The Challenges for Sports Tech Founders: Regulations, Sourcing Sports App Developers, and More
The sports betting industry has seen remarkable growth in recent years, particularly in the United States. As of March 2022, nearly 19 million people in the US had placed a bet online. This number is only expected to grow, with analysts predicting it to reach 23 million by the end of 2023 (Lines). But that isn’t to say the sports betting sector doesn’t face a number of challenges. From regulatory burdens to infrastructure to the complexities of peer-to-peer wagering, sports app developers have their work cut out for themselves.
Join us as we navigate the future of sports betting and the unique challenges sports app developers face building fantasy and sports betting platforms.
Current Challenges in the Sports Technology Sector
Understanding the Regulatory Landscape
The regulatory environment for sports betting in the US is complex and fragmented, with laws varying from state to state. This is a considerable challenge for sports app developers, as they must navigate a patchwork of regulations to operate legally. International stakeholders, in particular, may find this landscape unfamiliar.
Founders must familiarize themselves with local laws and regulations in each state they plan to operate in. This not only ensures compliance but also helps in making strategic decisions about market entry and product offerings. Understanding the regulatory landscape is the first step toward building a successful sports betting venture.
Building the Right Infrastructure and Assembling the Right Team of Sports App Developers
Building a team that’s experienced, effective and affordable is hurdle for many start ups.
Creating the infrastructure for a compliant and functional sports betting platform isn’t easy. You need reliable sports tech, secure payment systems, and responsive customer service. As sports betting platforms scale, maintaining system reliability to handle high-traffic volumes is crucial.
Equally challenging is assembling a skilled team, often complicated by the fact that many companies are based overseas and may not grasp the challenges of apps designed for a US audience. The challenges of overseas development teams are one of the reasons why Locker Room Labs works exclusively with US-based senior engineers.
Navigating the Potential and Pitfalls of Peer-to-Peer (P2P) Wagering
Peer-to-Peer wagering, which allows bettors to make competitive wagers head-to-head, is a relatively new entry into sports betting. But, it’s currently complicated in the US thanks to the Wire Act, which prohibits money or information transmission across state lines for wagering purposes.
Despite the regulatory hurdles, with the right matchmaking, payout, and geo-fencing dynamics, P2P wagering poses an intriguing challenge for sports technology platforms.
Leveraging Machine Learning in Sports Betting
Machine learning directly applies to sports betting, offering everything from fraud detection and cybersecurity to recommendation engines and oddsmaking. These technologies can help legitimize the industry, personalize customer experiences, and optimize odds.
However, implementing these applications requires a deep understanding of both machine learning and the sports betting industry as a whole. Without the right development team, integrating machine learning into your sports betting platform is more of a risk than it’s worth.
Exploring Blockchain Applications in Sports Betting
Blockchain technology can also play a role in online sports gambling, specifically ensuring fairness and payouts. Users can verify that outcomes correspond to long-term frequencies through a distributed immutable ledger.
Smart contracts can also ensure instant payout upon game outcomes, increasing trust. Implementing these solutions requires technical expertise and a deep understanding of blockchain technology. Does your dev team make the cut?
Here at Locker Room Labs, we have a full understanding of the difficulties and advantages that blockchain technology brings to the sports industry.
Implementing Micro-betting and In-game Betting
Micro-betting, the phenomenon of betting on small, in-game events, presents an exciting opportunity for sports betting platforms. Suddenly, bets can happen on any in-game event. Users don’t have to wait for points to be scored. This is better for engagement and possible app revenues.
But, it’s technically challenging to execute due to the need for a real-time, advanced queue system to line up new bets and payouts. Despite the complexity, platforms that successfully implement micro-betting often can attract more casual customers and social betters who normally don’t bet on sports because the amount the bettor has to risk is smaller.
Ensuring Technological Stability
Just as major social networks face growing pains, new consumer-facing sports betting apps must ensure their systems are reliable and can handle large volumes of traffic. Platforms have to handle traffic in the off-season and during the playoffs.
Recent technical issues experienced by major sports betting apps highlight the importance of stability and reliability in building user trust. For sports betting companies of tomorrow, shoring up their infrastructure to exude reliability is a critical step in establishing a successful venture.
Turning Challenges into Opportunities with Experienced Sport App Developers
The sports betting industry is dynamic. It’s teeming with both opportunities and challenges.
From navigating complex regulatory environments to leveraging advanced technologies like machine learning and blockchain, sports tech founders and their teams have their work cut out for them.
But with the right sports app developers in your corner, these challenges are quickly transformed into opportunities for innovation and growth.
The future of sports betting is here. Are you ready to start playing?
