Building modern sportsbook platforms: High-level architecture guide

​​Did you know that the iGaming industry is currently valued at approximately $97 billion and is projected to reach around $125.6 billion by 2027?

Sports betting is expected to grow at a CAGR of 10.3%, reaching approximately $182.12 billion by 2030. Within this sector, online sports betting is gaining significant traction and is projected to grow at a CAGR of 14.2%, reaching approximately $116.7 billion by 2032.

The surge in online sports betting platforms is reflected in user adoption trends. In 2022, there were 127.8 million web and mobile users, a number expected to rise to 156.9 million by 2025. (source: iGamingExpress)

What does this mean for sports betting platforms?

This explosive growth has created a strong demand for high-performance, scalable, and user-friendly Sportsbook platforms. As the industry continues to expand, developing a robust software architecture is critical to ensure seamless user experiences, operational efficiency and long-term scalability.

In this article, we explain the key principles of a scalable Sportsbook architecture, recommend the best technology stack and help you choose the right approach. With Nagarro’s extensive experience in software consulting and iGaming, we’ve helped clients build future-proof Sportsbook platforms — and here are the insights.

Understanding sportsbook application

What is sportsbook application

It’s an online platform that allows players to place bets on various sports events, such as the Football World Cup, Hockey World Cup, and more.

Some of the key features include:

• Live streaming – Watch games in real-time on the platform.
• Real-time odds & game updates – Get up-to-the-minute odds and live game statistics.
• Bet placement & payout – Choose from multiple betting types, including single bets, combination bets (combi bets), and various market options. The platform also takes care of bet settlement and payout after bet placement.
• Risk management – Ensure fair play and manage betting limits to mitigate risks.
• Payments & transactions – Secure and seamless payment processing for deposits and withdrawals.
• Compliance & regulation – Adherence to legal and regulatory requirements of different markets.

These features create an engaging and secure betting experience for users while ensuring reliability and compliance for operators.

High-level architecture overview

The diagram below illustrates the high-level architecture of the Sportsbook application:

 Fig 1: High-level architecture of the Sportsbook application

Note: Here, we have used AWS cloud and its services as an example, which can be replaced with any other preferred hyper scaler and equivalent services.

Key architectural components

Frontend (User Experience Layer)

Key considerations

• High performance, responsive design, and accessibility: Ensure the application is fast, user-friendly, and accessible to all users. 
• Real-time updates: Integrate technologies like Web Sockets, SSE (Server-Side Events), Diffusion, or similar for real-time updates on the frontend. 
• Static content management: If feasible, store static content in a CMS and serve it through a CDN (Content Delivery Network) for efficient delivery.

Backend (API Layer)

Key considerations

• Choose an appropriate architectural style (Monolith vs. Microservices): 
  If there is a well-established DevOps setup and budget is not a constraint, a microservices architecture is recommended for improved scalability and future readiness. However, if DevOps is not properly set up, it’s better to go with a Monolith or Modular Monolith, as managing microservices without strong DevOps can quickly become a burden. Ultimately, there is no definitive right or wrong choice in architecture, it's always about trade-offs.
• If you opt for microservices, select the right message broker: 
  Choosing a suitable message broker depends on your specific needs and constraints.

Key backend services

• User & session management: Handles authentication and authorization processes for users. 
• Bet management service: Responsible for handling bets and calculating payouts. 
• Live odds and market management: Provides real-time updates on odds and market conditions. 
• Risk and fraud management: Ensures fair play by monitoring fraudulent activities. 
• Responsible gaming: Supports features for managing self-exclusions, deposit limits, and other responsible gaming features.

Data layer (Storage/Database/Cache)

Key Considerations

• Real time features like live odds, in-play markets and bet placement need fast access therefore using in-memory stores like Redis would make more sense.
• Use appropriate data storage for hot (live bets, in play event data, etc.), warm (bet history, player account information, etc.) and cold (usually refers to archived data like old events data, historical bet slips, etc.) tier data.
• Ensure that databases support sharding and replication to handle high player concurrency, especially during peak events like world cups or tournaments.
• Ensure high availability through multi availability zones or region set up, automated failover, and scheduled backups.
• For high throughput services (e.g. Bet placement service), you may consider eventual consistency with idempotent writes.
• Ensure compliance with gaming authorities (UKGC, MGA, etc.) around data retention and traceability.
• For analytical data needs, it’s wise to set up data pipelines to feed real time and historical data to data lakes & warehouses as a part of UDS (Unified Data System).

Key Storages: Player DB, Sportsbook transaction DB, Backoffice/Configuration DB, Feeds Store for live feeds/odds/markets, Object Storage for static content and images, Caching layer.

Architectural characteristics

When designing a Sportsbook platform there are multiple architectural characteristics to consider. The following are essential in today’s world:

Scalability

Best practices for Scalability in Sportsbook platforms.

Enable auto-scaling

• Use native cloud auto-scaling features to dynamically handle traffic fluctuations. 
• Prefer horizontal scaling (adding more instances) over vertical scaling (increasing instance size) for better resilience and flexibility. 
• If needed, implement event-driven scaling using KEDA (Kubernetes Event-Driven Autoscaler), a CNCF-approved solution.

Use load balancers & traffic management

• Use a load balancer in a distributed architecture as it distributes traffic efficiently and prevents bottlenecks.
• Consider implementing API Gateway (optional, based on budget) for rate limiting, request routing, and centralized authentication.

Plan for peak load events

• Implement pre-planned scaling strategies as major sports events can drastically increase traffic.
• Conduct weekly or bi-weekly load testing to simulate peak traffic and ensure the platform can handle demand effectively.

Security

Best practices for secure Sportsbook development.

Layered security approach

• Ensure security is enforced at every layer, starting from the initial request.
• Implement DDoS protection and IP-based filtering at the CDN or firewall level using tools like Cloudflare, AWS Shield, or Web Application Firewalls (WAF).

Role Based Access Control (RBAC)

• Implement RBAC to ensure users and services only have the permissions they need.
• Follow the principle of least privilege (PoLP) to minimize security risks.

Data encryption

• Encrypt data in transit using TLS 1.2+ (HTTPS, SSL/TLS certificates).
• Encrypt data at rest using AES256 or similar industry standards.

API Security

• Secure APIs using an API Gateway or reverse proxy to enable authentication, rate limiting, and threat mitigation.
• Use OAuth 2.0, JWT, or API keys for secure authentication.

Availability

Best practices for high availability in Sportsbook platforms.

Implement distributed architecture

• Deploy services across multiple regions and availability zones to prevent single points of failure.
• Use load balancers and replicated services to maintain uptime.

Use event sourcing for resiliency

• Implement event sourcing to track system state changes, ensuring that failures do not result in data loss or inconsistencies.
• This also helps in replaying events to recover from outages.

Eliminate bottlenecks in scaling

• Identify and scale components independently to avoid system-wide slowdowns. 
• Databases are often the weakest link—use read replicas, sharding, and caching (e.g., Redis, Memcached) to handle peak loads efficiently.

Store backups in different regions

• Regularly back up critical data and store copies in multiple regions for redundancy and quick recovery.
• Use automated backup solutions (AWS S3 Glacier, Google Cloud Storage, Azure Backup, etc.).

Disaster Recovery (DR) strategy

• Have a clear DR plan, including failover mechanisms, secondary deployments, and automated recovery workflows.
• Test failover procedures regularly to ensure minimal downtime.

Implement API rate limiting

• Use rate limiting to protect APIs from abuse and unexpected traffic spikes.
• It helps prevent DDoS attacks and server overloads while ensuring fair usage of resources.

Performance

Just like security, performance is a crucial implicit characteristic that needs continuous attention. To ensure optimal system performance, the following best practices should be implemented:

Implement caching strategies

• Use Redis or Memcached for frequent database queries and session storage.
• Implement application-level caching (e.g., HTTP response caching, query caching).

Leverage a CDN (Content Delivery Network)

• Use CDN like Cloudflare, AWS CloudFront, or Akamai to cache static content and reduce latency.
• Distribute content geographically to serve users from the nearest edge location.

Optimize database performance

• Use read-replicas, indexing, and query optimization to reduce database load.
• Consider sharding for large-scale applications.

Asynchronous processing & queuing

• Offload heavy tasks (e.g., report generation, notifications) to asynchronous workers.
• Use message queues (Kafka, RabbitMQ, SQS) for handling background jobs efficiently.

Efficient API design

• Implement pagination to reduce unnecessary data transfer.
• Use gzip compression and HTTP/2 for optimized network performance. Keep an eye on HTTP/3 adoption too once it’s fully supported and matured.
• Use GraphQL for optimized and client-controlled data fetching wherever applicable for precise, faster queries e.g. Fetch only user bet history with specific fields instead of entire transaction data. 
• Explore if you could make use of gRPC instead of REST for faster internal microservice communications.  

Load testing & performance monitoring

• Regularly perform load and stress testing using JMeter (or similar tools).
• Continuously monitor performance metrics with New Relic, Dynatrace, Datadog, or Prometheus.

Adopt CNCF (Cloud Native Computing Foundation) approved standards and solutions to build an architecture that ensures portability, interoperability, and cloud vendor neutrality.

Backoffice

The Backoffice is a vital tool for Sportsbook operators, enabling them to manage bets, risks, compliance, payments, and reporting.

It serves as the central administration panel, allowing traders, risk managers, and support teams to monitor and control betting operations effectively.

The key Backoffice features include:

• Managing bets, transactions, and settlements 
• Manually adjusting live odds for high-risk events
• Detecting fraud and suspicious betting patterns
• Enforcing responsible gaming and compliance measures
• Generating real-time reports and analytics

While the Backoffice is typically accessible only to internal users, its architecture still requires careful consideration. Many of the best architectural practices applied to the Sportsbook platform also apply here. However, since it is not publicly accessible and handles a lower load, there is more flexibility in its design choices.

Essential third-party integrations

Sports data providers

• The platform must integrate with sports data providers for live streaming, odds, and market updates.
• Examples: Sportradar, Genius Sports, Betradar, BetConstruct, Opta, etc.

Payment gateways

• To facilitate payments and wallet transactions, integration with third-party payment providers is necessary.
• Examples: PayPal, Paysafe (Skrill, Neteller), Trustly, etc.

Fraud detection services

• To enhance identity protection and fraud prevention, the platform should connect with leading fraud detection providers.
• Examples: SEON, Group-IB, ThreatMetrix, etc.

KYC & compliance

• Identity verification is essential for KYC compliance.
• Examples: Jumio, Onfido, IDnow, etc.

Authorization services

• Most cloud vendors offer built-in authentication and authorization services. Additionally, cloud-neutral solutions can be considered.
• Example: Okta (a well-known cloud-agnostic provider)

Web analytics (Optional but recommended)

• Integrating analytics services helps monitor user interactions and platform performance.
• Examples: Google Analytics, Adobe Analytics, etc.

In the next part of this article, we will explore each layer of the Sportsbook architecture to recommend the best technology stack and assist you in choosing the right approach. Stay tuned for insights that will redefine the game!