's growing and extremely competitive gaming market are nearly zero.
- Understanding the players's needs is a must. Before you agree to get a deal with a software provider, ask yourself if you would like to visit such a website if you was a player. Try to look at things from player's angle and be honest about your potential and expectations.
- Wise marketing is the key. Marketing is not about throwing away as much money as possible just to make yourself visible. It is getting more money in revenue than you have previously invested. I don't want to be malicious, but as a webmaster, I have the feeling that a lot of marketing/affiliate managers don't have a clue what side of the world they live in.
- Get local. It is nice to think that your brand is going to be the next Bet365 for Europe or the next Sbobet for Asia. But that's just not going to happen and instead of going for the big battle and lose with no glory, try to win small battles. In simple words, focus on those markets (countries) where you can have an advantage. Translate the website in local languages, adjust promotions to match local needs and be creative when it comes to online but also offline marketing.
Interested about and would like to hear more ideas? Need a partner for your adventure into the gambling industry? I'll be happy to hear from you, just get in touch using the contact form on the website.
Teddie, the Asian Handicap Tipster