How to Start a Sports Prop Firm: A Complete Beginner’s Guide

Are you passionate about sports and interested in building a business that combines analytics, trading, and betting? Start a sports prop firm could be your perfect opportunity. With the rise of proprietary trading models and data-driven sports wagering, launching your own sports prop firm is more achievable than ever—if you know how to get started.                              

In this guide by PropFirmsTech, we’ll break down exactly what you need to know to launch your own sports prop firm, even if you're a beginner.

What Is a Sports Prop Firm?

A sports prop firm operates similarly to a proprietary trading firm, but instead of trading financial markets, it focuses on sports prop bets—wagers on specific outcomes within a game (e.g., total yards by a quarterback, number of goals by a player).

The firm funds traders or bettors who demonstrate consistent success and risk management. In return, the firm earns a share of the profits. Think of it as a hedge fund model—but for sports betting.

Step-by-Step Guide to Starting a Sports Prop Firm

1. Understand the Business Model

Before you invest time or money, understand how a sports prop firm works:

You provide capital to skilled sports traders/bettors

They place data-backed prop bets under your firm’s guidelines

Profits are split, typically 70–80% in favor of the trader

Your firm earns from volume, consistency, and scaling success

Make sure you’re familiar with sports betting markets, especially prop bets across NFL, NBA, soccer, and more.

2. Research Legal & Regulatory Requirements

Regulations vary by region. Here’s what you’ll need to consider:

Licensing: Depending on your jurisdiction, you may need a gambling operator’s license

Legal structure: Set up an LLC or relevant business entity

Compliance: Partner with legal advisors to stay updated on sports betting laws

Pro tip: Countries like the UK, Malta, and certain U.S. states are more friendly to this business model.

3. Build or License a Trading Platform

Your traders will need a secure, fast platform to place prop bets. You have two options:

Custom software: Fully tailored but expensive

White-label solutions: Faster to launch and often integrated with sportsbooks and APIs

Look for features like:

Real-time performance dashboards

Trade evaluation metrics

Risk controls and limits

PropFirmsTech partners with multiple tech vendors offering white-label platforms for sports prop trading.

4. Create Evaluation Challenges

Before funding traders, test their skills. Create evaluation challenges with rules such as:

Profit targets (e.g., 10% in 30 days)

Drawdown limits (e.g., 5% max daily loss)

Approved leagues and markets

Traders who pass your evaluation get funded accounts—just like in Forex prop firms.

5. Set Risk Management Rules

Prop betting can be volatile. Set clear guidelines:

Daily and weekly loss limits

Maximum stake per bet

Approved prop markets only (e.g., no low-liquidity bets)

Use automation to prevent rule violations and protect your capital.

6. Build a Community of Funded Bettors

The success of your sports prop firm depends on your traders. Market your firm via:

Discord or Telegram groups

YouTube and TikTok content

Sports analytics forums

Offer leaderboards, monthly contests, and incentives to grow loyalty.

7. Track and Scale Your Firm

Use analytics to track:

Trader win/loss ratios

Return on investment (ROI)

Risk-adjusted returns

Reward high performers with larger accounts or better profit splits.

Final Thoughts

Launching a sports prop firm is a bold but exciting opportunity in the growing world of data-driven betting. With the right legal framework, technology, risk controls, and trader acquisition strategy, you can create a scalable, modern prop business.

PropFirmsTech is here to help founders, entrepreneurs, and sports investors bring this vision to life. Whether you need help with tech platforms or evaluation systems, we provide the tools and expertise to support your journey.