How to Establish Betting Shop: Key Rules and Risks
The betting activity in many regions is not subject to such a severe regulation as online casinos, but it also generates high profit. Like any sector with large income, betting operations are accompanied by certain risks. Well, how to set up a company in this industry and avoid mistakes?
Betting business is a kind of activity implying wagers on sports and entertainment events. Applying an appropriate approach to business organization, betting shops show the great cost recovery and start rapidly providing its owners with revenues. In this case, net profit is approximately 10-15% of the company’s total turnover.
Customers are offered a list of quotations on sports events, which outcomes have their own odds. They can vary in each betting shop and depend on the analytical department. Analysts should collect data, draw up a strategy, and build a sports line.
Betting activity advantages:
- possibility to act legally;
- fast pay-off period;
- wide range of betting systems;
- steady income.
The sports event audience and competition popularity are quite huge, thus any betting provider has plenty of potential clients. However, like in any other business, betting operations are full of subtle aspects.
How to establish betting business
To join this area, you can choose one of the two ways: to strike out on your own or to use a franchise. According to the Ukrainian statutory regulation, betting shops can operate under a lottery license.
To run betting practice, you require knowledge about the market, analytical services, accurate calculations, and forecasts for the current industry situation. Besides, business should comply with the norms of the law; you should have entrepreneurship skills to succeed and assemble a reliable team of professionals.
Operational concept of betting shop
To gain profitability, you should monitor sports and entertainment events as well as correct your lists called lines. All new bookies should enter the market with their own money line distinct from other companies. Money lines are developed by the analytical department or by cooperation with a major betting shop. Daily quotations and software will cost, on the average, $300-500 per month.
The sum obtained by customers at the exact wager directly depends on the common odds related to the level and value of sports events. Beginning entrepreneurs should primarily determine what type of bookmaker they need.
There are two types of betting shops:
- mass one;
- elite one.
It is better to start up with the mass type, especially if you have poor experience in gambling business and small seed funding. An elite betting shop supposes high bets and large sums of winning.
To build up your own betting business, take into account that the company should necessarily have a reserve capital. This fund is refilled when bettors lose and encashed in case of winning. The size of this capital depends on the betting volume and turnover expected by entrepreneurs.
Where to place betting shop?
Bookie location should be selected quite thoroughly based on business features and region. With bets being generally popular among male consumers (95% of the players), it is better to establish a betting shop in the place with extensive traffic to make the audience pay attention to it.
A betting firm does not obligatory require lots of space. It means that you can save money on the rent in a convenient place. Bookmakers frequently appear in entertainment venues (bowling or sports bars), allotting a certain percentage of profit to them.
Equipment and staff
You won’t need special and expensive betting equipment. All you need are a computer, a printer, a copying device, and the Internet connection. You should also acquire a special betting software. You can buy off-the-shelf programs from developers or order customized solutions (which is more expensive).
There is no point in hiring many specialists. Betting shop owner will require two employees: a cashier and a customer relations manager. The amount of workers can range from two to five people depending on the outlet area and its special features.
Potential risks and their elimination
It is almost impossible to escape all common pitfalls and failures when initiating your own business, but you can avoid or mitigate some of the risks. For example, you can take into account the characteristics of the audience interested in sports events.
Bettors are divided into professionals and newcomers. The latter often rely on emotions and intuition and lose in many cases. They provide bookmakers with the biggest income. Professionals apply elaborated strategies, place bets according to analytics and expert forecasts. These players are potentially dangerous to the venue. To work with them, you should address an experience betting provider that can define potential “spoilers”.
Betting shop owners can prevent themselves from force majeur cases using a reserve fund allowing to replenish the company’s balance and solve a negative situation with minimum losses.