The sportsbook industry is at the forefront of the betting sector, capturing both emerging opportunities and long-term potential for operators. Sports betting dates back to some of the earliest recorded athletic competitions, but the concept of organized sportsbooks evolved much later, eventually transitioning from in-person betting shops to online and in-play wagering.
Starting a sportsbook business is a complex process that requires careful planning and execution. It's a highly regulated industry with its own risks and challenges, but also significant potential for huge profitability.
Here you will find key factors to consider for building and operating a successful sportsbook business.
Market Research and Understanding the Industry
The sports betting market covers all aspects of betting types where players place bets on sports events, organized in-person at betshops or online through websites or mobile apps. Sportsbooks have access to a wide variety of sports types including football, basketball, tennis, hockey, horse racing, cricket and more providing odds on different outcomes so bettors can bet on their predictions.
Market Research
With the evolution of sports betting, live betting has emerged as the leading segment. According to Grand View Research, the global sports betting market was estimated at USD 100.9 billion in 2024 and continues to grow rapidly. Based on betting type, in-play betting emerged as the leading segment in the sports betting market in 2024.
Global Market Overview
During the forecast period 2025-2030 per Grand View Research, Europe holds the largest revenue share of around 48% in 2024, and is continuously evolving based on set regulations in some countries. Football, tennis and basketball are the main bet-on sports in the region. Within Europe, the UK is one of the most active markets, with football, horse racing, and greyhound racing being key sports.
While Europe remains the largest market in the betting industry, North America is expanding at a remarkable pace. This growth is driven by significant regulatory reforms, especially in the U.S., where state-by-state legalization is ongoing. In Canada, the market has also matured significantly since single-event sports betting was legalized in 2021.
Asia Pacific is growing fast because of the active usage of the internet and accessibility to online platforms despite regulatory challenges. In the region, cricket, football, basketball and esports are key sports consumed according to several sources. China has very tight regulatory challenges because of illegal gambling, leaving the state-run Sports Lottery as the only legal option and closing the door to all private operators. Meanwhile, Singapore and Hong Kong have chosen to legalize and control sports betting through government-mandated monopolies. In Singapore, the sole legal betting operator is Singapore Pools, which is state-owned. In Hong Kong, the only legal provider is the Hong Kong Jockey Club, but unlike Singapore Pools, it is not state-owned and operates as an independent, non-profit organization. Australia’s betting market with its regulatory environment prioritizes consumer protection and encourages responsible gambling. Mobile betting is particularly famous within the nation with emphasis on user experience, mobile betting options and more.
Dominant Sports
Generally, Football holds the dominating sport title in the sports betting market due to the humongous international fan base and the on-going presence in domestic and international tournaments, generating high-volume of in-play betting, or pre-match fixed wagering. The global sports-betting market was expected to generate about USD 100.9 billion in 2024, with football accounting for the largest share of sports gross-win in most regions per Grand View Research. Additionally, eSports has been a turning point in recent years with the rise of competitive gaming and online streaming platforms such as Twitch among young adults playing games such as League of Legends, Dota 2 and others. Global eSports market size was estimated at USD 2.13 billion in 2024 and is projected to reach USD 7.46 billion by 2030, growing at a CAGR of 23.1% from 2025 to 2030.
The United States is quickly expanding as legalisation and mobile wagering increase adoption. Estimates differ by methodology (industry revenue vs. market-size models), but authoritative reporting shows the U.S. sports-betting industry posted approximately USD 13.7 billion in revenue in 2024 (American Gaming Association), while market-size studies model the U.S. opportunity somewhat higher depending on inclusion of ancillary spend. For U.S. product mix, domestic leagues (NFL, NBA, MLB) dominate bettor interest.
Europe remains the world’s largest and most mature sports-betting market, accounting for an estimated approximately 48% of global sports-betting revenue in 2024 (per Grand View Research). However, “maturity” in this context increasingly means regulatory tightening rather than explosive growth. The UK, a cornerstone market, is navigating major reforms under its review of the Gambling Act 2005 - including affordability checks and restrictions on advertising. Similarly, Germany’s re-regulated market under the 2021 Interstate Treaty on Gambling imposes stricter controls on in-play betting. For operators, Europe therefore remains a high-cost, high-compliance environment. Football clearly dominates in the region, with tennis and basketball among the next most prominent sports.
The Asia-Pacific (APAC) region, projected to be the fastest-growing market (with a CAGR of 12.3% from 2025-2030) per Grand View Research, is the most diverse and success here depends on local specialization. Key growth segments include Cricket, which continues to expand rapidly, driven almost entirely by the Indian Premier League (IPL). Horse Racing also holds a massive, established market share in key betting cultures like Australia and Japan. These sports, combined with the immense popularity of Esports (led by China and South Korea) and Basketball (in the Philippines and China), make the APAC landscape uniquely complex and full of high-growth opportunities.
Football is the heart of betting culture in Latin America, particularly in Brazil, Argentina, and Colombia. Brazil’s Law 14,790/2023 is transforming the market, with a 12% GGR tax and R$30 million licensing fee, attracting major operators. Other sports like Basketball and Boxing see localized popularity.
Across Africa, Football dominates, accounting for over 70% of betting activity in countries like Nigeria, Kenya, and South Africa according to Geopoll survey reports. These are mobile-first, low-stake, high-volume markets with huge youth engagement. Secondary interests include Rugby, Cricket, and Athletics, depending on national sports culture.
Understanding the Industry of Sportsbook Business
The online segment of the sports betting market is expected to record the fastest CAGR of nearly 12.9% from 2025 to 2030 (Grand View Research). Sportsbooks offer flexible access, real-time betting and engaging features such as live streaming, in-play wagering etc. The offline segment accounts for a significant revenue share in the sports betting industry in 2024, particularly in regions with a mature gambling infrastructure such as Europe and Australia. Traditional betting shops, casinos, and racetracks continue to attract a consistent flow of customers, particularly those who prefer in-person interactions, cash transactions, or a social atmosphere. Furthermore, regulatory restrictions in some jurisdictions and the deep cultural trust associated with long-standing physical brands help maintain its relevance. In 2025, operators are now strategically integrating this segment into a true omnichannel model, using their physical footprint not just for in-person wagers, but as a critical, high-trust funnel to acquire customers, build brand legitimacy, and drive adoption of their online platforms.
The structural shift from pre-match wagering to in-play betting is well underway. In many mature markets, in-play has become a majority product, transforming the industry from traditional bookmaking into something resembling a high-frequency trading environment. This shift is enabled by technology: low-latency data feeds, which allow operators to offer “micro-bets” (for example, bets on the next pitch, next point or next play), algorithmic pricing models that ingest real-time event data, value thousands of concurrent markets and set odds instantly, and automated risk-management systems that profile bettors and manage liability on the fly.
As a result, sportsbooks now may operate less like traditional bookmakers and more like data-tech firms, with teams of quants, data scientists and algorithm engineers complementing the classic odds-maker role.
For leaders in this industry:
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Secure high-quality real-time data from rights-holders and build a tech stack that can process it with low latency.
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Design algorithmic pricing engines capable of handling thousands of live markets simultaneously.
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Implement risk control and betting-liability systems that run automatically, enabling scale and speed beyond manual processes.
Before diving into building your business, keep yourself informed about the ins and outs of the industry. This requires granular research to profile your target bettors, coupled with a comprehensive competitive analysis. Deconstruct competitors' operations by analyzing their product mix, operational models, and the core sportsbook solutions they use. This process is essential to identify strategic weaknesses and market gaps you can capitalize on.
Marketing and Customer Acquisition
The utilization of technology for fan engagement and revenue generation in the global sports market has been crucial, as social media is being consumed by sportsbooks, sports leagues and teams, taking into consideration the usage of online platforms hence live streaming, augmented reality and digital media campaigns have shaped the user experience. Nowadays, it’s critical to have a marketing strategy if you want to flourish in the sportsbook business.
Ad rules for legal sportsbooks may depend on where you operate, and based on national and state regulations restrictions apply like ban on ads, content etc. In some cases you should include the terms and promote responsible gaming to the users. And to effectively promote responsible gaming, the operators must be very clear on the rules, odds, provide self-exclusion tools, and prevent underage gambling.
Without your efficient and effective marketing strategy, your business is unlikely to succeed because the market is very competitive and operators invest heavily in promotions, build brand awareness, and high-performance digital marketing campaigns. Strategy with multiple channels is recommended to use such as Search Engine Optimization and Content Marketing, Pay-Per-Click campaigns, Social Media Marketing with promotional bonuses encouraging new players to make their first deposit and place their first bet which is a popular way to engage with customers in the US.
Competing in a Crowded Market
As the sportsbook betting market is very competitive, a clear strategic business plan should be developed to succeed in the industry. Major industry players focus on mainstream sports such as football and in order to have a loyal customer base you could focus on the particular sports which have the potential to rapidly grow and dominate the market within upcoming years. The market is primarily driven by the young male demographic, but women also make up a growing portion of bettors, and the brand and products should be developed to appeal to both genders.
With the rise of technological advancements, you must focus on offering a faster, intuitive, reliable platform with sportsbook data feed and be ready to change with the technology.
Financial Considerations and Profitability
The sportsbook business is a high-risk, high-reward enterprise requiring a clear understanding of financial realities. Initial investment typically covers licensing fees, which can exceed $100,000 in some jurisdictions, platform setup, marketing budget, and capital reserves for player winnings. A minimum startup capital of $25,000 to $75,000 is often cited for a White Label setup, but a serious, legally compliant, and competitive online sportsbook requires a minimum total startup investment of $100,000 to $250,000 for the first year of operation. However, obtaining a direct license in a premium jurisdiction like the M.G.A. (Malta) or UKGC (UK) is a far more capital-intensive endeavor, with total first-year costs often ranging from $150,000 to over $500,000. This budget must cover not only the substantial application and licensing fees but also the non-negotiable setup and vendor costs for third-party KYC/AML verification services, payment gateway integration for high-risk processing, and a dedicated internal compliance framework, all in addition to the core platform, capital reserves, and marketing budgets.
Profitability is the cornerstone of any sportsbook and hinges on the operator’s ability to manage risk and optimize the “hold” - the margin between the total amount wagered by customers and the winnings paid out. The Gross Gaming Revenue (GGR), calculated as handle minus payouts, represents the sportsbook’s revenue, while the Hold (%) measures efficiency, typically ranging from 5% to 8% depending on sport and product. Operators increase profitability by combining careful odds-setting, effective risk management, and customer acquisition strategies, while controlling operational costs such as marketing, platform fees, payment processing, and staff salaries. In mature, competitive markets, profitability is also driven by in-play betting and high-frequency micro-markets, which generate higher bet volumes and allow for tighter margins, making the sportsbook not just a betting platform but a data-driven trading operation.
Challenges and Risks
In countries, where online sports betting is restricted, customers rely on illegal or unregulated platforms which is a threat to your business health. Also, failure to comply with strict regulations such as KYC (Know Your Customer) and AML (Anti-Money Laundering) can lead to licence revocations. Holding your own license can give you freedom to enter new markets independently. Another risk is operational failure such as technical failures of platform downtime, odds feed. Market competition risk is also high as Tier-1 operators with huge recognition are blocking the way, so focusing on providing superior service with an emerging sports betting product would be a wise choice.
Commercially viable online sportsbooks require official, low-latency data feeds, and it's of high importance to choose the right sports data provider who can help with enriching sportsbook solutions with real time data feeds and accurately calculated odds feed, otherwise the risk is at stake in losing financial assets resulting in reputational losses.
Legal and Regulatory Requirements
As the sports betting industry is significantly growing, so are the legal and regulatory requirements, falling in operator’s top list for consideration. Starting a sports betting business could be difficult depending on where you reside and on which market you target, if you want to have a clean slate.
Understanding the Global Regulatory Landscape
The operations of the businesses need to comply with jurisdictional regulations and thorough research is a must to ensure compliance with local and national laws. Failure to adhere to these rules is not a minor risk as it carries severe financial and legal impacts. These consequences can range from crippling, multi-million dollar fines for KYC/AML and responsible gaming violations to the ultimate, business-ending penalty of license revocation. With the example of the U.S, in 2018 the Supreme Court struck down the federal ban on sports betting, allowing each state to decide whether to legalize sportsbooks. Since then, states have taken very different approaches, some have enacted active legislation, while others, such as Utah and Texas, continue to prohibit sports betting altogether. Some states are restricted to in-person, retail-only wagering, meanwhile others permit online and mobile betting, or both like Arizona, Arkansas. In Europe, Germany has transitioned into stricter regulations with the Interstate Treaty on Gambling being in effect in 2021 and the UK has a fully regulated market with strict player protection laws.
Choosing a Key Licensing Jurisdiction in Sportsbook Business
Before getting into the business, you should have answers to these questions on what the current laws for sports betting are in the market, what licenses are required and choose the licensing jurisdiction wisely.
Several jurisdictions that are cornerstone for iGaming licensing are Malta Gaming Authority - MGA which offers access to many European markets and gives significant credibility, and enforces high standards of player protection. For the Malta Gaming Authority (MGA), the process of licensing may take from 3 to 6 months on average to complete. Another popular one is the Curaçao Gaming Control Board, which is non-EU focused and particularly popular with startups and global operators due to its favourable tax regime (2% net corporate income tax for Ezone companies).
Other jurisdictions include the Isle of Man (Gambling Supervision Commission - GSC), which offers a significant financial advantage with a 0% corporate tax rate on gaming profits; instead, it levies a low Gambling Duty based on Gross Gaming Yield, ranging from just 0.1% to 1.5%. The United Kingdom (UK Gambling Commission - UKGC) is the strictest regulatory body in the world. A UKGC license is mandatory for all planning to offer services to residents of the United Kingdom. Operators must comply with significant tax obligations, including the Remote Gaming Duty, which is currently set at 21% of their Gross Gaming Yield (GGY). As this rate can be subject to change, it is essential to verify the latest figures from official UK government sources.
Navigating through legal and regulatory requirements, businesses should have an understanding of international, national, state jurisdictions with its costs, implications and adherence to strict regimen of compliance.
Building the Operational Framework
After understanding the legal landscape, the core operational components of the sportsbook should be planned and designed with technology, financial systems, product offerings - with its main product being odds feed, as well as risk management system and human resources to run day-to-day business. For operators choosing between a Turnkey and White Label model choosing a B2B software provider is one of the most important operational decisions. Offers can be of a wide range of sports and markets, integrated risk management tools, PAM system payment solutions and more.
The industry is now exclusively digital-first and mobile-centric. The "app" is no longer just an access point; it is a sophisticated ecosystem built around the Player Account Management (PAM) system, which acts as the central nervous system for all operations. While 5G and ever-present connectivity provide the necessary low-latency infrastructure, the key differentiator is no longer access but personalization. Leading operators now leverage AI and Machine Learning not just for user-friendly interfaces, but for complex retention modeling, churn reduction, and predictive personalization. This allows them to offer hyper-specific prop bets and promotions based on an individual's past behavior, moving far beyond simple gamification to create a high-retention, individualized wagering experience.
Betting markets and their associated odds is the sportsbook’s driving product and for most of the operators source odds from specialist B2B providers via API, though top-tier operators may also have in-house trading teams. Having reliable odds to provide your customers will raise your sportsbook’s recognition and your consumers will bet frequently on your platform, and for that reason your odds must be competitive, otherwise you’d easily lose your clientele. Also the accurate, expert backed odds will increase the profitability of your business, enhance customer engagement.
With providing odds, risk management systems should be integrated as well as they are the defense line of the business entirely. Sportsbook solution providers should offer a risk management system that will monitor and track fraud attempts built on liability management, stake acceptance, player profiling.
Designing a User-Friendly Platform
Designing a winning platform for your sports betting is considered to be a competitive differentiator to directly influence customer acquisition, engagement and retention. You may offer competitive odds to your users, but if your platform is slow, unattractive enough to not stay for long, difficult enough to understand with too many unstructured visuals, and placements, they will turn to your competitor’s side.
In the modern, in-play dominated market, milliseconds matter. A platform must function like a high-frequency trading application. Odds must be presented in formats users expect (decimal, fractional, American) and be clearly labeled. Any ambiguity in the betslip or market presentation is a direct cause of lost conversions.
Inclusive and accessible design is essential, as bettors have varied abilities and are using a wide range of devices. Offering dark/light themes, ensuring color contrast meets WCAG standards, and providing tool-tips for new bettors are all part of a go-to UX establishment. A platform is also never "done", it requires relentless analytics and optimization. This means A/B testing everything from the betslip layout to deposit buttons, and constantly monitoring metrics like time-to-first-bet, user drop-off points, and churn rate.
Ultimately, a platform’s success hinges on trust and security. You are handling real money. This requires a transparent wallet interface, secure authentication (like 2FA), and clear display of licensing. More importantly, it demands an ethical design. A trustworthy platform avoids the "dark patterns" highlighted in OSF reviews, embedding Responsible Gambling controls (like deposit limits and self-exclusion) directly into the core, accessible experience.
As now a great majority of sports betting takes place on mobile devices, sometimes user experience is designed for the small screen of a smartphone then adapted for larger screens like tablets and desktops. To enhance user experience, various support channels or chatbots are used to better the experience.
Conclusion
Starting a sportsbook in a highly competitive market is both challenging and rewarding. Successful ones require thorough market research, a deep understanding of betting practices and trends, and compliance with legal and regulatory requirements. Operators should carefully select licensing jurisdictions, secure reliable sportsbook solutions and integrate accurate sportsbook data feed to remain competitive in an ever-growing industry. Financial planning is an essential part as startup costs are high, and long-term profitability relies on offering competitive odds, effective risk management and strong customer engagement. With the right strategies, data feeds solutions and compliance in place, sportsbook businesses can be turned into profitable ventures with long-term growth potential.
FAQ
What is a sportsbook API?
A sportsbook API connects your platform to real time odds, markets, and betting data. It is basically the bridge between your sportsbook platform and external data providers.
How to choose a sports betting software provider?
Before choosing the sports betting software provider, you should consider the one that matches with your market’s needs in the terms of sports types, land-based or in-play betting, if it will cover only the live or pre-match, or both events by having competitive odds, technical support etc.
What payment methods should a sportsbook support?
A sportsbook should offer a mix of popular, secure options including debit/credit cards, e-wallets (like PayPal, Skrill, Neteller, Apple Pay/Google Pay), bank transfers (ACH, SEPA, Trustly), prepaid methods like Paysafecard, and cryptocurrencies such as Bitcoin or USDT. The exact mix depends on the region, but supporting fast, trusted payment methods is key to a smooth user experience.
What are the limits on sports betting advertising?
Advertising should not:
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Encourage behavior which is criminally or socially irresponsible,
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Portray gaming as a means of resolving problems,
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Suggest that gaming is an alternative to employment, etc.