Starting an Online Casino

[cegascon]

Hi Everyone!

I have a bunch of experience building websites and started many. I am now looking to start an online casino. I've been recommended this forum could you guys help in explaining to me how the industry works? So far, I understood that it was layered as follows:

Product Side:
Casino License --> Casino Software powers --> Predetermined Games --> Payment provider

Marketing Side:
Affiliate Marketers --> Website view (CRO) --> deposit --> Play --> Increase Money --> Repeat

Questions that I have if I'm seeing this industry correctly:

Can we have our own games ? What are the restrictions around it?
Are deposit mandatory or can it be a pay per use?
What are the good affiliate marketing cie we can build relationship with to have them promote our website?
Are we allowed to advertise on Facebook, Adwords, 2sd & 3rd Party Network?
Where would you spend most of your money?
- The game itself?
- Marketing the game and improving it after?
Is there such a thing as A/B testing the game itself for optimized monetization?

[universal4]

It has been suggested for years that you should have $500,000 to $1,000,000 in liquid capital before even thinking about it. (some would say that even this would be underfunded)

Many time we have seen numerous underfunded projects come and go, and they are often not pretty for players, affiliates or the operators themselves.

Beyond that, you could start as an affiliate, then after learning the industry well, you can decide if becoming an operator is worth the investment.

Rick
Universal4

Alos, be advised that the answers to many of your questions can also be determined by what country you reside in, as well as what country you plan on operating from, and where you plan on putting the customer service department.

[F-L-C]

I think even that would be underfunded, I think you would need at least double that

[xecutable]

I'd say even triple the money would be underfunded, mostly because I used to work closely with a starting brand that was also a GPWA sponsor, and went down under a year, with a lot more cash available.

Common mistakes that I noticed were: 1. Spending large sums on SEOs that got the brand nowhere. Instead I would have invested those money into the thousand affiliates here to promote.

2. Getting games from a provider that doesn't have very popular or good looking games. I'd say Playtech are quite common, quite playable, and perhaps their packages are pretty expensive, but at least you know what you are getting for. They went with some other brand, which games didn't posses much interest to those that played.

You can advertise on FB as long as you are the brand itself, and the last time I talked to them you need to spend at least 50,000$ a month, an investment that I think it's not worth, but that's up to you. You can advertise on Adword and stuff, but depending on what keywords you put, and what demographics, gambling clicks can be quite expensive.

All I know is, there are a lot of license fees that have to be paid, lots of taxes, and this is where a big portion of your budget will go.

[cegascon]

thanks for the reply! Yes SEO is a tricky beats especially when strating out.

I would definetly go the affiiate route when it comes to marketing. Its a much result driven approach. When you say triple that, what other cost are involve?

Affiliates are payed on commission so 0$, Gaming software is 200k, Fb ads 50k/month = 600,000$. And that's all driving result or traffic.

What are the other big cost that you foresee? What would be the most expensive part of the casino the promotion or building the software itself?

Thanks!

[JackTenSuited]

thanks for the reply! Yes SEO is a tricky beats especially when strating out.

I would definetly go the affiiate route when it comes to marketing. Its a much result driven approach. When you say triple that, what other cost are involve?

Affiliates are payed on commission so 0$, Gaming software is 200k, Fb ads 50k/month = 600,000$. And that's all driving result or traffic.

Affiliates aren't $0, sure they are paid on commission but you need to hire affiliate managers, backend software and spend a lot of money promoting to the affiliates in the 1st place. You can't just expect to throw up a basic affiliate platform and expect to have super affiliates knocking your door down.

What are the other big cost that you foresee? What would be the most expensive part of the casino the promotion or building the software itself?

Getting licensed in whatever jurisdiction
licensing casino games and platforms, you'll probably need multiple software options with a decent platform to hold it all together in order to appeal rather than just 1 slots provider.
Staff, ofcourse your going to have to bring on a lot of staff for support and marketing, tech, managers etc all with several years gaming exp.
Hosting, probably will be expensive in the location you get licensed.
Security and banking costs etc
the costs go on and on.

[nwalker]

You need to approach this as building a business, not just a website. Have you developed a full Business Plan?. I'd be getting professional help in putting that together especially as it's in an area where you have limited experience.

I know of other Affiliates that have crossed over to be operators, and one of the reasons why they have become successful is their knowledge of what players like and want and how to deliver a great service.

Just having a lump of cash is not the key to success.

Good luck.

[baldidiot]

What are the other big cost that you foresee? What would be the most expensive part of the casino the promotion or building the software itself?

You need cash to pay the players. What if on day one someone comes in and starts making big bets and wins $100,000 - would you have funds ready to pay that?

If you're running you're own casino rather than a white label then you'll also need customer service staff, accounting staff, tech support and so on.

If you want to do it properly then I would say you'd need at least $5m in capital to even start considering running your own system, with a large portion of that set aside to pay the players.

You could also go for a white label - the entry limitations are much less than starting up yourself, but many players (and affiliates) don't like white labels...

[pinkytoe]

Operator margins are not as high as many people think.

Affiliates can be 30-50% of your rev.
Software providers ranges from 15-23% of rev
Then you have marketing, staff, hosting/server costs and possibly alot more.

Questions to answer:

Why should/would I send my players to your casino ahead of the other 500 operators out there that offer a similar products?

Given that your casino will be new and unheard of - why should I trust you ahead of an established brand?

[gioprogress]

Hi There
Hope you're well. It was nearly a year ago but wanted to see if you managed to find a solution to start your own casino ?
ProgressPlay are industry leaders in white label casino platform so if you still need some info feel free to get in touch - email: giovanni {at} progressplay.com skype:gio-progressplay

Thanks
Giovanni

[Ares]

I don't thing it is that simple as you describe the business model.
You just can't depend solely on affiliates for your customers.
One way or the other you have to work hard on marketing and seo.

[rouletteguru]

Operating your own casino is probably too risky. In any jurisdiction theres a lot of red tape. The idea of being an affiliate is much more appealing if you get a good commission for life. But yes if you did own your own casino it could be even more profitable. But what happens if during start up some high roller takes you for millions with a lucky few bets? You need to have good terms and procedures to protect against this.

[Aeternus]

If you are serious about it, check out https://igamingcloud.com/

Buying a solution like that would save you a lot of hassle.

[casinopapa]

Looks interesting, have you used that service?

[latrobet]

First I will trow in the disclaimers. I do work for the software provider that I am about to mention.

The platform I currently work on has a deal with the Vanuatu gaming Jurisdiction ( www.gamingregulator.com ) to issue a restricted license to new operators that use the platform. The rational behind this is to overcome the red tape that you mention but to also help smaller startup operators get into the market. The regulators are comfortable as they know that the platform ticks all the compliance boxes. If you need any help drop me a line. The platform is www.payperhead.guru it is a very cost effective solution.

As a footnote. I started in this game as an affiliate, moved across to building risk management systems for bookies now I run a platform. If anyone needs any help I will do my best.

Sent from my SM-N910G using Tapatalk

[universal4]

Is this a shared license being offered?

I see reading the gamingregulator site they are very interested in helping operators, but did not see anything anywhere about player protections.

Forward Thinking Regulator The decisions and actions we take are based on the best interests of all stakeholders as provided by the law and internal policies.

What if any player protections are in place as I did not see it mentioned anywhere, I did read the about Vanuatu and about GGR and did see it mentioned that

End User focussed regulation and player protection.

but it did not really state much information about how.

I tried to read the code of Ethics, but it seemed all pdf's on the publications page were 404's.

Rick
Universal4

[latrobet]

No its not a shared license. Each operator is issued with their own license.

I dont want to sound like Im selling the Jurisdiction but they are going through a reinvigoration at the moment. Vanuatu was one of the first jurisdictions to focus on online wagering, they were just ahead of the times and seemed to lose focus on it. Recently they have appointed a new regulator and he is a forward looking guy. He has been in the industry for some time so understands it well.

The license is on the pretence that the latrobet software is used so that the jurisdiction know that player information and transaction data will be managed appropriately.

If you need any further information drop me a pm with some contact details and we can chat.

Normal disclaimer.... I do have an interest in the software company.

Sent from my SM-N910G using Tapatalk

[universal4]

Well the site also sells the jurisdiction as well as the business side of things but that doesn't really answer the questions.

What code of ethics do operators have to follow and how are players protected? (not just the server security concerning their data)

Does the licensing jurisdiction have any watchdog or player organizations where complaints can be filed and followed up on?

What responsibilities do the operators have concerning complaints?

A portion of the problem the industry currently has is a lack licensing groups and regulators that are all about the licensing fees and taxes from revenue (or whatever revenue model they feel appropriate) but somewhat a lack of really being there for the players.

Hopefully this new reinvigoration you speak of will not be only all about the operators and the taxes but will truly be players advocates as well.

Rick
Universal4

[latrobet]

I understand your concerns Rick. The regulator is governed by the department of Customs and Inland Revenue. I would suggest that a department that is placed in charge of border security is beyond reproach.

I did just check the site and you are correct the pdf links are broken but you can read a little more about the regulator on the about GGR page http://gamingregulator.com/aboutus.html Im on a mobile so things are a little crowded but Im sure I seen a heading there "CODE OF ETHICS".

Cheers

Sent from my SM-N910G using Tapatalk

[LiveonScore]

You need much more than 500 000$ as to get gambling licenses for most of the countries from Gibraltar + Affiliate program better than any other online casinos, because as a new online casino you must have much more better offers than any others, to get enough customers.