For many sports fans, the real thrill and dopamine surge comes from placing bets. This surge in fan engagement is the major factor in the growth of the sports betting industry with a current market size of $114.68 billion. To cater to the growing enthusiasm of sports bettors many online sportsbook platforms have been there for decades. But what exactly is a sportsbook and how does it function behind the scenes?
This guide will take you through the world of sportsbooks, their core functions, and the importance of successful sportsbook software providers. So, whether you are an aspiring sportsbook operator or someone interested in knowing it at a deeper level, stick with us till the end.
What is a sportsbook?
A sportsbook is the place where a player wagers money on the outcome of a sporting event. It can be an online sports betting platform and even a brick-and-mortar building that accepts bets. An individual sports bookie and a sportsbook platform are simply the same and the main purpose that they serve is accepting bets.
At the very heart of exciting sportsbook betting, there lies a powerfully built foundation that keeps it running smoothly. Let’s understand the core functions of starting a sportsbook that create a smooth experience for the operator and the players placing bets on sporting events.
1. Setting odds and lines
Sportsbook creates odds and lines on the outcomes of specific events. These odds reflect the probability of an event occurring. The sports bookie represents the odds in three different ways, money line, fraction odds, and decimal odds. Do know that all these three representations convey the same probability of a certain event.
By adjusting these odds, a sportsbook attracts new players, manages risks, and ensures profits.
2. Managing risks with PAM
Managing risks with PAM is a core function of any sportsbook platform. It goes beyond just creating accounts of players. It verifies the users, monitors and mitigates any sort of suspicious activity, sets limits on how much a user can deposit or withdraw, and there’s much more that a player’s account management system can do.
Sportsbook maintains a safe and secure environment for themselves as well as the users by implementing this approach.
3. Offering diverse bets
Sportsbooks offer a variety of betting options to the players like, money lines, futures, parleys, point spreads, and props. This variety helps the sportsbook attract more fans and keeps the betting experience exciting. Offering diverse bets also gives a competitive advantage to the sportsbook platform as it positions itself as a one-stop destination for all kinds of sports bets.
4. Payouts and settlements
Whenever a player wins a bet they get the wagered amount back along with the winning amount. The sportsbook team takes care of this entire payout process. Sportsbooks have efficient systems that accurately calculate and process winning payouts.
Whenever players lose bets the money they wagered becomes a part of the sportsbook revenue.
What are the income sources of a sportsbook platform?
Ever wondered how sportsbooks make a profit? Let’s take a closer look at the different ways these platforms generate income.
1. Hold percentage
This is the main source of revenue for any sportsbook platform. Hold percentage is the percentage of money wagered that a casino or betting platform keeps.
For instance, there’s a betting event going on a sportsbook platform for the match between Australia and South Africa.
If a bettor wagers a total of $100 on a platform with $60 in Australia and the rest $40 in South Africa then irrespective of the outcome of the game the sportsbook will keep a certain portion of the total payout.
2. Subscription fees
They also generate revenue by putting certain features of their sportsbook platform on subscription. Some sportsbook platforms might offer access to exclusive bets, the privilege of wagering more stakes, and bonus rewards.
3. Balancing action
To make sure that the sportsbook operators always stay in profit, they play with the odds. Sportsbook wants to attract income on both sides of the events. For instance, if a team has a high probability of winning the game the content feed providers will lower the odds for that team and will increase the odds for the underdogs. This will make bettors wager on the underdogs even if statistically they have a low probability of winning.
What are the main requirements to start a sportsbook platform?
The online sports betting industry is booming at a faster growth rate. Many people aspire to own a sportsbook platform. If you are someone who is fascinated by the thought of starting a sportsbook platform then this segment is for you. Here’s how it works:
1. Immerse in the legalities
Licensing plays a pivotal role in starting your sportsbook platform. You need to make sure that sportsbook platforms are legal in your jurisdiction. If you illegally run a sportsbook platform, you will have to face some major consequences like, your website can be taken down, or if you are unlucky enough you might even get behind bars.
So, do take official licensing from the respective governing body to run a sports betting platform.
2. Business planning and funding
Having a business plan is the first and foremost thing to consider before you spend any penny. This plan should include a well-defined budget that divides funds for crucial areas like licensing fees, software subscriptions (if using pre-built software), and customer acquisition and retention strategies.
This way you will have a proper plan ahead of you and will be able to streamline your online sportsbook platform without many hiccups.
3. Build your platform
Once all the planning and plotting for running your online sportsbook platform is done, hop on to turning the planning into practice. Now you have two options: either you build your platform from scratch or you go for a white label sportsbook platform. If you don’t want to spend time coding everything from scratch then simply look for a sportsbook software provider.
You can either go for a white-label software solution or you can go for a turnkey sportsbook solution benefit. Decide which one works best according to your budget or whether or not you want to build a sportsbook platform from scratch.
1. Create a payment gateway
A safe and secure payment gateway is really crucial for the smooth transitioning of payments from the operator account to the player account. There should be all kinds of payment methods incorporated into a sportsbook platform like Credit cards, debit cards, crypto, and e-wallets. This will ensure that you don’t miss out on even a small chunk of the potential players.
That’s it. This is all it takes to start a sportsbook platform and anyone enthusiastic about it can start it right away. To make it more interesting you can integrate sportsbook platforms with casinos as this will help you generate income from multiple sources and give your audience more gaming options.
Wrapping Up…
Launching your sportsbook platform can be an exciting ride and can bring in great profits if you take one step at a time. This guide equips you with all the information that you need about sportsbooks and how they work.
All you need to do is proper planning, understand the legal restrictions, have enough budget, and build a user-friendly website to keep your foot in the industry. Be sure that with the ever-growing popularity of sports betting, sports betting platforms are already there in abundance in the market. That’s why initially, establishing a foothold might seem like a war but with time you will definitely get there.
