By now, everyone is aware that the novel coronavirus pandemic had a massive impact
on sports. The 2020 season was canceled and many sports betting operators
experienced massive downturns in profits. As a result and in an attempt to
recover, many sportsbooks have adopted a new business model: subscription
sports betting.
What is subscription sports betting?
Subscription sports betting is when a customer pays a recurring fee in
advance for the right to make wagers on sporting events. As a result,
customers receive value for money and the industry as a whole sees lower
debt levels.
Customers are usually offered better value for money through subscription
sports betting than they would get through pay-per-wager (PPW) betting, which
is when a customer pays for each individual wager during the game. While the
spread between success and failure in PPW betting is usually very narrow,
with success being as low as 7% and failure being as high as 93%, the spread in
subscription sports betting is often much wider. This is because customers who
subscribe to a betting service assume the risk of losing money on an event they
are not prepared to lose.
Why Are Customers Facing Additional Costs?
Unlike traditional sportsbooks that operate on razor thin margins, the
blockbuster movie theaters, and the Vegas-style gambling floors, the
subscription sportsbooks have to cover the costs of operating on a daily basis.
This means they have to provide additional incentives for people to sign-up and
to keep signing-up. One way they do this is through the use of promos. A
promo is a special bonus or discount the sportsbook offers to new customers.
These can be in the form of free bets, discounted rates, or cash back offers. In
the case of the Covidien Spread Betting (NCA), you can get a free bet of up to
£100 if you register an account with the sportsbook and make a qualifying
wager within 14 days of registering.
Regulatory Changes Bring Opportunity
While the sports betting landscape was being reshaped by the pandemic, a
number of legislative changes also took place in Europe and the UK. These
changes altered the way sports betting is viewed and regulated. Here are the
most significant changes and how they impact the industry:
Self-Regulation
One of the significant changes that occurred as a result of the pandemic was
the complete overhaul of the sports betting industry. This was due to the lack
of trust that customers had in unregulated and unverified bookmakers. Bookmakers
must now verify their customers’ identities and ensure that they are licensed to
trade in certain markets. Further to this, they must also abide by
self-imposed guidelines and principles including ensuring that all their
published odds are fair and that they do not fix or manipulate the outcomes of
sporting events. Bookmakers have to ensure their own integrity and the
integrity of their odds by fully cooperating with sports governing bodies.
Regulatory Oversight
Another significant change was the increase in the regulatory oversight
within the sports betting industry. In the UK, the UK Gambling Commission was
given the power to oversee all UK gambling activities, including sports
betting. The same is true in Europe where the European Parliament passed a law
giving the European Union (EU) gambling commission the power to regulate the
entire industry. In each country, the commission must ensure that all EU
regulations are being adhered to by each bookmaker within that market.
Legalisation And Regulation
The third major change that occurred was the decriminalization of sports
betting. This change made it possible for bookmakers to offer their services to
legitimate customers who are registered and regulated by governments. Further to
this, it also opened the industry up to new market entrants. Now, anyone can
set up a platform to compete with the traditional bookmakers. However, all
these entrants must adhere to the same licensing and regulatory requirements as
the established bookmakers. The difference is they do not have to worry about
breaking any laws.
Licensing And Due Diligence
The last significant change that occurred was the increase in the
licensing and due diligence applied to the sports betting industry. In the UK,
legislation was introduced to increase the regulatory requirements and
infrastructure supporting sports betting. Further to this, each new bookmaker
must display their license on their website and ensure that all their employees
are sufficiently trained and qualified to deal with matters relating to
gambling.
As a result of these changes, the sports betting industry saw a complete
redesign. Customers can now access better odds, more competitions, and more
sports than ever before. In many instances, they can also get value for their
money. This is largely thanks to the new business models employed by the
industry. While these models are typically more expensive to set-up and
operate than the traditional bookmaker, customers see this as an acceptable
investment. Not only does it provide them with value for money, but it also
gives them the reassurance that their funds are being handled responsibly.
These business models provide customers with better security, more choice,
and more transparency than ever before. As a result, the industry has seen a
remarkable bounce-back and many bookmakers have even doubled their profits
since before the pandemic. In some instances, they have even seen a 200%
increase in profits.
With the right business model and a little bit of luck, anyone can profit
from sports betting. However, success does not come cheaply. Like any other
enterprise, you have to put in the legwork and ensure you follow the right
processes. Doing this and adhering to corporate social responsibilities is a
good way to ensure your integrity and that of your business.