The online casino business is expected to bring in revenues of $15 – 18 billion dollars in the year 2010, making it the fastest growing business around the globe. With revenues of this magnitude, starting an online casino may seem like the perfect business. But, before you place your bet that your online casino will make you rich, there are some things you should know.
What an Online Casino Business Is and What It Isn’t
An online casino is a business. It is not, however, an easy way to make millions. While it may seem easy to install a little software, put your casino online and sit back and rake in the profits, there is more fiction to this idea than truth.
Like any business, it takes work to make an internet casino profitable. It also takes money. The average online casino spends as much as $50,000 per month on marketing alone. Other business expenses include software licenses and other licenses, online hosting expenses, and other business related expenses such as accounting.
In order to make your online casino business successful, you must be willing to invest both time and money into your operation.
How To Start An Online Casino Business
There are three basic ways you can go about starting an online casino.
- If money is no object, you could have your own e-commerce software designed and your own website set up. While this option will usually cost you millions of dollars in design fees, the upside is that you will own the software and therefore won’t have to pay any royalties on your profits. Also, since you own the software, you could license that software out to others who want to start their own online casino, and have them pay you royalties on their profits which would greatly expand your own revenues.
- Got money to invest but not millions of dollars? A little less expensive way to start your online casino business is to license the software from an online gambling software provider. This option will usually cost between $30,000 to $350,000, with an average licensing fee of around $150,000. You will also need to pay a monthly royalty which is a percentage of your gross profits. This is the option of choice for most brick and mortar gaming establishments as well as entrepreneurs interested in getting into the online casino business.
- The least expensive option for starting an online casino business is to obtain a sub-license from a licensee. In this case, you would expect to pay anywhere from $0 to about $60,000. The upside of this option is that you can get started for very little money up front. But, the downside is that you will pay a very high royalty to the licensee than you would to the software company, leaving less profit for you.
Marketing – The Key to Running A profitable Online Casino
It doesn’t matter how great your online casino is if nobody comes to play. Marketing is what makes the difference between a profitable business and an unprofitable one. Even if you plan to hire someone else to market your business, you should still know the basics of marketing in order to be sure that the person you hired is doing all that can be done to ensure that your online casino brings in as much revenue as possible.
You will need to know everything you can about internet marketing – such as affiliate marketing, SEO, banner advertising, ppc, advertising, and email and newsletter campaigns.
You should also familiarize yourself with offline marketing strategies such as direct mail and print advertising. There are a variety of markets online that can be reached through offline methods and enticed to buy.
As you can see, starting an online gaming business isn’t something to be taken lightly. It requires thought, commitment and investment. If you are willing to put forth the time and effort, your online business will be a success.