The online gambling industry is one sector that has proven profitable over the years. Many people are making huge profits from online casinos, so if you’re looking for where to put your money, you can surely get fantastic returns from this business. One of the things intelligent investors do is learn about the business they are about to venture into. If you look at the trend, you will notice that many online casinos are springing up. The reason for this is simple: it has huge profit potential, and people who have started this business have profited so much.
According to the recent study, Online Gambling and Betting Market 2022, the online gambling market was worth $ 46.9 billion in 2017. It has been projected to rise to over $ 123.5 billion by 2026. In the past, online casinos were not given as much attention as they are today, but with the increasing engagement online, this market has experienced a tremendous boom. More people spend time on their phones today, and according to DataReportal, it is estimated that over 4.72 billion people use the internet around the globe, which accounts for over 60% of the population. (EIN News, 2021)
The difference between casino software providers and one-stop-shop solutions
you have decided to go ahead with setting up your online casino; there are certain things you should know. You will need to determine what type of crypto casino software to use and which is more profitable or has better advantages. There are basically two options you can use, the first being casino software providers and the second one-stop-shop solutions. The one-stop-shop solutions also have two varieties, the White Label Casino Platforms, while the second is the Turnkey Solutions. If you are unfamiliar with these terms, just keep reading while we explain them in detail.
Casino Software Providers
Game developers are the companies you go to for the games you offer on your online casino platform. They create these games from scratch and sell them to casinos but not in all cases. Some will prefer to partner with online casinos when offering their games. There are big players among the game providers, and it will be best to partner with them if you intend to draw in a large audience.
The leading game developers usually have more advanced and high-quality games. They offer most of the popular games gamblers look for online, and the game quality is just fantastic. You will benefit from superior sound effects and incredible graphics. Also, another thing you will need to consider when choosing your games is the issue of licensing jurisdiction.
Although we will talk more about licensing later in this article, you should know that different countries have their own preferences when it comes to games. Some of the leading game developers you should look out for include Microgaming, NetEnt, IGT, Evolution, Yggdrasil, Play n’Go, and many others. These game developers have an extensive collection of games ranging from slots, Jackpots, blackjack, roulette, poker, and many others.
The white label casino software is an easy option for investors wanting to create their own online casino. Here, the company sells you an online casino it created and lets you rebrand to make it yours. The companies who develop these casinos are already pre-licensed, and all the platform’s needed functionalities are in place. The only thing you will need to do is design your brand, and then you can keep all the profits. So, basically, you are buying a ready-made platform from the parent company, and you don’t need to create the online casino from scratch. However, there are some costs you will need to factor in, which are paid before you can begin to use the technology.
The White Label Casino parent company provides all the tools needed to run the platform. The White Label platform comes with web hosting, casino games, payment systems, consultation, licenses, and the casino platform itself. The platform will provide a back-end and some support, which could be for some prescribed time or a lifetime. The only thing you won’t get from this software is marketing, which you will be solely responsible for as the casino owner. As the new owner of the online casino platform, you will need to work on driving traffic to your site and getting players to subscribe to your online casino. Some White Label companies you will find today include SkillOnNet, Nektan, etc.
>>> What is the difference between White Label and Turnkey? Click to read the guide.
Turnkey solutions are also pre-made online casinos that can be customized. The Turnkey online casinos are usually from experienced software developers who typically create games to sell. The best part is that you can customize the platform to match your company’s needs. With this solution, however, you will be required to obtain the licenses for the online casino. This is one of the features that makes it different from the White Label Casino.
The Turnkey has games and payment processing systems already set up. You can change or customize the website’s design, although you can also patronize the Turnkey software developers for these additional services. They usually offer web hosting and design services alongside customized online casinos. Microgaming and NetEnt fall into this category. Also, one of the benefits of using this solution is that these developers can help open bank accounts and connect your site to popular payment processors. Turnkey Solutions also help with technical support and can also assist with marketing.
What are the estimated costs?
Investing in an online casino business is very profitable. Like every other business, you have to consider costs when making your business plan. There are things you need to consider before you begin the process of creating your platform, and we will be looking at these costs.
You will need to choose casino software for your new site. It will be good to start with at least over 400 games, and these will comprise popular titles. A good casino site should have a variety of games ranging from slots, blackjack, roulette, baccarat, and poker to other card games. As we mentioned earlier, you can partner with software providers by agreeing to pay royalty fees from the monthly profit derived from the games. Game developers usually agree to royalty fees between 15% and 40%.
Also, there is usually a criterion attached to most game packages. Some may require that the casino has up to $300,000 in reserve, which will be to pay players their winnings. However, game packages have lower requirements of between $100,000 to $200,000. This way, if a player hits a jackpot win of over $100,000, it won’t be a problem.
You also need to consider the costs of setting up a professional website for your online casino. A proper website will cost around $3,000 or even more. You can go for the casino builders platforms or build your site from scratch. However, you should expect to spend more on the latter because it costs a lot to build complex casino sites.
Even though you are running an online business, you still need many people to manage the online casino. If you want things running smoothly, you need to hire between 8 to 10 people. Your staff will comprise IT specialists, an affiliate manager, and customer support. Since online casinos offer a 24-hour service, you will need to consider providing support to attend to customer inquiries around the clock. The cost of maintaining staff should be around $250,000 per annum. This is just an estimate; you can pay lower, especially if you are in a country where things are much cheaper.
You will also need to consider where you will offer your online gambling services. Some countries have banned gambling, and you will need to hold the server to buy licensing packages. These should be locations that are legal so you don’t get prosecuted. When obtaining licenses can cost between $75,000 to $125,000 per year. Also, the jurisdiction may require you to pay up to 3% tax on your profits.
If you are using an affiliate marketing platform, it will cost somewhere around $50,000 to $100,000 per month. We recommend using the top affiliates, which usually rank high on search engines. They cost a lot even though it produces excellent results, but you will initially spend most of your profits on marketing. If you use more than one affiliate platform, you must budget about $600,000 for marketing. You can use services like Google ads, which cost less, but many other good affiliate websites are still available.
You also need to consider paying your players, and it will require you to connect your site to payment processing systems. The popular ones are Visa, MasterCard, PayPal, Neteller, and Skrill. You can also have an online casino site that accepts cryptocurrencies like Bitcoin. However, most payment companies usually have a condition that you have between $50,000 to $100,000 in reserve before you use their services. Some new casinos prefer to outsource their payment processors, making payouts faster and more convenient. However, this service type will cost around $20,000 to $50,000 per month.
After considering all of this, let’s look at a breakdown of all the costs and fees we mentioned:
- Software – up to $100,000
- Website design – between $3,000 to $5,000
- Staff Payment – $250,000 (variable cost)
- License Packages – $125,000
- Payment Processors – $200,000
- Marketing – $600,000
Estimated Total: $1,478,000
This is just an estimate; you may likely spend more at the initial stage. You will be spending a lot of money at first when your casino is new, at least in the first two years. Eventually, you will gain footing and begin to reap the profits of the business.
Tips to pick the right software provider for users
Before you decide if you want to go for any of the top casino software developers like Microgaming, NetEnt, Playtech, and others, here are some tips to help you decide what you need.
- Check the provider’s reputation.
- Research the number of games offered and their popularity.
- Check the quality of their content
- Find out what packages they offer
- Determine if they use the latest technologies and verify the safety issue.
Research your potential customers
One of the things you will need to consider before making any choice is to determine your potential market. You will need to find out what your audience wants and how you can give it to them. If players are coming to your casinos, they will want to play games. However, the question is: which games? Your best bet is to analyze the software provider and see what they offer critically. Find out the most popular games players search for and if the online software provider offers them. If you are looking for progressive jackpots, you may consider companies like NetEnt and Microgaming. Play n’Go offers very impressive video slot games.
Secure Payment System
Another thing you may want to consider is if the software provider offers a reliable and safe payment system. This will include the withdrawal and deposit options as well as the currency options. It is good to have multiple payment options, including fiat and cryptocurrencies. More customers prefer to transact with cryptocurrencies because they are anonymous. They appreciate the security and privacy they get from this type of transaction. Many gamblers choose the option of Bitcoins and other digital currencies since it does not require revealing sensitive information, and your online casino must incorporate cryptocurrencies.
Also, you should find out which provider offers fast checkouts and that they have a good track record. Security is very important because players will be putting down personal and sensitive information in your casino. You should ensure that the software provider has a robust defense system, including firewalls and other safety protocols.
A solid marketing plan will factor in many things needed to run your online casino successfully. It should include your plan for drawing in customers and retaining them. This will involve attracting them with eye-catching bonuses and promotions. You will need to find out which software provider offers the best rewards and bonuses as it will help the success of your casino. Also, a good provider will offer games with loyalty programs, VIP rewards, and other regular promotions from time to time. For instance, some casinos offer welcome bonuses on first deposits and even subsequent deposits. The bonus could be a 100% bonus on a fixed amount, or if not cash, free spins are awarded for certain slot games.
If you choose to go the royalty route or offer a VIP program, you give players points for playing games regularly in your casino. This will encourage them to sign up at your casino and also want to play more of the games you offer.
Your business plan should also include your marketing strategy, and this should not be only limited to blogging or social media. You will benefit from affiliate platforms offering an extension reach and attracting huge traffic. However, you should be ready to spend a lot on affiliate marketing as they produce excellent results. If you choose to go for affiliate websites, some sites charge around $50,000 to $100,000 a month. You will need to patronize more than one affiliate marketing company, so you should budget about $600,000 or more for marketing.
Build trust with Customers
You can build trust with your customers when they know you run a fair system. You should ensure that the software you use utilizes a random number generator so that there is no cheating. Also, the provider should have a responsible gaming policy in place which is the requirement of any good online casino. It would be good if the provider had a reliable customer support service so that customers don’t get frustrated when they need answers. Also, communicating with customers, letting them know what to expect from support, and preferably have some FAQs to answer most of these inquiries. You should be direct with your customers and not make promises you can not guarantee. It will be best to ensure you have professional technical support that can handle things efficiently.
What is the requirement to open an online casino?
To open an online casino, one of the first things you should do is file your incorporation documents. You can not legally run a business without your certificate of incorporation. You will need to decide what type of enterprise you intend to set up: an LLC, a partnership, or a sole proprietorship. Most people prefer to run a Limited Liability Company (LLC) because it protects them from personal liability.
You will also need to get a gaming license in the jurisdiction you want to operate. Although crypto casinos are accessible to everyone on the internet, you still need to get an operating license in different jurisdictions. There is no global license. Instead, countries have regulations regarding gambling and are responsible for issuing licenses.
Integrate Payment solution
You also need to apply for payment processing systems for your casino site. It is best to go for popular payment systems like Visa, MasterCard, Neteller, Skrill, etc., as well as for cryptocurrencies, including the major ones (Bitcoin, Ethereum, Litecoin, Dogecoin, etc.). Although optional, you may also acquire certain certifications such as eCOGRA Certified Online Gaming Sites, SSL Certificate, and GSA Certification from the Gaming Standards Association.
What makes a great casino software provider?
The services provided by crypto casino software providers make it a great company to patronize. If you want to run a casino that matches top standards successfully, you need casino software that offers favorite games players to love. Games from leading developers like Microgaming, NetEnt, Scientific Games, and Evolution Games are good options to consider.
Even with a large collection of games, if your casino software has a poor user interface, your players won’t have a great experience. Good casino software should offer high-quality games with superior graphic quality. The platform should use the latest software in the industry that guarantees the best gaming experience. Today, leading casinos invest in cutting-edge technology and innovation to ensure players get the best gaming experience.
The casino software should also have convenient and multiple payment options for players to get paid. They should offer several popular payment options available to players in different countries. Other qualities that make a casino software provider great are excellent customer service, competitive rates on products offered, and more flexibility in their software.
How long does it take to make your online casino?
Most investors who want to know how to start an online casino business wonder what the duration will be. The time frame estimated to get your online casino running depends on several factors. Depending on the business owner and software providers, the whole process can be concluded between 6 to 8 months. Typically, setting up online casino software with a White Label service takes up to 3 months. Other options like the Turnkey and even Self-Service take much longer.
The process will include setting up the website, designing the website, web-hosting, games set up, and other custom settings or features. Also, if the business owner is able to obtain a gaming license quickly, partner with payment processors, and open a corporate bank account.
The business owner will need to settle all legal obligations and provide all necessary documentation as well as contracts. The process for White Label casino is usually the easiest solution because it is a ready-to-operate casino. Its setup will take between 2 to 3 months, as opposed to the Turnkey solution, which takes longer.
I am a new investor and know nothing of casinos – which solution should I choose between white label, turnkey, bitcoin, or self-service?
When setting up your online casino, you will face several choices. One of which is building your casino from scratch or buying an already-made online casino from software providers. The White Label Casino and the Turnkey Solutions are both pre-made casino platforms. What separates the two is that the White Label casino is a ready-to-operate casino. It has all the tools needed to run the casino quickly and successfully. The White label casino comes with games, payment processor systems, web platform, web hosting, web design, gaming license, etc. The only thing the business owner will need is to rebrand the casino. The custom options are limited, and the business owner may not have the flexibility to change many things about the software.
On the other hand, the Turnkey solution comes with a ready-made website except for a license and payment processing system. The software provider will outsource or even pay these services separately. The business owner can revamp the platform and change the entire web design. Once bought, the buyer takes complete ownership and will be responsible for obtaining a license for the platform.
The Self-Service option involves building the online casino from scratch. The casino owner will need to partner with game providers, pay web designers, and build the online casino. The process takes longer as everything is done right from the beginning, including obtaining gaming licenses, registering the gambling business, and meeting all the requirements. The Bitcoin casino software offers a platform that works with cryptocurrencies. It could either be a White Label casino or a Turnkey solution. This software integrates Bitcoin and other digital currencies into the platform.
How can I make sure I abide by the rules and regulations of owning a casino online?
Various countries have rules and regulations guiding gambling in their territories. If you want to be on the right side of the law, you must comply with these regulations. You can only know what regulations apply in jurisdictions by researching and making inquiries. If you are to provide gambling services in any country, you should inquire which authority regulates these businesses and the required obligations. There are jurisdictions that recognize some licenses, and you will be able to operate without any other obligation. Some jurisdictions where gambling is legal require online companies to obtain a license and meet certain criteria to obtain such a gaming license. You also should ensure you find out the countries where gambling is illegal so you don’t end up breaking the law. You should also find out the tax requirements, immigration regulations, and other requirements expected from online casinos in different jurisdictions.
Who owns the customers’ database?
The General Data Protection Regulation (GDPR) is a new privacy law introduced by the European Union. This regulation is a necessity for every business handling people’s personal data in the EU. Any company dealing with personal data must handle these data carefully and have complete control over such information. They have the responsibility of protecting the data to prevent any illegal access by third parties. If you are running an online casino, you will be responsible for your customer’s database. This means that you must be in compliance with the GDPR. Even if your online casino is not operating in the EU, but you manage accounts of players from countries in the EU, you will need to comply with the GDPR rules.
Online casinos today are expected to comply with the KYC process to prevent fraud and money laundering. When customers submit their details to the casino, they request personal details such as ID number, ID expiry date, Names, Addresses, and other personal information. When this data is sent, it is then processed using database systems. Online casinos can be exempt from this responsibility if they hire the service of a data processor to manage personal data using their database systems. The EU lists six criteria for processing EU citizens’ personal data, and non-compliance attracts a fine of up to 20 million EUR.
What is responsible gambling, and do I have to promote it as an online casino owner?
Responsible gambling is a must for all gambling establishments. Many people enjoy playing games online, but when it becomes an addiction, it’s dangerous because players can end up bankrupt. A responsible Gambling policy was put in place to ensure that players are not at any risk when gambling. The regulators demand that gambling establishments comply with responsible gambling requirements.
One of these requirements is for casinos to prevent underage gambling. This is why players are mandated to submit their IDs for verification in the KYC process. The legal age for gambling is 18 years and older. In some countries like the US, the age requirement is 21, while in Malta, the legal gambling age is 25. Responsible gambling controls dangerous gambling behavior, and casino operators are expected to screen individuals during onboarding. They are also expected to monitor the addictive triggers and immediately restrict the player from their service when they discover such behavior.
The casino should have special measures to protect players from addictive behavior. They can use deposit limits, time-outs, activity alerts, and access limits. Casinos can promote responsible gambling through ethical marketing. They must not use advertisements targeting vulnerable groups like children, teenagers, and self-excluded players. Casinos should not normalize gambling to sponsor sports or youth culture. The casino should also ensure responsibility by advising players on the risk of addictive gambling and creating awareness for responsible gambling.
Do I need to have an affiliate platform?
There are lots of benefits to using affiliate marketing for online businesses, and online casinos have been one of the beneficiaries of this marketing strategy. If you are starting your own online casino, you should be ready to spend the bulk of your finances on marketing. While many other paid advertising methods exist, affiliate marketing stands out from the rest. Affiliate marketers can drive huge traffic to a site quickly. These third-party sites bring traffic to your online casino so more customers can know about your business. It is smart to hire the services of affiliate marketing platforms for the growth of your online casino. They build traffic using SEO and link building and ensure your business ranks high on search engines.
Can a player cheat or hack an online casino? Do I need to have some sort of risk management software in place?
Casino software providers ensure a risk management plan is included in their software. Online casinos have a security system to avoid any form of cheating. Stricter rules and measures have been put in place to ensure fair winning. It is very difficult to cheat on an online casino game with all these security measures in place. Casinos partner with third-party companies that monitor transactions on their site and watch out for any irregularities or foul play from players.
There have been incidents where players try to cheat or tamper with the Random Number Generator using some hacking software. However, it can only be done by experienced hackers who can detect flaws in the program, but this is still not possible because most game developers also monitor their games, looking for problems and fixes. They will easily identify any attempt at hacking or breaking protocols.
Can I open an online casino outside of my residency or nationality in another country?
Opening an online casino in any part of the world is possible. Although, it is easier and more convenient to do this in your jurisdiction or where you reside. If, however, you want to open an online casino in another country, you must check with the immigration department of the country. They will provide you with all the rules for establishing a business as a foreigner. You will also need to meet up with Visa requirements, company registration, and opening a physical office in the country. Also, you will need to ensure that you are in compliance with tax regulations and obtain the necessary permits for online gambling in the country.
Which country is the best to open an online casino business?
The easiest place to open an online casino is in the country you reside. To start an online casino business in another country, you will have to consider the regulations that apply in those countries. It can be difficult to apply for licenses in certain countries, while in other countries, the process is simple and can be compared to opening a bank account. Also, you need to consider the issue of taxes, as these taxes vary in different jurisdictions. In some countries, you pay more, while others may be more affordable.
That said, here are the 7 best places to look at:
- Isle of Man
Do I need to have a business lawyer if I want to run an online casino business?
When running your online casino, there are many legal issues you will likely run into. Having a good legal firm that represents you allows you to focus on the business side of your casino. A lawyer will help you handle legal challenges involving negotiating complex transactions, protecting intellectual property, taxes, real estate matters, labor and employment issues, and other legal matters. Having an experienced lawyer to counsel you on your business is very important. Law firms have vast experience in online gaming, immigration, litigation, real estate, construction, finance, and legislative matters. These lawyers can advise you and help in general licensing, company incorporation, and legal compliance.
Do I need to pay for the first consultation with software providers?
Consultation is usually free when reaching out to software providers. Many of the leading providers offer 24/7 support to answer any of your questions. They usually have an experienced team that can offer solutions that work best for your online casino business.
Now that you know what creating a successful online casino entails, you can start drawing up your plan now. Remember, you will need to work hard on marketing as it will help the success of your online casino. Your marketing budget will take the bulk of your funds, and usually, it would take about two years to gain footing in the industry finally. For online casino software providers, recommend options like Microgaming, NetEnt, and Playtech. These are giants in the gaming industry, and they have thousands of game collections. Also, they have gained a solid reputation among gamblers and offer popular titles which most gamblers are interested in.