The lines between sports and gambling have blurred, with many high-profile events, such as the Super Bowl, now incorporating betting odds into their broadcasts. And while sports betting has been around for centuries, the technological advancements of the 21st century have made it much more accessible to the general public.
Established companies, such as DraftKings and FanDuel, have created new markets for fans to indulge their passion for sports and to create more engaging experiences for both players and viewers.
The revenue that sports betting generates can be substantial. According to a 2018 survey from the American Gaming Association (AGA), 17% of U.S. adults reported that they participated in some form of sports betting in the previous year.
However, just because sports betting is now popular, it does not mean that you should rush into the market. There are numerous factors to consider before investing in a sports betting franchise.
Risks For Investors
First and foremost, it is important to note the risks that are associated with investing in a sports betting startup. As with any new venture, there are risks associated with venturing into the world of sports betting. You will need to examine the various risks that you are willing to take on.
The degree of risk that you are willing to assume will be determined by your risk tolerance. Everyone is different and has a different tolerance for risk. For instance, some might prefer to allocate a larger portion of their investment to reduce the risk of losing their entire capital. Alternatively, those with a lower tolerance for risk might want to consider allocating a smaller portion of their investment and increasing the chances of attaining some financial returns.
Global Reach
One of the significant benefits of a sports betting startup is that they often operate on a global scale. Due to online gambling regulations, licensing requirements and other legal hurdles, it is often difficult for U.S.-based businesses to operate abroad. This is where leveraging the expertise of other countries’ legal and regulatory teams comes in handy. While some sportsbooks, such as Westgate’s World Series of Poker, have opted to shut down their U.S. operations due to legal restrictions, many others have sidestepped the issue by opening offices overseas.
The presence of a physical sportsbook or casino in multiple jurisdictions, such as the U.S., Malta and the UK, gives users the confidence that their personal information will be secure and that they can continue playing, regardless of where they are in the world. This level of global presence can be attractive to international investors who want to get their feet wet in the U.S. sports betting market, but aren’t yet prepared to commit to a U.S.-based business.
Technology
As the world of sports shifting towards an online focus, technology has evolved to keep up with the needs of fans and participants. Some of the more established sports betting firms, such as Westgate and Bet365, have developed sophisticated platforms that allow for seamless online gambling from any device with an internet connection.
These platforms, which employ cutting-edge security measures and have 24/7 customer support, are made possible by innovative technologies that power the industry. And while newer companies, such as Unikey and WinnerBets, have emerged to provide more affordable options for fans, those with deep pockets can enjoy the same perks.
Market Size
Like any new industry, the world of sports betting is still in its early stages and is therefore characterized by a lack of established competitors and a small number of customers. While the betting public is still finding its way around the often-complicated legal and regulatory issues surrounding online sports betting, the fact that there are no clear competitors allows for ample room for growth.
One of the major factors that makes up for the lack of established competitors is the fact that there are a limited number of established partners, such as the Nevada Athletic Commission and the New Jersey State Lottery, that allow for online sports betting in the first place. This is because the legalities surrounding online sports betting have not yet been established in most countries. As more and more countries continue to embrace online gambling, the number of partners willing to offer online betting options will increase, creating more competition in an already robust market.
On the other hand, the small market size ensures that there is plenty of room for new firms to emerge and thrive. The emergence of new services and innovations, such as the recently launched Next Sport, will further push the industry forward.
Operations
Operations, or the way a business is structured, can be considered among the four major factors that determine a company’s success. The degree of operations that you are willing to commit to will be based on your risk tolerance. It is important to note that the risk associated with poor operations increases as the stakes rise. This is why it is a good idea to initially play small, losing bets in order to establish a safe operating history before playing big games or bets with high financial rewards.
Those who want to bet big can play with the big dogs, provided that they are willing to assume the risk of losing. However, if security is a major concern, it might be best to stay away from the high-stakes games for now and instead enjoy the benefits of smaller games.
The Law
The law is another major consideration when it comes to investing in a sports betting startup. First and foremost, you need to make sure that the country or countries that you reside in, whether nationally or legally, have legalized sports betting. Even when this is the case, there are still restrictions that you need to be aware of.
For example, it is still considered unethical and generally illegal for sportsbooks, casinos and other online gambling operators to promote betting on certain sports or events. This is due primarily to the fact that athletes, coaches and teams typically benefit most from betting on their favorite sports, while gamblers typically lose money on all sports except for the ones that they are knowledgeable about. Despite these restrictions, the lines between sports and gambling have blurred and the law continues to evolve with the times.
The Money Making Opportunity
The revenue that a sports betting startup can generate, as well as the profit that they can turn into after paying out winners and taking into consideration expenses, is often substantial. According to a 2018 survey from the American Gaming Association (AGA), 17% of U.S. adults reported that they participated in some form of sports betting in the previous year.
Those who participate in sports betting are often those who enjoy the thrill of betting on their favorite team. However, even diehard fans can have an opportunity to participate in making money from betting on sports when they use online sportsbooks and casinos. With the right strategy and using software that calculates the winning lines and odds, even those who are new to the industry can achieve financial benefits from betting on sports.
The revenue that sports betting generates can be substantial. According to a 2018 survey from the American Gaming Association (AGA), 17% of U.S. adults reported that they participated in some form of sports betting in the previous year.
However, just because sports betting is now popular, it does not mean that you should rush into the market. There are numerous factors to consider before investing in a sports betting franchise.