Welcome to the wonderful world of online casinos.
Online casino gaming is a popular form of entertainment, and if you’re thinking about starting your own business in the gambling industry, you’ve come to the right place. The following steps will help make your journey as smooth as possible.
Is it legal to start an online casino?
Yes, it is legal. However, you need to check with your state and local law authorities before starting an online gambling business.
How much money do I need to open an online gambling business?
How much is it worth to have an online casino? I cannot know the answer. The online casino development phase is typically more of a spending exercise than the maintenance phase of a project. The most money-exhausting items are marketing and promotion which account for nearly half of the overall costs.
Still, let’s see if we can make an estimate:
Gambling License Fee
A license fee can be anything between $35,000 to $100,000, depending on the country. One of the most popular legislations is based in Malta, where you can get a gambling license for €25,000. Setting up an online casino in Malta is known to be the easiest and most profitable.
Marketing
Since gambling is one of the most competitive industries, marketing can cost a lot of money if you want to promote your business properly. The best marketing strategy for an online casino platform is to make your website as appealing as possible. This means no popups, bright banners or annoying sounds. In most cases, you can expect a marketing budget of around 40% of the expected yearly revenue from the project.
In most cases, this figure would be between $250k and $400k.
Technical development/ setup fees
Depending on the game providers, these expenses may vary significantly. Some developers charge upfront while others prefer monthly fees paid in advance. The average fee for gambling software is around 5% of the projected annual turnover from the business. So if your site is expected to get 1 million visitors per month, you will need between $25k and $40k each month.
Developing a casino online site is another expense you will need to take into account. It will set you back anything from $1k up to $10k, depending on your requirements.
Salary and maintenance
The salary and maintenance for an online casino business would be the price of the license and the marketing. Once you get your license, you, as the online casino owner, can advertise and market your business while you maintain it.
Grand total
Salary and maintenance: $100,000 a year
Marketing: $400,000 a year
Technical development/ setup fees: $25,500 (1 million visitors at 5% of projected annual turnover)
Developing a website: $10,000 one time fee
Do online casinos make money?
Online casinos make money by offering games of chance for online gamblers, usually in the form of slot machines and table games. Slot machines are a very popular option for online casinos because these can be offered on a continual basis with limited interaction from the player. A table game such as poker is more time consuming and takes more interaction from the player.
House edge is the amount of money that is taken by the casino from a player’s bet. It is the difference between the payout given by the casino to the player and what it kept for itself. This depends on what you are playing, but as an example, blackjack has a house edge of 1%. The House Edge can be reduced or increased as desired – such as doubling or quadrupling for progressive slots.
How do I start my own online casino business?
You’re probably thinking about starting your own business in this industry. If so, you’ve come to the right place. The following steps will help make your journey as smooth as possible and improve your chances of online casino success.
Explore the global online casino market
The first thing you need to do before getting involved in the industry is exploring the global marketplace. This is so that you can find out whether or not there are any online casino platforms that have a passport for your country. Research the fees that these marketplaces charge for visitors and operators, then create a shortlist of potential partners.
Another important decision to make is what type of gambling activity will satisfy your market’s demand. If you’re unclear on what kinds of games are out there, click on this link to see some more information about the different types of casino games.
If your country’s legislation made online gambling legal, then perhaps going for a local audience could be more profitable. By looking into the preferences of your country’s players, you can create a website that caters to their needs.
Just to give you an idea, the online casino market is expected to be worth over $266 billion by 2022. This means there are huge opportunities available for those who are willing to take them.
“Be it online gambling or offline betting games, casino seems to be on the rise without the trend to fall, especially online casino. To start with, there are new categories of gambling emerging as technology develops apart from the original mobile gambling and live betting. Crypto Gambling, Virtual Reality Gambling, just to name a few. It’s a fair point to say that in the near future, the way to play casino is going to expand. This can possibly result in more gamers stepping into this arena as each way of gambling can attract its targets. Meanwhile, with the massive use of mobile phone and blanket advertising, users are exposed to everything, including gambling,” says Ciki Liu, marketing specialist at iBoysoft.
Establish the right corporate structure
Owning an online casino business means you’ll need to make sure your corporate culture is up to standard. This means ensuring that your employees are engaged, have a sense of purpose, are productive, and are innovative. It’s important for your employees to feel safe within the company because without this feeling it can be hard to create great work. There are also many benefits that come with establishing a good corporate culture, including greater chances of success.
An online casino is a huge upfront expense. But, it’s not all. You’ll need to pay as you go for licensing, maintenance, and other overhead costs like salaries. The right culture ensures that you’re maintaining a sustainable business.
Acquire a gaming license
Online casino businesses have a lot of upfront costs, but they also have a lot of expenses in the long term. The most important investment you can make for your company is acquiring a license. Your license not only adds legitimacy to your business, but also will give you access to the global marketplace. Acquiring the right license will also save you money in the long term because you’ll be able to attract more visitors, which gives you more chances to make money from them.
Depending on your business model, you may need to get different types of licenses from various organizations such as the United Kingdom Gambling Commission, Curacao eGaming, or Malta Gaming Authority. These licenses are good for one year only and must be renewed every year. If it’s not renewed, then your online casino will no longer officially operate.
Make sure that there is someone inside the company who has the necessary expertise in obtaining these licenses so that you don’t have to hire external people. However, if you do decide to hire an external person for this job, make sure it’s somebody with experience in getting casino licensing through respected authorities like UKGC or Curaçao eGaming.
Register as a legal entity
It’s vital to register your online casino company as a legal entity because it provides you with an extra layer of protection. Legal entities are treated differently than sole proprietorships, so if your business goes bankrupt, the assets of the legal entity would be protected and not belong to bankruptcy. If you don’t register as a legal entity, then all your assets will be lost in the event of bankruptcy.
Choose white label casino system providers
The software provider should be compatible with your business. You need to make sure that the software provider has a long-standing reputation and high levels of expertise in the online casino industry. The software also needs to be compatible with different types of devices such as smartphones, tablets, and computers.
Otherwise, you may opt for an alternative software provider which is still reputable but does not have as much experience as Playtech or NetEnt in the online casino industry.
Selecting the gambling content for your online casino site
Firstly, your gambling content should be of good quality. This might sound like an obvious recommendation but oftentimes people forget about the importance of the quality of the gambling content and just concentrate on acquiring as many visitors as possible.
Secondly, it is necessary to understand that different jurisdictions have different laws and regulations. One needs to keep these things in mind while selecting their gambling content because it can lead to legal complications if one is unaware of the jurisdiction they are operating in.
Thirdly, one must select gambling content that best suits their company’s mission statement. If one has a mission statement such as attracting only those who gamble responsibly then it would be illogical to offer gambling content such as online poker or roulette which involves high stakes gambles.
Fourthly, a company’s online casino content should be diverse enough so as to attract a large number of visitors. For example, if one only offers slots then the chances are that the gamblers might not find anything interesting for them and may move towards other websites which offer more variety i.e., games from different software providers as well as live dealer gaming etc.
Finally, look into what’s popular now and what’s going to be popular in the near future. This ensures that you attract as many visitors as possible.
For instance, nowadays one of the most popular gambling games is live dealer baccarat which has a large number of gamblers who keep playing this game day and night. That is why it makes sense for an online casino project to provide live dealer baccarat even if it doesn’t have a large amount of traffic at the time being. This means that every year there will be more people interested in that and consequently your online casino website will see more traffic.
If you’re after local traffic, then it is vital that you provide your users with all the necessary information in their own language, as well as go for the most sought-after games. It’s worth enriching your offer in not only games of chance but also sports betting.
Website creation
You can make a website for your online casino by using various tools. One of the more popular tools out there is WordPress, which you can use to create a beautiful and functional website. With a WordPress site, you also get a free blog and a powerful resource center with tutorials on how to work with WordPress, professional themes and plugins, and template sites that you can copy or modify to build your own site.
Create an amazing user experience
The best way to keep your users coming back is by offering them the best user experiences. This means that you need to have a website that has all of its elements in place, including mobile-friendly designs, quick load times, and responsive layouts. These factors are critical when it comes to maximizing the number of visitors who convert into players. You will also have to look at what makes players want to return for more because this type of retention can be automated through marketing features like email campaigns or loyalty programs.
Payment system providers
Protecting your customers’ sensitive information can be achieved through secure and verified methods of payment. The use of cryptocurrencies is becoming increasingly more popular by the day. This is because of the power that they hold, which help to keep customers’ transactions anonymous. Cryptocurrencies are also growing in popularity due to their inherent ability to facilitate quick and inexpensive instant transactions without having to go through rigorous security procedures first.
“Cryptocurrencies such as Bitcoin, Etherum, and the new Dogecoin, make the process smoother with quicker deposit and withdrawal, not to mention fairer odds when you gamble on provably fair games. Cryptocurrencies used in online casinos have helped the public look at Bitcoin as a legitimate form of value,” says Olivia Tan, co-founder of CocoFax.
Drawbacks include the fact that they are not as universally accepted as other currencies on the market, so there may be times when you can’t access or use your digital currency for a transaction. These currencies also have a long-term risk factor associated with them because their viability depends on public confidence rather than any government backing. However, these drawbacks do not outweigh the benefits of using cryptocurrencies as a medium of exchange for your online casino.
When it comes to depositing money into your online casino – there can be a number of payment options available which you need to consider before choosing one that best suits your needs. These include payment methods like Visa, MasterCard, American Express etc.; major e-payment systems like PayPal; e-checks which are also known as Electronic Funds Transfers (EFTs); wire transfer; SMS billing; mobile payments; pre-paid debit cards (e.g., Paysafecard); cash at convenience stores including ATMs; coins, tokens or casino cheques; tickets bought from automated ticket machines in an arcade shop
Internet Marketing
As stated earlier, one of the first things that a casino operator needs to do is to use SEO on a website. This helps a lot in getting the website on the front page on Google and other search engines. This is going to generate a lot of traffic for the site which will eventually create more people signing up as members.
Casino SEO is known to be extremely tough due to the competitiveness of the industry and the sheer number of new companies popping up. Businesses invest tons of money into link building because it just costs way more to promote a casino that way. Webmasters aren’t too keen on adding casino links to their sites. Even though it’s frowned upon by Google in other markets, the online casino industry is a bit different. Google doesn’t care all that much about that.
Loyalty programs are also important as they serve as an incentive for customers to keep playing at the casino. There are many different options available for loyalty programs, but one of the most popular types of programs is those that give players credits based on how much money they spend at the casino.
Casinos should also be implementing referral programs where they offer free rewards or bonuses to players who refer their friends and family to the site. There is no limit on this bonus system, so it can be worth a lot of money over time.
The operators should also implement other programs that aren’t quite as valuable but keep players coming back for more fun. Things like monthly drawings or special events are good ways to get people excited about internet gambling again while letting them know their favorite casino has got something special planned for them in the near future.
Online casinos that have gone out of business were found to have very few social media accounts up that promoted these games. It just takes seconds to start a page on Facebook or Twitter where you provide information about what you’re offering, news concerning your casino, upcoming promotions, etc. Social media is an amazing tool when it comes to marketing casinos online.
Online casino operators should work on building up their portfolios of games and come up with different bonuses/promotions for each new game or jackpot they offer. It is important for casino websites to be familiar with the current best practices in SEO, usability, conversion rate optimization (CRO) and also social media engagement.
Appearing on gaming reviews sites is another way of promoting your internet casino. Taking spots in best online casinos rankings will improve your results.
Online casino affiliate marketing is also worth looking into. It works similarly to referrals. Each time somebody registers from one of your affiliates’ links, your partner gets a cut.
Casinos cannot afford to wait around too long when it comes to improving SEO tactics on their website as there are thousands of competitors fighting over the same market, so if you want your site at the top spot, you need to be acting on your SEO as soon as possible.
The good news is that there are a few companies that provide this type of marketing, and they will take care of everything for a fee. The casinos can then focus on what’s really important: their members’ experience playing the games.
