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 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:
1. Business idea
2. Strategy
3. Profile
4. Financing
5. Technology
6. Recruitment
1. 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.
2. Strategy
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.
3. Profile
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.
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