The United States of America is the 3rd largest country in the world. It’s considered an extremely competitive market place when it comes to sports betting. What does this mean for you, the entrepreneur who wants to take the plunge and start a sports betting business? Let’s dive into how you can make this dream a reality.
Find Your Niche
As the founder of a new business, you’ll have to make a decision regarding which sport to focus on and which one to avoid. The first decision you need to make is whether you’ll specialize in football or baseball. The former is immensely popular around the world, with the latter being the #2 most popular sport in the United States. You’re going to want to pick a sport that you think you have a chance at succeeding in, but also one that you’re passionate about.
Know The Laws
In the United States, you have to obey the law. This means that you can bet on sports, but you can’t get too far ahead of the game or you’ll be in legal trouble. The law in place to prevent this is the Illegal Sports Wagering Amendment. It was amended in 2018 and is now known as the UIGEA. This amendment makes it illegal for individuals to engage in “high-stakes” sports wagering, which is defined as follows:
- a wagering activity that violates any federal law or any state law that is applicable to the jurisdiction where the activity takes place;
- an activity where the minimum investment is greater than $1,000; or
- an activity where the maximum win is greater than the maximum loss, over a three-month period.
As a new business owner, you’ll have to familiarize yourself with the UIGEA and how it pertains to your chosen sport. Another law that you have to be aware of is the Professional and Amateur Sports Protection Act (PASPA). Enacted in 1992, this law prohibits state and local governments from enacting laws that would restrict sports betting. However, it doesn’t protect you as an individual entrepreneur, so be careful.
Find A Location
If your sports betting business is going to reach its full potential, it needs to be located in a convenient place for your clients to come and visit. Ideally, you’ll want to find a city that has a thriving nightlife, offering players the ability to lose themselves in the action while having fun. Cities like Miami, Las Vegas, and New York City fit the bill.
Get Financing
Even if you have the best idea and the perfect location, you’ll still need money to make it all happen. This is where your access to loans comes in. There are numerous government-backed loan programs that can help you get started. What you need to do is prepare a loan application that includes all the required documentation. Make sure you meet all the criteria, as these loans can be quite competitively priced.
Create A Plan
Once you have your financing in place, it’s time to put together a plan. You’re going to have an opportunity to meet with your chosen lender to go over the details regarding the loan, making sure you understand everything beforehand. You’ll also need to put together a business plan, outlining the kind of customer you expect to acquire, how you intend to make money, and the overall plan for expanding your business.
Creating a plan will help you get a clear picture of what you’re expecting. While it can be a daunting task to plan a business, it will be worth it in the end. You can also use this plan to communicate your expectations to your employees, ensuring everyone is on the same page.
Hire Experts
Now that you have everything in place, it’s time to hire some experts. To start off, you’ll need a bookmaker. There are many highly-rated companies that specialize in sports betting, so feel free to look into these options. You’ll also need an accountant, because you’re going to have to file annual income taxes regardless of whether you make a profit or incur a loss. Furthermore, you’ll need to consider setting up a legal entity which can be used as your “base” while operating in the United States. This way, you’ll be able to use the tax exemption that comes with being a small business.
Depending on your expertise, you may also want to consider getting involved with programming, marketing, or graphic design. If you’re looking to create an online platform for your sports betting business, you may want to hire an experienced developer to help you build the site.
In conclusion, if you’re looking to start a sports betting business in the United States, you have a variety of options available to you. Be sure to familiarize yourself with the existing laws in place as well as the details regarding how the individual sports wagering amendment applies to you.