Comparing new bookmakers / small operators to cat food might be unfair on cat food makers, by the end of this blog you will understand why we use this comparison.
NEVER EATEN CAT FOOD
Let’s start by coming clean, i’ve never owned a cat or eaten such food. However, according to a TV advert, all cat food tastes the same. And, we believe this statement also applies to many new Bookmakers / small operators, and we are going to tell you why.
NOT ALL BOOKMAKERS ARE CREATED EQUAL
Size does matter, and being the worlds biggest online bookmaker allows Bet365 to stand out from the crowd. How are they different you may ask, the answer is they don’t contract third-party odds. Need proof of that?, just compare in-play odds to smaller operators.
However, this blog is about the struggles for new bookmakers / small operators, because it’s they who are have identity issues.
BETRADAR EFFECT - NEW BOOKMAKERS SMALL OPERATORS
I think we can agree, under normal circumstances small operators can’t possibly compete with bigger brands. The reason, they don’t have enough human resources available. Furthermore, they don’t have marketing dollars, or the same quality of software. To get around this issue, the smaller players can contract third-party data services. And, by that we mean they can have fixtures, odds, betting programs and results delivered into their system.
The best known provider of such services is a company called Betradar. They can offer bookmakers a full program, and that includes ‘’in-play’’ betting. The only thing is the extreme cost has Betradar are known to charge anything from 15-150K per month. In fact, the pricing module is usually based on the bookmakers turnover or ’hold’’!
THE PROBLEM FOR NEW BOOKMAKERS / SMALL OPERATORS
The issue for New bookmakers / small operators using such a system is obvious, they will have similar odds to the competition. That makes standing out from the crowd almost impossible, and that’s why we use the comparison with cat food.
To be fair, the Betradar system allows operators to adjust the odds key (%), so there is a bit of flexibility. However, betting with low margins makes a small operator more vulnerable to professional gamblers.
The other option for the bookmaker is to over ride the Betradar feed and make a few stand-out odds (take an opinion) of there own. To do that the compiler would need to know what they are doing, or subscribe to a professional service like ours.
And, even then it will be a struggle to grow numbers without a niche or clever marketing.
There are some excellent marketing people out there, but the problem is not many understand bookmaking. Furthermore, the best marketers come at a big cost, and they work with big budgets. The other issue is it’s not easy to promote a Sports-book which is unknown, and the challenge is to build a brand of trust.
One of the issues facing gaming operators is restrictions on advertising. For example, unless they have a territory license, Google won’t accept adwords. And, even if they did, the cost of PPC (pay-per-click) would be around $60 (without any sign-up guarantee).
We should also mention that Facebook-ads and other social media platforms won’t accept bookmakers promoting outside their licensing territory. That means UK betting companies are limited to promoting in the UK, and so on - It simply doesn’t work!
While some wise guys will open Facebook groups and try to avoid being detected, it won’t last long. That also applies to e-mail campaigns, since that form of marketing is actually breaking many laws. In fact, bookmakers have had their license withdrawn or faced a massive fine for such.
Most smaller operations will try Affiliate programs, but they are not trusted anymore. Afterall, their has been a spate of reneging, and massive affiliate websites have seen their business crumble overnight. Ask yourself this, would you trust such a partnership with an unknown bookmaker?
The options for smaller operators are often limited to paying something upfront. Fixed banner advertising can usually be purchased, but it doesn’t work if posts are not including odds and mentions. Forced pop-ups will kill a site, because they are illegal and have a negative SEO impact on both sites (link + own).
BONUS OFFER FROM NEW BOOKMAKERS / SMALL OPERATORS
You might have heard the saying, if the price is right the consumer will find you. In the sports-betting/gaming world, that means either having outstanding odds or offering customers a big incentive (bonus).
By doing the first (best odds), a bookmaker will get easily picked off. People ‘’arbing’’ will take the guaranteed money, and professional punters will steal the juice. That’s why most bookmakers often resort to first time deposit bonuses, albeit regulations are changing and that will become increasingly difficult.
In any case, new companies offering bonus will likely be abused, and such customers are of little use.
SHOP / NICHE - LOCATION PLAY
If you have found a new country (tell me please) that will allow betting, it’s a licence to print money. However, that’s unlikely to happen, and if it does you won’t be getting exclusivity. In fact, chances are you will have extreme entry costs, and it all comes with no guarantee.
Companies that have done this badly wrong in the past include William Hill. The British high street bookmaker lost fortunes trying to get into the Italian market, and they soon left with a massive loss.
Online sport books could search for betting shop/agent partners, and that used to work with limited spend. However, it’s becoming more difficult to find suitable partners, because the good ones are already taken.
OUR ADVICE to NEW BOOKMAKERS / SMALL OPERATORS
We don’t want to give it all away, because we are advising a couple of young gaming companies and they pay us a lot for the service!
However, we will say that a new entrant should localise, and build a first class support system. Looking after customers creates loyalty, and in this age of choice that’s clearly important.
Plenty of payment options and quick settlements are another aspect for creating all important loyalty. And, any modern-day bookmaker needs suitable verticals (casino/games etc).
We should also mention that the mobile version of a bookmakers site is ultra important, and so is the speed of loading. We haven’t mentioned other digital marketing (SEO) aspects, since it’s only interesting to the operator. And, nor have we gone in to what we are doing for others has that’s all NDA.
The object of this blog is to explain why new bookmakers / small operators will struggle to get a foothold. We are also aiming to explain why Betradar bookies will be offering the same.
You can also hit our tutorial on Warning - avoid these bookmakers from this link!