Can Anyone Really Start an Online Casino? Yes, that is the short answer. With a global revenue of nearly $449.04 billion in 2022, and projected to reach $1.4 trillion by 2030 – who wouldn’t want a slice of that cash pie? As developments in technology raze down obstacles, starting your own online casino is not only possible but getting easier by the day. There are even white-label solutions that will take care of the entire process for you – from launching your website, taking care of the legal and regulatory licensing, and even trailblazing your product with an expert marketing campaign (advertising is the backbone of any successful online casino). So, in the i-Gaming gold rush of 2023, anyone could head to the Wild West of the infinite possibilities of the digital domain and launch their very own casino.
For the right price, that is. The long answer, which will be the meat of this article, is that while anyone could start their own online casino and potentially dip into the global millions of potential revenues – the startup costs are eye-watering and there are many boxes to tick. Before the step-by-step process to start your own casino and the breakdown of costs involved, let us just get an idea of the immense earning potential of the online gambling industry.
The best way to predict the future is to create it.
Entrepreneurs, digital innovators, and aspiring investors are heading to the i-gaming and online gambling industry in droves. Why wouldn’t they? The top 10 online casino sites make $10 billion annually. Statisticians estimate that the average winnings (to the house) of global online casinos range between $150,000 to several million per day. Think about it: with an online enterprise your reach is endless: no borders, no brick-and-mortar costs, no staff to hire, or infrastructure overheads. The world – and all its many Casino lovers and i-Gamblers, is your personal oyster.
Let us have a quick overview of the online casino industry and the potential RoR for a business owner in 2023:
1. The Top 10 Casino Sites Make $10 Billion Annually
As we mentioned, the world’s 10 biggest casino sites rake in a staggering $10 billion in revenue each year. To put this into perspective, the leading five brands alone – including Flutter Stars Group, GVC Holdings (Coral), Bet365, Scientific Games, and William Hil – each amass over $2 billion annually. When it comes to the online casino realm, brand owners with the right ideas and approach can do more than cover their costs. The return on investment for the online casinos that carve out their niche is jaw-dropping.
2. The i-Gaming Market is Valued at $60 Billion
When it comes to online betting, the i-Gaming sector is a veritable Goliath, rounding up a colossal $60 billion per year – expected to soar to $95 billion within five years. No modest claim given it will eclipse Facebook with a current valuation of $85.97 billion.
In fact, the i-Gaming industry's global worth surpasses that of the music and Hollywood industries combined. The sheer magnitude of the iGaming market highlights the significant financial opportunities it presents. Whether you are an established player or a newcomer looking to invest, there is no denying the potential for substantial returns.
3. The Biggest Brands Own Multiple Casinos
If you have already been doing your research, you will be familiar with some of the big names: Betfair, PaddyPower, and Sky Bet, to name a few. What may surprise you, however, is that many of these apparent competitor sites are under the same parent brand. For instance, 888 Holdings has a diverse range of gambling products from sports betting, poker, and bingo, to casino games. The aforementioned Flutter Stars Group, the industry leader, owns a portfolio that includes Betfair, Paddy Power, PokerStars, and Sky Bet. Through diversification and expanding their reach into all sectors of the industry, these big names can cater to a range of players and thereby can tap into all corners of the market, snapping up profits along the way!
4. What are the Biggest Money Makers for Online Casinos?
Of course, there are benefits to owning a physical casino that you will not get when operating purely online. The Las Vegas casinos, for example, generate a substantial income from their hotels and on-site entertainment. Online casinos get their revenue from gaming alone. Within this, the lion’s share is from slot machines: representing a whopping 70% of income. Next highest are table games, making up 5 to 25% of revenue with poker variations usually topping the list. Of course, there is a parallel revenue stream from sports betting – a multimillion-dollar industry in itself – which will eclipse casino games at peak periods in the sports calendar.
Future Trends in Online Casinos: VR and AR
To those unfamiliar with the industry, the word “Casino” might conjure up an image of a glamorous venue, glittering dresses, tuxedos, and high-stakes poker games. The reality of casinos in 2023 will be increasingly tech-reliant: players might be wandering around casinos wearing headsets or heading into rooms for Augmented Reality gaming. In the online casino industry, the future is poised to be nothing short of transformative, with virtual reality (VR) and augmented reality (AR) playing ever bigger roles.
The future of online casino technology is poised to be nothing short of transformative, with virtual reality (VR) and augmented reality (AR) playing pivotal roles. VR is blazing at an especially fast rate with irresistible experiences offered to players. Imagine placing your headset on and being transported into Casino Royale and rubbing shoulders with James Bond (avatar version) at the Blackjack's table. AR, on the other hand, is a stepping stone into immersive casino experiences that overlay digital and real-world settings, sometimes from the comfort of your own living room.
The level of interactivity is unimaginable – but continues to defy expectations and attract new players at phenomenal rates. With the right internet speed, an immersive virtual casino experience could be brought into households around the world. The Metaverse and its blurring of the virtual and physical boundaries could be ushering in a new era of online gambling.
The road to success is paved with innovation.
The gaming and online gambling industry is the new frontier of investment. Great fortunes are being made for enterprising individuals, and the advancements in technology and white-label solutions are opening the door to fresh players. If you are considering staking a bet on this fast-evolving roulette table, then there are two main approaches: through i-Gaming operations or as an online casino affiliate.
i-Gaming Operator
The ideal i-gaming operator will have a keen sense of the market. You come from a gaming background or have worked in industry-relevant roles. Having a finger on the beating pulse of i-gaming and knowing what drives players and informs their bets will be key to a successful venture. It will not be enough to navigate the front of the house – it is also critical you understand the complex laws and licensing regulations surrounding the launch of the new platform.
Casino Affiliate
A casino affiliate program is designed to bring in new players. As a casino affiliate bringing in new referrals you might have the knowledge and relevant information on the casinos you are promoting. Alongside earning referral rewards you may also get a commission of the player’s activity. Either way, this background will provide the perfect window into future marketing strategies you might deploy for your own online casino.
Fortunately for first-time brand owners, there is an increasing number of “white-label” companies that offer turnkey solutions to handle the entire launch of a new i-gaming site. Part of this package will include licensing and handling any legal and regulatory requirements to ensure those critical boxes are ticked.
Alongside industry experience, a keen eye for internet marketing will go a long way to boosting your chances. Especially in the first five years, an aggressive and high-retention marketing campaign will lay the foundation of your enterprise and determine its ability to weather the storms ahead.
Whichever path you choose, the future of your platform will hinge on your ability to satisfy your clients. A visually appealing UX/UI, cutting-edge technologies, platform speed, the latest in gaming tech and captivating content, and multidevice compatibility – success hangs in the balance of how you weigh these all-important considerations. "In the world of gaming, innovation is your compass." - Gaming Mogul
To carve out your share of profits in any competitive industry you need to do one thing: stand out. If you are a brand owner looking to start an online casino, then innovation is key. Once you have followed the standard procedure to launch your platform (our step-by-step guide to follow) then you need to add the cherry to your cake and make it shout loud and attract players from any competitor sites. What will be your USP? Have you considered trying something new altogether? The vanguard tech offered by Metaverse add-ons offers compelling avenues to making your platform feature-rich, but bear in mind that the more you add the more you pay, both in the initial integration and in hosting fees down the line.
Step-by-Step Guide to Start Online Casino
If you are serious about venturing into the online casino business, you will need to do ample research and prepare yourself for the steps entailed. The beauty of the internet means anyone could, in theory, start their very own online casino and have the global reach of anyone with a fast-enough connection at their disposal. So, if this is a venture that interests you here are the steps you will need to take:
- Obtain Appropriate Software: The foundation of any successful online casino is reliable and attractive software. Do ample research and partner with a trustworthy and well-reviewed software provider. Consider factors like data security and the availability and quality of technical support.
- Diversify Your Content: Offer your players a wide range of premium content to attract a wider net of gamers. You might want to do some research on current trends and upcoming developments to ensure your library is relevant. Old-school and familiar games like slots, roulette, poker, bingo, and blackjack are evergreen classics that it would be wise not to overlook. Adding live casinos with a real dealer will help give an authentic vibe to your platform.
- Obtain a Gaming License: The first biggest hurdle you will face when launching an online casino is startup capital. You will need ample financial preparation for the overheads involved, which we will cover in more detail in the next section. The second hurdle is the legal aspects. You are pitching a new tent in a landscape riddled with legal and regulatory rocks and you will have to prepare accordingly. The licensing is by no means a deal breaker, it is simply a non-negotiable step for any business with long-term prospects. To attract and retain a strong clientele you will need to reassure them of your transparency and trustworthiness. You would not use your credit card on an unlicensed gambling site, and you need to put yourself in the shoes of your future players. Research and compare when choosing your jurisdiction. The gambling authorities of the UK, Malta, and Curacao are well-known and trusted choices when it comes to license distribution.
- Integrate Payment Methods: From the outset work on securing partnerships with viable payment system providers to ensure you can offer your players a wide range of options. Do due diligence on any third parties and prioritize reliability and security. Bear in mind the divergent needs of players coming from various parts of the world and do your best to accommodate various payment preferences. The more ways there are to pay the more players can get involved!
- Build an Exceptional Website: Your website is your window display. No one is going to step into the store if they do not like the look of what is on offer. Think long-term and focus on what you want your USP to be. Decide whether you want to down the RnR (“rob and duplicate”) route and improve on existing competitor sites or be a maverick and try something new altogether. Whatever you choose, make it work. Keep it sleek, simple, and user-friendly. Do not overcomplicate your platform with too many features or add-ons. These could not only overwhelm a visitor and make the site difficult to navigate but they will crunch up computing power and run up your bills down the line. Prioritize responsive design and smooth navigation, and remember, superior gaming is what your players are looking for.
- Marketing and Promotion: The most cutting-edge software, dazzling website, and irresistible smorgasbord of games will mean nothing (and amount to zero numbers of profit for all your expenditure and time) without marketing. The players won’t come if they don’t know where to go! Effective marketing and a robust affiliate system are crucial for attracting and retaining players. Think about building up a devoted and constant player base using loyalty programs, reward schemes, and bonuses. Think outside the box and create your own retention campaign using personalized approaches targeted to your specific demographic of players. To quote Kipp Bodnar, the CMO of HubSpot, “Recruiting great marketers should be your number one priority.”
Costs Involved in Online Casinos
So, we have established that, theoretically, anyone could launch their own casino. There are even white-label companies that will take care of the entire process for you. For those curious about the price tag of a casino-in-a-box here are the costs to consider. To start, there is the license, with setup fees of around $34,000, plus monthly payments of roughly $5,600 for the first two years. We are just getting started, buckle your seatbelts, and warn your bank because you will need a minimum investment of $120,000. Next up there are the overheads for crafting your digital domain: a well-structured website could set you back anything from $2,700 to well over $13,000.
Now, let's talk software. To guarantee your return on investment, you will want nothing less than exceptional games. Excellence costs and building top-of-the-board games may require an additional investment ranging from $100,000 to half a million. Now, as we discussed earlier you may as well set a flame to all that invested cash unless you promote your casino from the rooftops. For marketing and promotion, expect to allocate at least $700,000 for your debut year. Of course, you can rein in the marketing budget once your platform is off the ground. Other costs will be lower or higher over time. The startup costs will always sting any business owner, but the ratio will shift once the company is operational. Here is an estimation of how your expenses will look before and after your casino goes live:
Pre-Launch Expenses
- Software Setup: 30-40%
- Marketing: 20-40%
- Licensing: 10-30%
- Staff: 10-20%
- Other: 10-20%
- Company Setup: 5-7%
Post-Launch Expenses
- Marketing: 50%
- Games: 15%
- Software Support: 10%
- Staff: 10%
- Other: 10%
- License Fees: 5%
When all is said and done, launching your online casino could run you anywhere from $1.2 to $2 million. We did warn you the costs will be eye-watering. That said, with an aggressive marketing plan and some captivating gaming content you could be reaping more than just a return on investment – the online casino industry is arguably one of the most lucrative ventures on the market. Remember, success is in the details.
Success Strategies: The House Always Wins
When you are looking at a $1 million price tag the potential rewards need to be worth it. Fortunately, for those able to get a foot in the door of the online casino business the dividends can be sky-high. Moreover, first-time casino owners can find reassurance in the business model of the gambling sector: “The house always wins.” Also known as the “house edge” the advantages casinos hold over their players are deliberately calculated odds designed to ensure the average gross profit one expects to make. These built-in tools give the casino an edge over its players, with odds increasing (to the house) over time. In other words, as a gambler, the longer you play the lower your odds of success. As the casino owner, your house edge will help you keep the tide of profits on your side (while allocating enough sporadic losses to keep your players coming back for more). The ratio will vary by game, you will hold the lowest edge in Blackjack (sometimes as low as 0.28%), for example, and the highest in Keno (around 40%).
The House Edge Unveiled
Your players will be faced with unfortunate odds that will weigh the revenue stream in your favor. Roulette is the perfect example of this strategic imbalance:
The roulette wheel is marked from one to 36, so the logical assumption might be that the odds of winning a single-number bet are 36 to one. Yet, roulette wheels often include not just one zero, but often a double zero, and sometimes even a triple zero. Therefore, the real odds of winning stand at 37 to one, 38 to one, or 39 to one, rather than the initial perception of 36 to one.
No matter the game of choice, the house edge is likely to be on your (casino owner) side. Moreover, the percentage in your favor applies not to the bet on the table but to the total wagered. Imagine your position as the house when you have a player going to town on $10 bets with the wheel spinning 50 times every hour. The longer your players stay online the lower their odds. In real casinos, you can tempt your players to stay with complimentary cocktails and keep windows shut and clocks off the wall to keep the illusion that time has stopped. Your online casino will have to deploy different tactics, here are some ideas to get you started:
- Bonuses and Promotions: Offer attractive bonuses to both bring on fresh players and keep your existing ones. Think of free spins, reload bonuses, and extra money to encourage players to stay online.
- Free Play: You could give players free plays or allow demo modes. That way players can familiarize themselves with the platform risk-free and gain confidence, increasing the possibility they will switch to live mode and longer sessions.
- Enticing UX/UI: Keep your games visually appealing and engaging. Keep your graphics high-quality, and add fun animations or catchy sound effects to keep your players engaged.
- Loyalty Programs: Get your players to feel VIP with perks and bonuses rewarding longer play and loyalty.
- Progressive Jackpots: Games, where the prize pool gets incrementally higher, are hard to leave, imagine leaving a potentially life-changing jackpot.
- Refunds/Cashback: Some casinos soften the blow of losses with partial refunds or cashback in exchange for prolonged play.
- Personalize the Offers: Forget about content: in 2023 data is king. Leverage data analytics to predict your players’ behavior and target ads and promotions for higher success rates.
In the world of online gaming, adapt or be left behind.
The house edge may be on your side, but as in any lucrative industry stakes are high and competition will be stiff. The casino landscape is best entered by entrepreneurs and innovators who are highly adaptable to a fast-evolving future. The emerging tech of the Metaverse could either be the tsunami that wipes you out or the “bomb” wave that you ride to the shores of success. Your ability to evolve will keep you ahead of the curve.
Just as in Caesars in Las Vegas, your online casino must balance the hope of profit and the disappointment of loss in an artfully created illusion of reality. The roadmap of 2023 and beyond will give casinos ever greater opportunities in this realm. As the Metaverse and accelerations in AR and VR unveil exciting avenues into the future of i-Gaming there has never been a better time to join this most liquid of all gravy trains!
