There are over 500 sportsbooks battling over our sports wagers. Some are old, big and trustworthy organizations like William Hill and Victor Chandler. Some are small, obscure and unreliable.
How big is the market? How many companies is there room for? Who will survive?
I have no crystal ball but I am rather sure that more than 50% of existing sportsbooks will not survive. The reason is the same as in other traditional golden markets. The first waves of exploiters make lots of mistakes and do not have enough money to stay alive. Before they have a chance to learn from their mistakes, the financiers shut down the flow of cash and the business dies.
The time when it was sufficient to show a business plan that ended with a dotcom has passed. Now the dotcom stocks are falling. Internet consultant companies and others have lost up to 90% of their value. This will have great impact on the gambling business.
Investors will think twice before backing internet Togel Singapore gambling concepts. Existing companies will have to show results soon to get more money. They will need another couple of years to show profit. Many investors do not have that patience and will prefer to close down the operation instead of permitting continued bleeding. The most vulnerable are those who started this year. Most of these companies have given a too-optimistic prognostic. When these companies are subject to closer auditing by their owners they will not live up to the expectations. The reason is often the underestimation of the difficulties in getting customers.
So what are the critical success factors for an online sportsbook? From what I have seen I suggest the following:
- Business idea
- Business idea
If you ask 100 bookmaking companies, “what is your business idea?” 90% of them will answer “to offer sports betting, what else?” It is like the president of Coca-Cola answering “to make people un-thirsty”. Going into a tough market as it has become you have to have a better answer. If not, your company will be fumbling in the dark and not reach your goals. To be able to penetrate this business you need to know exactly what you are selling and that is entertainment, nothing else.
To achieve your goals you need a strategy. Many companies in the business started by building a site and put it on the internet. They have no clear business plan and think that the internet is a market itself. Bad surprise. THE INTERNET IS NO MARKET. It is only a WAY to market. Many companies have underestimated the effort and cost it takes to get customers.
A company’s profile is more important on the internet than in traditional business. The reason for this is the short time you have to “pitch” your company and its products. If you fail in creating an aura of trust you are a dead duck.
First thing to think of is the name. A new company called wallstreet.com recently launched their site on the internet. They offer sportsbetting. While there may be some doubt about what Wall Street has to do with sportsbetting, they did invest 1 million dollars just to buy the name. This creates trust because they must have a big budget to start with. A high profile with solid owners is always a big plus.
Especially in the early days of online sportsbetting I saw many sites without information explaining who they were or where they were situated. There was no address, no phone numbers, no names. I would never send my money to such companies. Location is also an important trust factor. I prefer companies in England, Austria and Australia. They have western juridical systems and I also know that to get a license they need to give guarantees for the clients’ accounts. If you and the bookmaker disagree and it comes to trial I would prefer to do it in London than Costa Rica.
I am convinced that most companies will go under because they did not have enough money to start with. They underestimated the costs. They also use the client’s money for their business. These companies will be the first to fall. If they do not pay out promptly it probably means they are in trouble already. It is important that the betting community is warned about those. If you do not get paid send email to sites like Winneronline.com and my site, GamblersDomain.com
Technology is of course very important in doing business on the net. Not only can it make betting more fun, it can also contribute to trust. A well developed site that is easy to use and safe is a must. Bettors will not open accounts at sites that are slow or unprofessional. From a bettor’s perspective, if the bookmaker doesn’t have enough money to make a better site, they might go bankrupt any day.
It is also extremely important to be open to new technologies and to offer new products. Betting will be done from every place at any time on the globe. Betting can be offered in any form and shape. The only limits are technology and laws. The company that renews itself and constantly offers new forms of betting will be a winner.
- Recruitment and training
Like any business, human resources are very important. What makes betting special is that it is new (in most parts of the world) and growing fast. The number of bookmakers is simply too small. Good bookmakers mean good business and good possibilities to compete. There is no university in the world offering bookmaking. Many companies suffer from this. Especially the new ones, who don’t have a clue of where to get the right people. They often know nothing of betting themselves and can not judge the quality of the people they want to hire. In this business there are 13 experts by every dozen. It is also difficult to separate the good bookie from the clown. The only means is often trial and error, which can be very expensive.
Getting the right people is the first thing to think of. You can’t make bread without bakers. When the company is developed it is important to build, develop and keep the competence. How many companies have education for their bookmaking staff? I do not know but I don’t think there are many. Maybe I should start a bookmaking university.
I think the future winners are the really big companies with big wallets and good names. I am anxious to see the first big Vegas casinos enter the market. They have lots of capital and knowledge. They have experience and known names in the gambling community. I am convinced that they all have fully developed bookmaking and casino sites lying in their desk drawers. They will bring order and trust in to the business itself like they did when they maneuvered the Mafia out of Vegas.