There are different types of sports betting business models and each has its own advantages and disadvantages. These are explained below:
Rake and Fee Sports Betting Model
The rake and fee business model is the most common type of sports betting business model. It’s based on a cut taken by the house, which ranges anywhere between 9% and 26% of the total amount wagered. This percentage is determined by the specific state where you’re operating.
In order to make up for this revenue loss, most sports betting sites use some sort of advertising model. They may run ads on TV, run banner ads on the web, or sponsor major sporting events.
Match Betting Business Model
The match betting business model is when a sportsbook takes your money and then gives you back your winnings if your team wins or covers your loss if the team you backed loses.
Instead, they are taking your money and giving you back your winnings if you win. If the bettors team loses, he loses his entire stake in the bet. In this type of business model, sportsbooks actually have to take risks to win back the money of the bettors.