Whether you are already operating, or a prospective iGaming operator, the technology used to power your business is of the utmost importance. Given the vital role betting technology plays in the success of an iGaming business, this article highlights the importance of operators outsourcing their betting technology in order to maximize their efficiency and profitability.
If you’re interested in learning more about the most important factors an iGaming operator should look for in a sportsbook provider, check out our article The Most Important Factors to Consider When Selecting A Sportsbook Provider here.
Let’s get back to the point of this article.
There are a number of reasons outsourcing technology is an attractive option for iGaming operators. Here are a few of the biggest reasons.
Cost & Capital Requirements
Developing betting technology is a time consuming and expensive process. The first question a prospective iGaming operator should ask is this:
When do I want to go-to-market?
Building scalable, dependable and market ready iGaming technology is a years long process. Presuming the operator in this scenario does not want to wait years to launch, realistically they need a technology partner who is able to help them accelerate their business. The opportunity cost of not launching in a specific time-frame can be hard to quantify, however a prospective operator should bear in mind that while they are developing their software, competitors will be launching in their target markets via white label betting solutions and gaining market share.
The next question that should be asked is relevant to all businesses, and for both existing and prospective operators:
Are our expenses and burn rate sustainable?
Software development is extremely expensive, particularly when working with newer technologies in order to accommodate cryptocurrency and digital assets. The competition for talented developers is fierce, and operators should expect to spend at a very minimum in the six figures each year for just their technology team if they decide to use in-house technology. Operators who outsource their technology needs are able to keep overhead to a minimum, providing them more flexibility in the case of an unexpected downturn, and the ability to allocate their resources to other parts of the business (such as customer acquisition, which will be detailed further in this article). Additionally, the dollar costs of licensing white label casino solutions, and white label sportsbook solutions are lower than costs developing in-house.
Features & Reliability
Bettors have access to more wagering options than ever before. As a result, operators cannot rely purely on marketing initiatives in order to attract and retain bettors. They must offer competitive features and have a reliable product that does not disrupt service.
Is your technology accessible for bettors?
Technology has progressed at a rapid rate for several decades now, leading to unprecedented market opportunities. People who previously were unable to access iGaming platforms due to being “unbanked” or lacking a desktop computer are now able to wager through the use of cryptocurrency and mobile devices. In order to tap into this new massive pool of bettors operators need to use technology that is mobile friendly, and able to facilitate crypto transactions. Even if an operator wishes to solely target more traditional iGaming bettors, they still need to figure out how they would handle payment processing and remain compliant with anti-money laundering laws. Technology providers such as Lion Gaming Group have white label betting technology that enable operators to reach these bettors.
Can your technology inspire confidence in your bettors?
For upstart or unlaunched casinos and sportsbooks, the lack of an operating history creates a catch-22 for acquiring customers, as their lack of reputation prevents them from gaining bettors that they need to establish a reputation. Thanks to the latest technologies, it is possible for operators to provide bettors with peace of mind even without established brand recognition.
Through the use of blockchain technology and provably fair shuffling methods, casino and sportsbook operators are able to empower their customers to independently verify the fairness of their betting technology. This technology, such as the use of smart contracts, allows bettors to retain control of digital assets, have receipts on public ledgers, independently verify that their wager was fair, and eliminate fees and delays which thereby increase profit margins for operators. Operators are able to harness these technological advancements through technology providers such as Lion Gaming Group.
The last, but certainly not least, question an operator considering building their own betting technology should as is…
Will your technology work?
The worst case scenario an operator could face is spending significant capital and time developing casino and/or sportsbook software, only to have it not work when deployed, or to struggle when onboarding more bettors. Outsourcing technology means that operators are able to work with a provider who has a proven track record of reliability.
Focus & Efficiency
One of the hard truths in life is that it is impossible to be good at everything. If an operator is developing their own casino or sportsbook software, that is focus and capital that could have been devoted to other segments of the business. Instead of spending significant capital and time building out a technology suite, operators could outsource their technology and go with a white label casino or white label sportsbook solution; freeing up their resources to then be deployed in nurturing sponsorships & brand awareness, customer acquisition and other manners that will drive revenue growth.
As a TLDR, operators should outsource their technology so that they can reduce their costs, stay up-to-date with technological advancements, and maintain focus on customer acquisition.