FinanceWhat Are The Financials Of Starting a New Gaming Site

What Are The Financials Of Starting a New Gaming Site

The digital age has opened up so much more potential for business. These days, a company isn’t just limited to a specific reach. Operating online has meant that many companies and businesses can aim for a much bigger spread, often in new territories and markets. There are websites for everything online. You name it; there will be plenty of websites already established vying for your attention, selling or providing you exactly what you type into your Google search bar.

The same goes for online gambling. Starting up and running an online casino seems an exciting prospect for the savvy entrepreneur. Many new gambling sites launch on a near-weekly basis, making the process of starting an online casino, betting site or other types of gambling site seem a straightforward process. But how hard (or easy) is it to start and run a successful online casino business in today’s saturated market? And how much investment does it take? Continue reading, as that’s precisely what we aim to find out.

Cost Depends on Approach

The first aspect to weigh up, like anything, is that cost depends on your approach. There are cheaper ways to do things, but quality usually prevails in the online gambling world. There are usually two ways to start an online gambling site: either develop your own solution from scratch or use a third-party solution to provide you with everything you need.

The White Label Solution

Naturally, a turnkey solution will be cheaper to start with and the more affordable option for most. But cheaper does usually mean less uniqueness and control over your new brand. You invariably have higher running costs because the turnkey solution provides you with everything, taking more % cost from your bottom line. Multiple companies on the market offer this type of development process perfect for the casino industry’s newcomers. When opting for a turnkey solution for your initial investment sum, you can expect to get:

  • An experienced company that’s established countless amount of new casino brands
  • A high quantity and variety of casino game providers
  • Limited functionality of your website
  • Set of administrative features, back-office log in
  • Customer Support

The Bespoke Solution

If you opt to design your own bespoke “standalone” casino or gambling site, the initial investment and start-up costs will be much higher, but the project’s uniqueness compensates for the higher price. What’s more, by starting a new gambling site this way, you have everything in your control to choose what you want to provide the customer and what you don’t. Likewise, you can often reap better overheads further down the line than running your casino business using a white label solution because margins are often squeeze using the turnkey approach.

According to online gambling experts, development prices for an online casino site can start from £50,000 and usually takes around at least three months to launch the project. Remember, that’s just an initial investment ballpark figure. In reality, running a successful casino company will cost a lot more when you factor in marketing, staff costs, payment fees, licensing and customers winning in the casino.

What Affects The Cost of Running An Online Casino?

Several factors impact the total price of the casino development process. Overall, you will have to pay attention to the following aspects:

  • Cost of specialist services for the development of the site
  • Hosting & web security costs
  • Cost of procuring a gambling license (price is dependent on issuing authority and territory – a UK Gambling Commission license is the most expensive, for example)
  • Purchasing/ leasing game/ software from leading developers
  • Advertising, Marketing & Promotion (including casino bonuses and gambling offers for customer retention)

So, what’s the breakdown of starting an online casino business?

  • Software/ Platform £50,000 and up (estimated £100,000+ for bespoke casino)
  • Gambling License: £50,000 – £125,000 (depending on the country)
  • Website / Domain / Brand: £3,000 and up
  • Payment Processor Fees: £200,000
  • Staff Costs: £200,000 +
  • Reserve funds: (in case of negative casino game revenue): £500,000
  • Marketing (Including Affiliate payments) £600,000
  • The total cost of online casino business: £1,603,000 (starting)

As you can probably ascertain from the list above, an online casino built from scratch (with a unique approach) is the most expensive option. Usually, more prominent, financially backed companies opt for this option. However, there are some great examples of leading online casinos that have succeeded using white label solutions.

How long does it take before you break even and see a return on your investment? Most successful online casino sites will break even after the first two years.

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