As a gambling industry journalist, we are pitched countless innovative new ideas and business plans as companies aim for start-up success in the sector.
According to Altenar COO Dinos Stranomitis, it is the fragmentation of the gambling market due to legal restrictions, along with the successful emergence of numerous specialist turnkey providers, that has sparked such strong interest among new entrepreneurs.
However, he noted that only 10% of start-ups will survive, and just 1% will go on to achieve lasting success in the industry. Success, said Stranomitis, is not just a technical exercise—it also requires proper planning and the right “feeling or instinct of the decision-maker.”
With that in mind, here is his checklist for start-up success:
The Market
With the latest legal restrictions, you need to know which market suits your license. You should understand your niche and be prepared to face tough and sometimes unfair competition. Additionally—and perhaps more importantly—you should know your market pricing and be ready to fight for an edge over your competitors.
A key consideration is: “How much will you pay to get customers to register with you?” If this isn’t cheaper—or at least the same—as your competition, you’ll lose the battle sooner or later. In other words, you need to identify the pool from which you're acquiring your customers.
The Software
Break it down into three elements:
- The software related to your market, which is essentially the Player Account Management (PAM) system. It provides key functions such as wallet and financial transactions, as well as integration with products and other providers, including payments. It’s hard to find a PAM that fits all markets well, due to legal restrictions and the customization required to operate in specific regions. It may make more sense to build this element in-house if your budget allows.
- Products such as sportsbook, casino, poker, racing, etc. In most cases, you simply need to outsource these, with your primary concern being whether their functionality is on par with—or better than—what your competitors offer, while staying within budget. Realistically, it doesn’t make sense to build all these products in-house. And for anyone claiming otherwise—why doesn’t bet365 build casino games in-house? I’d argue that everyone would outsource their sportsbook if they could find a better one at a lower cost than building it internally.
- Front-end tools like CMS, CRM, payment gateways, etc.—all essential components with a smaller but strategic scope that can give you a competitive edge in the market if selected wisely and aligned with your budget.
The Operations
This is arguably the most critical area of your business plan. It’s essential to outsource parts of your operations to stay within budget. However, if you're more comfortable handling certain operations in-house, go ahead and do it.
From a practical standpoint, it makes far more sense to manage key player-facing areas—such as marketing acquisition, retention, and customer service—in-house.
As your business grows, more operations should gradually move in-house to optimize costs. The path to success typically begins with outsourcing and evolves into internal management—unless outsourcing continues to deliver better value for your company.
The Commitment
Make sure you're fully committed to the plan. If success is your only option, then you'll achieve it—simply because you’ll make the necessary adjustments along the way. There’s no such thing as a “perfect plan,” but great adjustments can put you among the top 1% of success stories.
Here at Altenar, we’re happy to discuss your full plan before becoming a part of your success. It may not just be a technical discussion between a technology provider and an operator—we might find the “great adjustment” to your “perfect plan.”
According to Altenar COO Dinos Stranomitis, it is the fragmentation of the gambling market due to legal restrictions—combined with the successful emergence of so many specialist turnkey providers—that has sparked such an appetite for new entrepreneurs to get involved.
Written by SBC News
