Сasino

How to Start an Online Casino, Step by Step

5/1/2020

What's an online casino business?

Gambling has always been considered a sure source of quick revenues, and with the ascent and growing popularity of internet services, online gambling inevitably found its niche among other popular forms of entertainment. Online Casino is a web site running specialized software players can access via the internet. In recent years online gambling business experiences an incredible boom, with internet casinos rivaling their traditional counterparts and the number of online gamblers increasing every day.

Is an online casino profitable?

An Online Casino is probably the best way to get a quick return on investment on the internet. It doesn't require substantial initial investments and the operational costs are also low. It's important to keep in mind though that due to the spike in demand for online gambling services, currently there are a lot of businesses exploring this area, and the level of competition is really high. Still, with the quality software and high level of service, as well as creativity and ingenuity allowing to distinguish your online casino among the competition, it can be an incredibly profitable business.

How to start

Before you plunge headfirst into the whirlpool of web entrepreneurship, first you need to make some preliminary steps. You need to study the market and identify your competitors, you need to plan your budget and decide who's going to be your target audience and what software you want to install on your site. You will need to choose the jurisdiction where you will register and license your business, as well as outlining your marketing strategy.

Preparation

At this stage, you assess the gambling market and existing players there, plan your budget, and decide on the format of your business and the niche you can occupy on the market.

Competitor Analysis

The first important preparatory step is studying the market and assessing the competitors. It's essential to pay attention to factors that make businesses successful and potential pitfalls. Taking the industry leaders as an example, it's possible to learn the best practices and approaches, to find out what really appeals to the gamblers and apply already proven methods while planning your business strategy.

Studying your competition will also give you insights about the structure and segmentation of the gambling market, which will help you to decide on your target audience and specifics of your gambling business. Overall, market analysis is going to be an indispensable part of your preparations and understanding your options and where you fit on the market

Expenses and Budgeting

You will need to assess the initial investments you'll have to make and secure the potential sources of financing. Online gambling is remarkable in that, as opposed to most of the internet startups, it doesn't require massive initial investments. Nevertheless, there are inevitable expenses related to registering and licensing an online casino, as well as developing or leasing the gambling platform and integrating games. According to the existing practice, the top expenditures of a gambling start-up on the initial stage are:

  • Registering and licensing
  • Software integration

  • Personnel recruitment

  • Pre-marketing

Further, when your online casino is established and running you need to be ready for additional operational costs on:

  • License renewals
  • Payroll

  • Customer support

  • Marketing

While it may be tempting to use low-cost online casino platform technical solutions, it may not be the best idea in the long run considering the importance of quality software and recognized game suppliers in establishing gambling business reputation and customers' trust.

It's essential to predict and plan your expenses in advance because knowing your targets and limitations will give you a clearer understanding of the strategies and options available to you.

Pre Marketing

Before making any important decisions, you need to conduct a thorough analysis of the online gambling market identifying its niches and trends, existing offers, and the target audience's psychological profile. Knowing the characteristics of your potential customers will help you to decide what messages and themes can appeal to them, which may give you valuable ideas regarding design and features you can implement on your site, as well as the format and style of effective marketing campaigns and advertisements.

Market analysis will also let you learn about methods and approaches the existing market players use to advertise and promote their businesses, and what methods proved to be effective. Insights about target audience segmentation and psychological portraits of different categories of casino visitors, as well as information on the leaders and key competitors in various market segments, can help you to come up with creative and original decisions making your business stand out among the competition.

Law and Legal issues

It's important, before you launch your casino business, to have a clear understanding of laws regulating the gambling industry in the jurisdictions where you are planning to operate. Regulations can imply rigorous KYC checks, casinos' obligations to prevent and mitigate the effects of gambling addiction, preventing access of minors to the gambling sites, as well as measures against money laundering and fraud.

Since it's possible to choose a particular jurisdiction under which your gambling business will operate, there are certain factors worth paying attention to regarding gambling regulations.

Taxation. Gambling-related taxes can significantly vary in different countries, quite steep in some legislations and more lenient in others. It's important to note when the law presumes fixed taxes not depending on the casino incomes. In any case, it makes sense to be sure that your profit margins will still cover operational costs and overheads.

Laws restricting non-residents from playing in the casinos registered under the country's jurisdiction. This is the case in Australia for example. You can register an online casino there but the access to it must be limited only to the country's residents. If you aim for a worldwide audience and don't want national restrictions to get in your way you need to keep an eye on such nuances.

Overall, a choice of jurisdiction can have an effect on many things starting from the formal requirements you must fulfill in order to register a new casino and ending with the level of security and legal protection of your casino.

Licencing

Licencing is an essential step that can determine both the legitimacy and respectability of your casino. The easiest and cheapest way is to license a casino in offshore jurisdictions such as Curacao or Gibraltar. The license can cost around $20k and the policies and regulations, including mandatory requirements and background checks, are quite liberal. An additional benefit is that the licensing process is really quick with the minimum amount of paperwork and bureaucratic hurdles.

In comparison, a gambling license issued in the EU can cost $100k - $200k, and the licensing process is accompanied by stringent background checks and business and software audit. The gambling platform and integrated software must meet European certification standards ensuring a high level of security, personal data protection, algorithms guaranteeing the standard odds and probabilities for specific games, and so on. Additionally, the licensing process can take a long time.

The upside of this is a much higher reputation of the EU gambling license. It can be crucial on the online gambling market inundated with casino sites and gamblers wary of potential scams and software rigged in favor of the house. In this environment, a high reputation EU license indicates that your casino adheres to high standard business practices and features reliable and certified software. In tough market competition, reputation can give you an important advantage, attracting clients looking for safe and trustworthy options.

Reliable Software

In order for your online casino site to be competitive and gain the trust of its visitors, it must run on a reliable platform. Especially, considering the specifics of this business, it's essential to ensure the security of money transfers and protection of user private data. The platform also needs to possess tools and mechanisms for protection against fraud, and the gaming software must guarantee the high precision of odds and probabilities of respective games. A typical gambling platform includes the following modules:

  • User management module
  • Game settings and configuration module

  • Transaction processing system

  • Security and fraud prevention module

  • Analysis and reporting systems

A gambling platform must also provide a standardized interface for game integration. The choice of games is also important. Games can differ in terms of their price, popularity, and reputation of their producers. It's essential that all the games featured in your casino are certified as it confirms the reliability of their algorithms. For example, if the algorithm allows deviation from standard odds, it can lead either to an unfair advantage of the casino or to the possibility of players effectively using this discrepancy to game the system. Another thing to take into consideration while choosing games is the overall popularity of a game, the popularity of the studio producing this game, and whether its genre, theme and visual appearance match your target audience.

The software choice is crucial in terms of your gambling business success. The quality software will ensure your high reputation and safety of your clients, it will keep your business protected from scams and hacker attacks, and reduce the costs of maintenance and customer support.

Payment Methods

To attract the maximum audience a successful online casino must feature a wide variety of payment methods. It may include traditional methods like credit cards and payment processors such as PayPal. Additionally, a casino can allow transactions from various digital wallets and alternative payment systems. Last but not least, a payment option definitely worth including is cryptocurrencies, particularly Bitcoin. This payment method is experiencing quickly growing popularity in recent years due to its high level of reliability, low transaction fees, and the ability to make transactions anonymously.

It's vitally important that all the payment processing components integrated into your casino platform are based on the reliable and tested code and guarantee a high level of transaction and user credit card data protection. It's worth noting that most of the payment processing companies work only with licensed and reputable gambling businesses.

Website

The website is something determining the first impression your visitors will get of your casino and, therefore, it's essential that it has a high-quality attractive design, convenient and easy navigation, and generally comprehensive user interface.

Considering that a significant percentage of users these days use smartphones to access websites, you need to ensure that your site looks well both on laptops and mobile devices. The ideal solution is to provide a smartphone app since it gives wider possibilities of employing various smartphone specific features.

The theme and design of your casino website should reflect the psychological profile and preferences of your target audience, as well as it needs to be original giving your business personality and standing out among the mass of unremarkable standard casino designs.

It goes without saying that registration and verification processes, as well as all the operations, such as money transfers and withdrawals, a user has to perform on the site, should be simple and intuitive.

Domain name

While choosing a domain name for your site keep in mind that it has to be short, easy to remember, and it can be associated with your brand or company name. Presently, there exist top-level domains specifically designated for gaming sites, so it can be a sensible decision to register your domain under one of them. Overall, the choice of the domain name, though it might seem trivial, is no less important than deciding on a brand name since it will play a big role in defining how your casino is perceived by players.

Games and Providers

Among the huge variety of casino games on offer, It's advisable to follow certain principles and rules to make the right selection for your site. The most important thing is to work only with reliable and certified game providers guaranteeing the high quality of their products.

Also, there are more and less popular game studios with different price ranges, and you can decide on which of them you want to choose depending on your budget. One of the infallible tactics is to focus on games traditionally popular among gamblers.

Depending on your target audience you can decide whether high-quality graphics and sound effects will be an important characteristic defining your choice. It's also worth paying attention to the special features offered by different game studios, such as various game themes, games with live dealers, and original and unusual variation of traditional games.

Not in the least, your choice will be determined by your target audience specifics - whether it will be a selection of time-honored staples with conservative design or vivid and futuristic masterpieces defying traditions and conventions.

Web server

With the growing popularity of your site, you may expect increasing web traffic and a score of users playing multiple games at the same time. To be able to handle a large number of visitors a web server hosting an online casino must have a high-speed broadband internet connection and sufficient processing capabilities. Technical requirements for gaming servers are traditionally higher than those for standard web servers due to the high load on the gaming software and the need to maintain multiple simultaneously open internet sockets.

Apart from the ability to withstand the high computational load, an online casino web server has to provide a high level of security and be protected from DDoS and hacker attacks. Naturally, storing a substantial value in the form of players' deposits and their credit card information, a gambling site is an attractive target for malicious actors on the internet. Therefore it's vital that the software running on the server doesn't contain critical vulnerabilities and includes a modern and robust security system effectively neutralizing invasions and malware.

Launch

Right after you open an online casino and at the early stages of its operation, a good practice is to gather all the possible feedback from its users and quickly identify and fix technical and other issues that will inevitably surface on this stage. Also, it's a perfect time to unleash a full-fledged marketing campaign deploying all the prepared instruments and tactics.

The overall success of your gambling business will depend on the effectiveness of this initial stage, making it essential to ensure that the site works without hiccups and glitches, and your promotional strategies are sound.

Advertising and Marketing

Marketing expenses will consume a lion's share of your project's budget, and you need to clearly understand what methods and approaches will be effective in your specific case. Among the existing methods, you can deploy to market your casino are traditional ads, influencer marketing, SMM, and promotion on instant messaging apps, thematic groups, and forums. Additionally, bonuses and loyalty programs can be used to retain existing clients.

Due to the internet specifics, it's important to ensure that your ads are primarily directed at your target audience, featuring on the thematically related web pages. Search engines - with their exhaustive trove of information about users' searches and browsing history combined with sophisticated algorithms capable of predicting their behavior - can provide mechanisms for identifying and successful targeting of internet users most likely to become your casino new clients.

Another important aspect of a successful web resource is to be at the top of search results. This makes search engine optimization (SEO) of your site an indispensable component of your overall marketing strategy. The most well established and effective SEO practice is the site content optimization when you ensure that your site features relevant and original content interesting to your site visitors. Other methods allowing you to increase your site ranking in search engines include referral links, comprehensive site structure and navigation, informative URLs, and good site performance characteristics.

Social media marketing (SMM) and influencer marketing presently play a more significant role in shaping customers' choices and preferences, since internet users spend a substantial amount of time on social networks and messages coming from social media influencers and thematic groups and communities, are perceived by them as more authentic and trustworthy.

Security

Online casinos with their incessant streams of money transactions, user deposits, and a treasure trove of sensitive information, including players' credit card details, are naturally attractive targets for hackers. Successful internet businesses can become victims of DDoS attacks aimed at disrupting their activities. Therefore an effective security system is a must for any respectable casino website.

One of the first steps in creating a robust and protected system is to ensure that all the software running on the server is up to date and doesn't contain any unpatched critical vulnerabilities. It's advisable to conduct a comprehensive audit of the installed software and conduct penetration tests in order to see if tactics and methods traditionally employed by hackers work on your site.

Among effective attack vectors can be weak user and administrative passwords, therefore the site must contain system policies ensuring that only strong passwords are allowed, as well as enforcing password changes after a certain period of time.

It goes without saying that a server hosting a gambling site must be equipped with an effective combination of hardware and software solutions designed to prevent and mitigate hacker and denial of service (DoS) attacks, as well as exclude the possibility of the server being infected by malware or unauthorized access to sensitive information.

White Label and Turnkey Solutions

Building a casino from the ground up, going through bureaucratic hurdles of registering and licensing can be a daunting and time-consuming process. Not everybody can afford to spend such a substantial amount of time, and there are simpler ways to ensure a quick start of a full-fledged gambling business.

White Label is a business approach implying a casino business owner leasing a fully equipped and licensed casino platform and running it under his own brand. This approach allows to dramatically reduce the time needed to set up an online casino, as well as prevent typical mistakes those new to gambling business are bound to make.

It's also possible to quickly become a casino owner by buying a turnkey ready licensed casino business, and many companies specialize in building online casinos for sale. Such solutions made by professionals can also guarantee higher quality compared to the "homespun" casino solutions.

Conclusion

Building a successful online gambling business requires meticulous planning, professional technical implementation, and effective marketing. Each aspect is essential for success, and it's particularly challenging to establish a beachhead on the tumultuous and competitive online gaming market. Still, paying attention to crucial details, such as quality software and security, maintaining a good reputation, and adding originality and novelty to time-honored and proven practices, it's totally possible to turn an online casino into a thriving and lucrative business.

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