The sports betting business has been booming in the World for several years. This can be seen not least from the fact that betting providers are very present in advertising or as sponsors at events. In addition to sports betting, bets can also be made on all sorts of things in the economic sector, such as falling prices or even currencies. The term betting office is more aimed at sports betting, especially since it is of interest to a much larger target group than betting in the complex economic sector. If you like to bet yourself and have the necessary industry knowledge as a bookmaker, you can start your own business with a betting office. This article would like to give a compact insight into the necessary planning, the formal requirements and the framework conditions in this industry.
Setting up a business with a betting office: What prospective business founders can find out here
- Assess opportunities : What are the general conditions?
- What requirements do founders have to meet?
- How do bookmakers actually earn money ?
- Are franchise solutions a worthwhile option?
- Which specific features have to be considered?
Check the initial situation: Framework conditions in the betting industry
The sports betting industry has seen a real growth boom in recent years. In 2014 alone, sales rose by a whopping 20% to 3.8 billion euros. 'Market leaders' are football betson the Internet. But business in local betting shops is also doing very well. The advantage of betting shops from a psychological point of view is that the thrill is more pronounced here. Sporting duels can be followed live with other bettors, which significantly strengthens the competitive character compared to online bets. In this sense, watching sports events is a highlight. If you want to open a betting shop, you should keep this thrill in mind. Guests want to feel good and enjoy various sports events with a certain level of comfort. In addition to drinks and food, large, high-resolution screens and comfortable seating are particularly important .
Professional requirements for self-employment as a bookmaker
Business start-ups in this area will work as independent bookmakers and will have professional qualifications accordinglyhave to prove. First and foremost, you should therefore know exactly how quotas are formed. These are the basis for the winnings of the bettors and also for their own winnings. The formation of economically sensible and attractive quotas for customers requires in-depth knowledge in various sports areas. The trend should be taken into account that, in addition to football, more exotic sports are also generating ever greater demand (cricket and netball are examples). Anyone who has a feel for trends will be able to design the betting portfolio offered in such a way that it appears attractive to many customers. For comparison: successful betting offices often have over 100 special bets in their program. Prospective founders are therefore well advised to analyze the competition carefully beforehand,
Bet that a good location is a key requirement for business success?
Most founders will certainly strive for a shop for their betting office as a basis for professional independence. A focus on internet betting would also be possible, but in view of the immense competition and the knowledge required, it would be very complex. A functional IT system would have to be brought into being. In addition, support would have to be offered in order to offer customers a convincing service. The price war is particularly fierce online, so customers usually receive a bonus for their first registration. This bonus would also have to be calculated precisely.
With a stationary betting office, the competitive situation can be assessed more specifically. How many betting shops are there in the vicinity? What kind of bets are not yet offered (supply gap)? A comprehensive location analysis will show which store has a sustainable business base. With an individually configurable betting office, there is also a great opportunity to effectively implement the above-mentioned thrill and adventure character. Ideally, this results in a unique selling point that makes the betting office appear particularly attractive and can simplify customer acquisition and retention.
Important formal framework conditions before opening a betting office
In general, no betting shop may be operated in the World without a valid license . In some municipalities betting shops are not welcome. Therefore, prospective start-ups should inform themselves in advance during the location analysis whether the requirements for a license are met. In order to acquire a license, the owner of a betting company must be of legal age. In general, it should be noted that the formal hurdles for opening a betting office have tended to decrease in recent years. For the mentioned license, you have to go to the trade or regulatory office. In principle, independent bookmakers should make it clear to themselves that they are legally on the safe side by arranging sports betting. It becomes critical as soon as bets are organized themselves.Section 284 of the Criminal Code provides for significant consequences for unauthorized forms of gambling.
Business registration for a betting shop
A betting shop is a commercial activity that requires registration. In addition, a permit is required because large sums of money are sometimes moved. Accordingly, high demands are placed on the professional and personal suitability of the operator of a betting office . In addition, there are regional peculiarities, possibly also with regard to certain types of betting. In this respect, prospective bookmakers in their region should inform themselves as early as possible and precisely about all possibilities and requirements. As for the required concession(License) is concerned, it is awarded centrally by the Hessian Ministry of the Interior and for Sport. 20 licenses are planned in accordance with the provisions of the State Treaty on Gambling. As a rule, the responsible authority on site then issues an official license to operate a betting office on this basis.
How does a bookmaker / betting provider actually earn?
The 'betting office' business model is basically based on the fact that a certain proportion of the stakes of all bettors are retained. Central to this are the odds that fall within the strategic scope of the betting office. Even if the bookmaker has to distribute profits, there should be a margin left with which profits can be made after deducting all costs. There are costs for personnel, energy, marketing, technology and any license fees(think, for example, of GEMA or GEZ). In theory, you can make good money quickly with your own betting office, but the reality is more complex: If the relevant specialist knowledge is missing and the odds are incorrectly set, the betting office can quickly turn into a losing business. This shows why a sound specialist knowledge as a bookmaker is essential.
Check franchise solutions for betting shops as an alternative
Opening your own betting office can involve high investment costs. If you want to cover this, you have to work out the financing in a professional business plan in order to convince external donors. But if you generally shy away from the risk and want to use a functioning network immediately, you should opt for a franchise solutionTo fall back on. In this regard, reference is made to an Internet search in order to get an idea of the various providers, the conditions and prospects. In general, it will be the case that the franchisee will participate in the profit with a contractually agreed percentage. Anyone who does not yet have the necessary specialist knowledge as a lateral entrant can acquire this in an intensive course lasting several weeks. Every prospective entrepreneur should weigh up for himself whether the positive or rather the negative factors outweigh:
Advantages of a franchise solution for a betting company:
+ Use of a strong brand (image / level of awareness)
+ immediate access to a powerful network
+ holistic preparation (especially for career changers)
+ Use of a functioning offer with attractive margins
Disadvantages of a franchise solution for a betting company:
– Restriction of entrepreneurial freedom of choice
– high franchise fees reduce your own profits
– As a rule, a certain amount of start-up capital is required
Consistently check all financing options
Anyone who decides to open their own betting office should check all financing options and / or seek external advice if necessary. Here at Selbststaendig.de, prospective founders will find a lot of useful assistance around the financing of start-up ideas. Of course, it can also make sense to join forces with several business partners or to examine options for business participation. Participation models in particular enjoy great popularity in the betting industry. As far as the specific contractual fixation is concerned, participation in total sales or gross profits come into consideration. In addition, the most advantageous legal form possible for a company to be foundedto get voted. This strategically important decision has a direct influence on the authority to act, the contingent liabilities and the possibilities of financial investments.
Betting tax: accounting features in this area
As important as the passion for betting may be, the passion for the necessary bookkeeping should not be less pronounced. Bookmakers run a business that should function as profit-oriented as possible. Professional bookkeeping is the basic requirement for this. In this way you can quickly get an overview of the business development and all costs can be controlled. Furthermore, the required annual financial statements become a quick affair if the bookkeeping with all accounts is always carefully maintained. It should not be forgotten that since July 2012 a betting tax of 5%is to be discharged. Due to the price pressure when setting odds, most bookmakers will be forced to pass the betting tax more or less directly on to customers.
Practice-oriented summary: start your own business with a betting office
- Sports betting has been experiencing a boom in the World for several years with double-digit growth rates. The industry generates sales in the billions
- A thorough training as a bookmaker is essential in order to make the odds meaningful as the heart of the profitability of a betting office
- In comparison to online betting, a betting office offers you a chance to showcase the thrill and adventure character more lively
- License requirement for this commercial activity: Bookmakers must acquire a license
- In order to find a promising store, a holistic location analysis should be carried out
- Large betting providers offer professional franchise solutions for (lateral) beginners. Every prospective entrepreneur has to weigh the advantages and disadvantages of such system solutions for himself personally