How people fund their Sportsbooks

[hammertime2]

Hey guys.

Keen to get the thoughts of the community on the following and hopefully this may open an interesting discussion. I have many years of experience within the fiat gambling industry in terms of designing and managing sportsbooks but have little crypto experience. From what I can see there seems to be a split in terms of the type of operators in the market.

•   Traditional sportsbooks (usually BTC focused) that are predominantly self-funded or with private investment and offer customers the chance to bet with a wide range of the major cryptos available
•   Sportsbooks that launch their own ‘token’ which can be traded on an exchange, and used to raise initial funding for development/marketing/bankroll. I am guessing a lot of companies like to do this as their risk is limited and also gives a chance to get capital appreciation on the tokens also

Are there any legal implications for going down one route vs another (i.e. do Sportsbooks go down the token route because it enables them to trade in more jurisdictions given customers are betting with a ‘utility token’ versus a cryptocurrency coin?)

Which route do you prefer as an investor or customer?

[DarkDays]

I personally prefer privately funded sportsbooks that provide players the opportunity to invest in the bankroll. I'm not really a fan of sportsbooks or other casinos that are forced to raise funds by providing some sort of token, since they almost invariably fail to live up to the expectation of the investors. With that said, I'd like to see a sportsbook that offers investors improved odds and a few other features in exchange for part-funding.

[hammertime2]

I personally prefer privately funded sportsbooks that provide players the opportunity to invest in the bankroll. I'm not really a fan of sportsbooks or other casinos that are forced to raise funds by providing some sort of token, since they almost invariably fail to live up to the expectation of the investors. With that said, I'd like to see a sportsbook that offers investors improved odds and a few other features in exchange for part-funding.

That's the impression I get also. It seems that a lot of these token based Sportsbooks I see have all these glossy whitepapers but when I have checked to see their progress in a lot cases they have overpromised and underdelivered with their product. Not to generalise but I sense a lot of people seem to have been proverbially sold down the river in this way

[audaciousbeing]

Hey guys.

Keen to get the thoughts of the community on the following and hopefully this may open an interesting discussion. I have many years of experience within the fiat gambling industry in terms of designing and managing sportsbooks but have little crypto experience. From what I can see there seems to be a split in terms of the type of operators in the market.

•   Traditional sportsbooks (usually BTC focused) that are predominantly self-funded or with private investment and offer customers the chance to bet with a wide range of the major cryptos available
•   Sportsbooks that launch their own ‘token’ which can be traded on an exchange, and used to raise initial funding for development/marketing/bankroll. I am guessing a lot of companies like to do this as their risk is limited and also gives a chance to get capital appreciation on the tokens also

Are there any legal implications for going down one route vs another (i.e. do Sportsbooks go down the token route because it enables them to trade in more jurisdictions given customers are betting with a ‘utility token’ versus a cryptocurrency coin?)

Which route do you prefer as an investor or customer?

Depending on what an individual is looking at pulling in the crypto gambling space both options are worthy of considering and the first option at the moment is a better route to go for the following reasons:

Going the route of tokens and raising some form of ICO or IEOs as being the option would mean dealing with a lot of hassles that have to do with publicity, legality, listing on exchange sites and the support that needs to be consistent. With all of these and the accompanying cost implications, there is no guarantee that it will be a success with the general feeling in the market  private investors route on the other hand, would save the stress as the only concern would be ensuring there is returns for the investors while focus is made on publicity, credibility and penetration.

[dantee1]

Not sure of the accurate data but somewhat 89% of Sportbooks and online Casinos are privately funded. Even the giants like Bet365 was privately funded too. If you are considering to invest in this sector, the best bet is to raise capital by offering private equities to close friends and family who believes in your dream.

Private equity is always base on trust more than anything else, because you are dealing with people you know, and that knows you as well. As for token, it's always hard to pull that off. And sometimes, Casinos and Sportsbooks who choose to go through that route may have problems along the line.

[eternalgloom]

I'd personally stick to the privately funded ones, only those with proof of funding to be exact.
These ICO sportbooks are all over the place and the majority will eventually end up failing, you don't want to invest any of your time in those.

I have no idea about the legal situation of either though, they all seem to operate in some sort of legal gray area.

[leowonderful]

I'm really against tokens as a whole, though I would never touch a sportsbook that's funded through a token; I'd much rather use one that's privately funded, because a ton of tokens lose value or just straight out die every day and I prefer to be paid in BTC rather than anything else anyways. I'm not particularly familiar with the legality of either type of sportsbook as I have very little knowledge of starting a sportbook, but I imagine even sportsbooks that use tokens still block the usual countries (USA, etc) that are blocked by most crypto casinos.

[milewilda]

Privately funded sportsbook all the way. I never ever had the interest for those who do offer tokens and just like what majority said here that tokens do lose up value and mostly die in the end.This is why we cant see sportsbook that having this set-up.Lots of them tried though but the outcome is still the same.
About legal matters i dont have much idea about it.

[Ayiranorea]

There isn't much of sportsbook with their native token popular among the common cryptocurrency users. Majority of the users prefer to spend on privately funded ones with high trust. These days there is quite a low number of sportsbook available for the gamblers compared to the casinos with cryptocurrency acceptance.

[hammertime2]

Some insightful points here by all. Trust seems to be the recurring factor, I guess the landscape and the sheer number of failed ICOs contributes to this and a lack of accountability on those that are raising the capital (they can take the money and essentially never be seen again)

Whilst volatility of any cryptocurrency is a factor, a new unproven token would be more of a risk too. So certainly going down the private route seems to be the most sensible choice.

I do wonder though if there is a way in which a sportsbook could gain private funding but also enable the platforms users to buy a part of the house bankroll for a certain time period with (expected) profits paid out in a major crypto as oppose to a 'token'. This in my eyes would be a great way to use a proven crypto currency to engage the users and get them to essentially help to market the product themselves. Maybe similar to what you were saying @DarkDays

[DarkDays]

I do wonder though if there is a way in which a sportsbook could gain private funding but also enable the platforms users to buy a part of the house bankroll for a certain time period with (expected) profits paid out in a major crypto as oppose to a 'token'. This in my eyes would be a great way to use a proven crypto currency to engage the users and get them to essentially help to market the product themselves. Maybe similar to what you were saying @DarkDays

Accountability is a big issue. The great majority of casinos are run by entirely anonymous teams, which while understandable, doesn't exactly breed trust.

By at least showing that the team has sufficient funding to pull off a barebones site, we can see that the project is likely to be successful. Because of this part-funding is a win-win for both owners and investors.

[sunsilk]

If there are sportsbooks that has their own token, few of them just succeeded. I don't know all of those casino's that has their own token launched to fund themselves but I rarely see them take the main stage of crypto gambling.

I also prefer the private funding and this means more secured and won't depend to the fluctuation of their investors. Once the investors who bought those tokens and sold it at the same time, it will be tough for the operator. While in private funding, there's a certain agreement and mostly investors there are more focused in long term.

[TimeTeller]

If there are sportsbooks that has their own token, few of them just succeeded. I don't know all of those casino's that has their own token launched to fund themselves but I rarely see them take the main stage of crypto gambling.

I also prefer the private funding and this means more secured and won't depend to the fluctuation of their investors. Once the investors who bought those tokens and sold it at the same time, it will be tough for the operator. While in private funding, there's a certain agreement and mostly investors there are more focused in long term.

I have never seen a project launching their own token to be successful in the sportsbooks area.
It is always better to choose a private-funded project because they don't rely on what's gonna happen with their token or coin.
But you should research if they really have the funds to sustain their operations and the corresponding legalities on their area.

[shoreno]

If there are sportsbooks that has their own token, few of them just succeeded.

I have never seen a project launching their own token to be successful in the sportsbooks area.

There many succesful sportsbook sites but most of them dont have their own coin .  i only mostly see an exchange that has thier own coin like for example binance , binance has bnb and kuckoin , kuckoin has kcs    .

  adding those feature like that actually makes a site more attractable because we costumers think that we can value our money more if we can purchase those site owned coins instead of going for the actual cryptos  ( e.g btc , eth )

[dothebeats]

I'm kinda supporting the idea of a privately-funded sports book more than a bookie that relies their funds on their own issued tokens. It's not that the business model of the latter isn't good, it's just that I don't find it stable in the long run. It's more of a way of circumventing regulations in ICO or whatever coin offerings/token offerings are there in the form of a sports book, which IMO is kinda off. But yeah, if a sports book decides to open its doors for investors, that IMO is a good indication that they will stay and will accept public cooperation for the long term and would probably be around for quite some time.

[Viscore]

I haven't seen good sportsbook that are using tokens, most of the popular sportsbook I used in crypto are privately funded, they accept BTC and altcoins and I think that is already enough for people to have a chance to gamble and trade regardless of what country they are betting from.

Tokens valuer relies heavily on the status of the sportsbook, if there's FUD it could loss its value, that's why people would rather prefer to use a stable coin which among the coins, BTC is obviously the most popular.

[crwth]

There are many ways you could consider this because there are also two ways in how we will approach this, being an investor, or being a customer.  As a person who wants to benefit from using money, whether or not I’m a customer or an investor, I would want a return of investment on my plan. That’s the goal of the long run. In a casino or a sportsbook  Company, investors and customers have very opposite direction now.

For example, an investor wants to profit, and what does an investor invest in a casino? The bankroll. How would a bankroll increase? It’s by a player in that casino losses.

They have very conflicting goals, and I think that’s one of the critical factors that you need to consider whether you will invest or you could play and entertain yourself.

[stadus]

Actually sportsbook are mostly funded by private individuals who has a capital.

Sports book as long as it gains clients will never loss, they always earn from commission and they just have to ensure that their operating expenses is way lower than their income, but since the crypto gambling industry is growing, I believe they can grow their business as long as they compete with the most popular ones.

There's no permanent position in the space, one that is currently below can grow, if a simple dice game could generate million of dollars, how much more a sports book where it was the most popular type of gambling in the world, and I think the biggest as well.

[ralle14]

As a gambler I prefer the traditional sportsbook they're used by a lot of gamblers and many have been providing their service for several years. Those ICO sportsbook that i've seen are offering similar services and sometimes less when compared to the traditional sportsbook i've used. I'll only switch to these new sportsbook if all traditional sportsbook starts offering KYC or if they have far better markets, odds and features than the current traditional bitcoin bookies.

[swogerino]

I prefer traditional privately funded sportbooks and the reason is simple,they look more serious this way compared to some other sportbook who only accept tokens.If a sportbook offers both the traditional way of a real coin and token based betting should be the solution to each road anyone want to follow.