How to Start an Online Casino
The online gambling industry is one sector that has proven profitable over the years. Lots of people are making huge profits from online casinos, so if you’re looking for where to put your money, you can be sure to 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 engagements 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
Modular and scalable solutions
Affiliate marketing management system
24/7 customer support
User-friendly design and interface
Unified API integration
User-friendly interface and high-quality graphics
High level of security
If 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 not familiar with these terms, just keep reading while we will 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 be benefiting from the 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 games 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 back-end and some support, which could be for some prescribed time or 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 web site’s design, although you can also patronize the Turnkey software developers for these additional services. They usually offer web hosting and design services alongside the customized online casino. Microgaming and NetEnt fall into this category. Also, one of the benefits of using this solution is that these developers can help with opening 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. When making your business plan like every other business, you have to consider costs. 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, 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 will usually agree to royalty fees between 15% to 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, there are game packages with 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 round 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 the location where you will be offering your online gambling services. Some countries have banned gambling, and you will need to hold the server to buy licensing packages from. 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 are using more than one affiliate platform, you will need to budget about $600,000 for marketing. You can use services like Google ads, which costs 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 type of service will incur 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 – $300,000
- Website design – $3,000
- Staff Payment – $250,000
- 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 quantity 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 also verify the issue of safety.
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 critically analyze the software provider and see what they offer. 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 currency, since it does not require revealing sensitive information and it is important your online casino incorporates the option of 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 on your casino. You should ensure that the software provider has a robust defense system which should include 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 on 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 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 which offer an extension reach and draw in 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 numbers 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 has 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.
Now that you know what it entails to create a successful online casino, 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 finally gain footing in the industry. 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.
- EIN News, 2021