Believe it or not, it is possible to have a profitable sports betting business. Just like any other business, however, you need skill, perseverance, capital and maybe even a little luck. But make no mistake, it is possible to run your sports betting as a viable, long-lasting business.
BUT…if you are going to enter this world, then you have to realize that just as the vast majority of businesses fail in the first year, so too do sports bettors. Thus, unless you are blessed with the Midas touch of incredible luck, you need to bring a high level of discipline and professionalism to your sports betting business.
1. The First Order of Business–Why are you doing this?
95% of you are going to answer the question with something similar to this:
I’m tired of the rat race in my regular job. I want to be independent and to control my own destiny. I love sports and I’m good with numbers, so I figured I’ll give sports betting a try.
I’m going to take it slow at first and I don’t plan on quitting my job. Hell, I’m not trying to get rich quick. I just want to give this a try and if I’m any good, I’ll scale up accordingly.
Please. Just stop. Stop right now.
This is a disastrous mindset that will separate you from your hard-earned money and make even more dependent on the job you hate.
Get real. Get professional. Get clear.
Why are you entering the sports betting business?
There are only three possible answers, you can only choose one. There is no other way.
- You are entering the sports betting business as your primary source of support.
- You are entering as your secondary source of support. [Yes, you can modify this later, but for now any future modification is utterly and completely premature and therefore irrelevant.]
- You are entering because it’s exciting and you love sports. In which case you aren’t really entering the business. You’re here for the excitement. Not that there’s anything wrong with that, but just don’t fool yourself.
If you enter the business with the plan that it will be your primary source of support you need to be realistic. And you’ll need a large bankroll. And it wouldn’t hurt if you kept your living expenses at a minimum.
If you’re entering with a goal of a secondary income source, then you have more leeway–obviously–and you won’t need near the bankroll. Just don’t make the mistake of trying to achieve primary income gains when you are locked in a secondary income paradigm. If you forget this simple rule, you will over bet and in time it is almost a guarantee you’ll go bust.
2. The Second Order of Business–Create a Business Plan.
At this stage you get down to business. How much capital do you have and what’s the necessary return on investment that you need in order to meet your goals. Don’t overlook this step and “just wing it.”
What’s your “product”? In other words, what sport or sports are you going to bet?
Who are your suppliers, i.e. bookmakers? What due diligence have you performed on their reputation and legitimacy?
What is your management philosophy, i.e. Money Management Philosophy? Probably the most important question on the list.
What skill-set do you bring to the sports betting business that sets you apart from the competition? If you don’t have a clear and concise answer to this question, then why do you think you’ll succeed?
Do you have reserves in place for bad-luck runs or rogue sportsbooks that might abscond with your cash?
Where is your Fail-Line, beyond which your bankroll is so hopelessly compromised that you have no reasonable expectation to meet your income goals? There is a mathematical answer to this question and you need to know it upfront and commit to stopping should the line be crossed.
How have you addressed the legal and tax issues facing bettors? You can’t ignore this. And you must factor in the tax ramifications as you assess your income goals.
These are just a few of the issues that must be rigorously addressed before attempting a sports betting business. Don’t get fooled by the hype: The odds are against you! You need to take every precaution and every measure in order to be in the top 5-10% of all sports bettors–because this is where you’ll need to be in order to stay in this business for the long haul.
Now I realize this is quite daunting, but most independent businesses require the same level of success for long-term profitability.
“Wait a second BITFU. Are you telling me that in all the businesses I see out there, almost 90% of them are losing money and about to fail? Surely this cannot be correct!”
No, what I’m saying is that you must avoid Survivor Bias, therefore, you must also factor in the businesses you do not see as well. These are the businesses that have already failed. Once you factor in all the businesses–and not just the surviving businesses–you’ll quickly see that the bar is higher than you thought. You need to be in the top 10% of all sports bettors to make it in this game. When you take this higher standard into account you’ll better appreciate the need to be on your game and that you must pay attention to details you might otherwise ignore. Failure to do this will mean that you’re just another Muppet ready to give your money away to the true Professionals who leave no stone unturned.
In conclusion, you can turn your sports betting passion into a viable, long-term business. But you must be clear on your goals, as well as your assets and liabilities. You must have a solid business plan that forces you to address the details that will come back to bite you in the event you look the other way. Finally, you need to have a betting methodology that sets you apart from the competition, a sound money management philosophy and contingency plans in place for the inevitable runs of bad luck. Sounds easy doesn’t it?
OK, fine it won’t be easy. But it could be incredibly rewarding and this just might be worth the risk.