Developing a Sports Betting Platform: Buy vs Build

15 July 2019
By Russell Karp, VP Media & Entertainment

Buy-vs-Build-Sports-Betting-Platform_Clean5

The explosive growth of sports betting continues to rise following last year’s U.S. Supreme Court decision to strike down a federal ban on wagering.

While the broadcasting and sports industries buzz with excitement, how large will the betting market get? Although predictions vary, they all indicate that the increase in gross gaming revenue derived from sports betting shows no signs of slowing down, with Bank of America Merrill Lynch analyst Shaun Kelley stating his expectation for the current size of $200 million to skyrocket to $5-10 billion over the next five years.

As the sports betting market rapidly expands, many new players are jumping in on the action to reap the rewards of the biggest industry gold rush in years. Although it’s clearly a great time to enter the sector, determining the best method for developing a sports betting platform is a complex undertaking. And choosing the most appropriate option can make the difference between launching a roaring success that leads to long-term profitability or a lukewarm simmer that quickly fades away.

The Question: To Buy Or To Build

Everyone who has been involved in the development of a digital platform has faced the question of buy vs build. But what’s the right answer? Of course, it varies depending on the specific industry and the particular objectives that you want to achieve. Additionally, gambling contains unique challenges that must be carefully considered before coming to a final decision about how to create a betting platform that will gain traction in the ever-expanding marketplace. One of the major obstacles is the historical reality of sports betting in the United States, with gamblers choosing offshore sites due to a lack of local presence. Another complication is the American public’s lack of familiarity with various types of betting options, in addition to the difficulties involved in adhering to the interstate wagering regulations for online and mobile solutions.

The Options

1. Purchase a white-label solution

As big players enter the U.S., buying a white-label solution becomes a viable option. By building a branded version of an existing sports betting platform or integrating wagering into a current website, sports companies create the potential for enhanced engagement and new revenue streams.

Pros:

  • The platform is ready to use very quickly, thereby allowing for rapid entry into the market.
  • Retain the look and feel of your existing website through product customization.
  • Built-in localization provides access to markets in every country with legal gambling, including Europe, Asia, India, and Russia.

Cons:

  • Companies often still require a development team to integrate the product and support the environment successfully.
  • White-label solutions may include certain features that you don’t need, while a request for additional functionality may take a long time to be developed or may not be possible at all.
  • The product may not support the load that your solution requires once it goes live.
  • Typically, tracking analytics are not covered by purchased solutions, thereby requiring you to integrate with Google analytics, scoreboard, or other reporting systems.
  • Since a white-label solution is supported by an outside team, you may be unaware of problems in production or performance.

2. Build your own platform

Pros:

  • Complete control over the architecture and functionality of the application based on your specific needs, making it easier to estimate for the future and create a scalable system using microservices and the latest tech stack.
  • Updates and new features can be backlogged, scheduled, and implemented on a regular basis.
  • Retain control of the team that supports production, with detailed accounts of any issues that arise to help avoid similar problems in the future.

Cons:

  • Custom development requires a significant financial investment.
  • You will need to hire a project team that will include business, product, and technical resources in a tight labor market.
  • Market entry will be longer due to product development time; which can last 3-6 months for the initial release.

Regardless of which approach you choose, here are a few more essential factors to keep in mind:

  • Be certain to comprehensively analyze your needs before selecting a hosting provider to ensure a good fit with your project.
  • Hire effective customer service representatives to redirect problems to the outside or inside development team.
  • Consider your requirements for integration with any additional services or partners for data feeds, video, etc..
  • Consider dependencies on third-party services, network, and hosting providers.

Although deciding between buy vs build is a complex undertaking, the new betting market clearly warrants the necessary investment of time. By carefully developing the right platform to match your goals, you will be well-positioned to capitalize on the explosive sports gambling market. The game is definitely on, and the sky’s the limit!

By Russell Karp,

VP Media & Entertainment at DataArt


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  • happy wheels game

    16 August, 2019 06:52 am
    One of the major obstacles is the historical reality of sports betting in the United States, with gamblers choosing offshore sites due to a lack of local presence.