Online gambling experiences an unprecedented boom generating lucrative revenues and stirring the imaginations of businessmen and investors alike. You definitely want to jump right in but before taking a plunge make sure you have figured out the essential things you need to know.
We will guide you through the basic steps of the online casino business.
Gambling has always been a surefire way to make hefty profits. Nowadays, thanks to the rise of technology, the entrance bar is lower than ever before, and this is the perfect time to jump on the bandwagon. According to the H2 Gambling Capital market research agency forecast, the industry is about to experience explosive growth, with gambling revenues in 2020 doubling compared to 2018.
Among the teeming crowds of iGaming newbies, it's sensible to remain levelheaded and reasonable. To succeed in this business you need to meticulously plan all your moves in advance. You need to put in efforts, developing your business prowess, wisdom, and clairvoyance.
We are ready to assist you, tackling the hurdles and complex issues you may face getting your business off the ground. With our vast knowledge and experience in developing online casinos, we are in a position to offer the best expert advice. Submit the form, and we'll get in touch with you in a minute.
Here, we will discuss the most important aspects you need to consider before heading out to the tempestuous battlefield of online gambling. The following is a step by step guide on how to avoid common pitfalls while launching an online casino.
The gambling industry is emerging out of the gray area in many countries, as governments see the advantages of the regulated online gambling market. Together with the breakneck speed of technological advances, this creates a unique moment of opportunity for entrepreneurs and investors.
The recent health crisis and worldwide quarantines and shutdowns inadvertently created an opening for all kinds of online enterprises. Specifically, online gambling being able to adapt to the new reality experienced a boom, with more people turning to the internet for entertainment.
The fact that all kinds of real-life sporting events being put on hold or canceled unquestionably delivered a blow to the online betting industry deriving a hefty share of its profits from sports betting. On the other hand, this sudden vacuum was promptly filled with online sports and live streams. Cooped in their homes people now look at the internet as an opportunity to socialize. As a result, all kinds of web-based entertainment outlets saw a sharp increase in their turnovers.
Gambling markets differ from country to country, and it's better if you home in on some specific target and concentrate your efforts on it. This initial choice will eventually determine your subsequent steps and strategy. The most important things to consider are the following:
There are two types of gambling markets - white and black - depending on how the respective countries come about regulating the industry. White markets emerge where the governments allow online gambling, as long as it follows prescribed rules and restrictions. Black markets refer to illegal gambling activities in countries where online gambling is officially banned.
A special case - so-called gray markets - refer to the situation when a country doesn't have any legal framework regarding gambling or the regulations are inconsistent and confusing. Case in point, a common situation falling in this category is when the government officially disapproves of gambling but looks away when its citizens visit online casinos registered abroad. Another typical source of confusion is when gambling-related legislation differs in different parts of the country.
While it may be tempting to delve into the gray area, we recommend to play by the book and stay in the areas where the rules of the game are clearly defined. Following all the pesky regulations may feel arduous, but on the other hand, you are guaranteed that your business won't be unexpectedly closed for a reason you won't even understand. Speaking of this, when you come about licensing your online casino make sure that your license is valid in the jurisdiction where you are going to operate. It's not always the case.
Be aware that you need to be on good terms with banking institutions. Due to their strict KYC and AML policies, financial organizations normally look askance at operations in places notorious for the proliferation of illicit activities, including various scams and money laundering.
Another potential obstacle is when banks in specific countries are not allowed to process transactions related to gambling. Keep this in mind when you decide what payment processing systems you are going to introduce on your site. It will make perfect sense to offer those of your players who run into this banking-related ordeal options to circumnavigate the impediments of traditional payment methods.
A crucial aspect of your online casino business success is promotion and advertisement. You need to plan in advance what marketing strategy you are going to deploy. There may be certain complications related to restrictions on gambling ads. Be sure that your site is user-friendly, intuitive, and well optimized for search engines. We'll discuss this topic in more detail later.
When you assess your target market one important facet to look into is the demographics of your potential players. Their age, gender, regional customs, how much money they make - all these elements will define their gambling habits and preferences. Take a closer look at the public sentiment toward gambling in general, as well as what payment methods are popular there.
You may want to take into consideration the behavioral patterns of your clientele. Depending on the average income, they can wager small or big, visit casinos frequently, or once in a while spending a lot of money. Their preferred activities can also differ. This will not in the least define how you come about running your gambling business.
Particularly, you will want to have a clear view of your target audience's habits and preferences when you establish your site policies and requirements. This also will help you to choose the optimal approaches to attracting new players and stimulating your customers' interest.
You can learn a lot by observing your competitors. Pay attention to the selection of games and entertainments they offer, their advertisement and promotional strategies such as bonuses, tournaments, loyalty programs, what payment methods they use, in other words, what makes them successful. This will also give you invaluable insights about your target audience, which will undoubtedly help you to sculpt your own strategy.
At the same time, you'll see the areas of unfulfilled demand, something that your rivals might have overlooked. Seeing this opening you can home in on it, carving your own market niche and offering something exclusive.
You have to assess the initial sum you'll need to set up and license your business, acquire the necessary software, and take care of technical aspects. The initial cost will depend on the chosen jurisdiction so you may want to select the place of your operations in accordance with your budget. You also need to consider the regular expenses such as taxes and fees.
You need to clearly online your business strategy, all the steps you are planning to take. A solid business plan will make your budding enterprise attractive for potential investors, helping you to raise the initial funds. Apart from that, you will need to have a business plan outlined before you apply for a gambling license.
So what should a business plan include?
First things first, state your objectives, what your business is trying to achieve? Describe the market niche you are planning to fill, how you are going to come about it, what marketing strategies you intend to deploy. Give a rough estimate of the revenues you expect.
Describe the corporate structure of your business. List your partners, stakeholders, and the degree of their involvement, how many employees you are going to hire. The legal status of your company can vary depending on your strategy: it can be a partnership, corporation, or LLC, which in turn will define the degree of your financial responsibility.
Make an outline of the market you target and specify how exactly you fit in. Describe your marketing strategy, your niche, pricing, target audience, and advantages over the competition. Make sure your breakdown analysis shows both your knowledge of the lay of the land and your strengths.
Draw an estimate of the revenues your business can generate in the following three years. This will let your potential investors know what they can expect, as well as it will help you assess over time whether your enterprise is following the trajectory of success you anticipated.
Provide a detailed breakdown of the financial aspects of your business, such as expected expenses and profits, balance sheet, cash flow, sources of financing, and asset structure. It will demonstrate the meticulousness of your planning, with reasonable and realistic expectations in mind, as well as your prowess in dealing with numbers and calculations.
The approximate sum you'll need to have at your disposal to get an online casino business up and running is $100k. Now let's see what it will consist of.
Before registering a business, you need to decide on its corporate structure. It can be a limited liability company (LLC), partnership, or corporation. Not in the least, your choice will be defined by the jurisdiction of your target locale.
Most often online gambling businesses are registered as LLCs, which can limit the amount of damage for shareholders if their companies go bust and their assets cannot cover their debt. With LLC the financial responsibility of shareholders is limited to the size of their shares.
Sometimes regulations will compel you to register a number of companies, for example, if the place of your operation is different from your licensing jurisdiction, as well as if you have subsidiaries in different countries.
The intrinsic cross-border nature of online gambling pits casino operators against the complexities of intentional laws and regulations of different countries. This can be astoundingly complicated, and many gambling companies employ a well-established practice of delegating the legal quandaries to the third parties specializing in navigating this maze of jurisdictions and laws.
Our company provides legal services and consultations covering the following aspects:
Licensing is an essential step while launching a gambling enterprise. The licensing jurisdiction is an important aspect to consider as it will define the extent of your license application as well as its credibility. While popular gambling licenses are acknowledged worldwide some countries such as the UK will require you to be licensed by their own regulator.
The licensing process can be long, complicated, and costly but it undoubtedly is worth the effort since the consequences of running a casino without a license can be utterly serious, starting with penalties and other legal ramifications you might face for operating an unregistered gambling facility.
Apart from fines and the possibility of a shutdown, without a license, you'll have problems opening a bank account, as well as cooperating with the quality content providers and payment service operators. Financial institutions work under stringent KYC and AML requirements, and gaming software producers value their reputation choosing to avoid sketchy and unreliable entrepreneurs.
Overall, a license endows you with a level of respectability in the gambling business community, allowing you to successfully network, establishing valuable connections, staying up to date with novel trends and cutting edge technologies, which in turn is vital for growing your business. You want to establish your reputation and be in touch with the leading professionals in the industry.
Having a license is also essential for expanding your client base since it's normal for the players to check if the establishment they are going to play in is licensed. Scams are rampant on the internet, and gamblers want to be sure that their deposits won't just disappear. The license confirms the legitimacy of your business, as well as the fact that the software on your site, including payment processing systems, meets the industry standards.
Things to consider while choosing the licensing jurisdiction
If you are new to the market with little experience it would make sense to choose a jurisdiction with less stringent licensing requirements, lower price, where the licensing process takes less time. Subsequently, after gaining some influence, you can obtain a more acclaimed license giving you wider access to the international markets.
Curacao is considered relatively cheap and simple in terms of gambling licensing while obtaining a license in Malta is more expensive, incurring more complicated requirements, the larger amount of required paperwork, and it takes longer though, on the other hand, a license issued by Malta Gaming Authority is more highly recognized granting you more prestige in the gambling business community.
Depending on a jurisdiction you can receive a license covering all types of gambling or you may be required to license each kind of gambling activity - slots, card games, betting on sports - separately. There may be other nuances in regard to gambling regulations, depending on the place. For example, in some jurisdictions, poker is not considered gambling but rather a game which outcome is determined by players' skills.
The license cost, taking into consideration the renewal fees, can be a key factor determining your choice. The cost of licenses in different jurisdictions vary substantially, besides, you need to consider whether you will be required to obtain a separate license for each type of gambling, keeping in mind how many different types of gambling activities you plan to offer.
The choice of your licensing jurisdiction will also define the taxes you'll have to pay. There may or may not be specific gambling targeting taxes. Or the income tax can be higher for gaming-related enterprises. In any case, the overall amount of money you'll have to pay in taxes is another important factor to consider while estimating your expenses and choosing a jurisdiction.
Licensing itself is typically a convoluted process requiring you to compile a substantial amount of paperwork. It's important to stress that due to the mandatory background checks and the involvement of legal institutions of many countries, licensing can take a long time.
It's likely that timing can be a factor when you decide on your licensing jurisdiction. Curacao offers a faster, more streamlined process when you can get your license in 6 weeks. It can be much more attractive than licensing in Malta taking 6 months but, once again, the latter can grant you a higher status and a veneer of respectability. Besides, Maltese license is more widely recognized giving you access to a larger number of gambling markets.
The complex and grueling nature of licensing compels entrepreneurs to hire specialized legal services delegating to them the paperwork collection process, as well as figuring out fine points and subtle nuances of international and local regulations. This also helps to avoid the inevitable mistakes that can stall the licensing process indefinitely.
The most popular licensing jurisdictions
Hire a team. As gaming is gaining popularity, the number of qualified industry professionals is consistently growing making it easier to find the right people for your company. Remember, your business performance will depend on each one of them, and your choice will determine whether your enterprise will eventually succeed.
One of the key decisions you'll have to make is choosing a gambling site platform. You look for something reliable, flexible, and scalable. Plus, take into account the credibility of your software provider, be sure the solution he offers comes with technical support and customizations. The platform choice will determine many aspects of your online casino: Will your players' experiences be smooth and not ruined by glitches? Will you be able to expand the platform over time adding more functionality? How much platform maintenance will cost you? The cost factor also comes into play since you'll have to decide on something you can afford, finding a compromise between the quality and the price.
An online casino platform can come in the form of the core functionality you can build upon. In this case, you are not constrained by the platform's design and free to realize your own vision of a gambling site. On the other end of the spectrum are prepackaged turnkey casino solutions that don't allow much flexibility in terms of customization though, on the other hand, they can save time. Overall, a turnkey solution is a way to go if you want to simplify the development process.
We'd like to advise you against cheap and shoddy software you might be tempted to buy trying to reduce your expenses. The casino site platform is the key component of your whole enterprise, and its quality not in the least will determine whether it will succeed or fail. See the software quality as the primary factor in your decisions.
Your gambling site must be deployed on a reliable hosting capable of withstanding a high load. The response speed is crucial, and high latency can quickly lead to players losing interest. The speed of reaction is also an important criteria the search engines will use rating your site.
Think of localization. Your site might attract gamblers from all over the world, and you don't want the language barrier to become an obstacle preventing you from getting new clients.
Make sure that your gambling platform is scalable and allows third-party integrations. Over time you'll need a number of instruments, such as:
You want to make sure that your site is intuitively understandable and easy to navigate for your players. Registering an account, making deposits, browsing through the offered selection of games and entertainments - everything should be simple. Any sort of confusion can lead to disappointment, ruining the thrill of the online gambling experience.
The placement and appearance of the key interface elements should be logical and commonly recognizable. Arrange the list of your games in an order that would seem the most obvious and convenient to the players, it's even better to split them into categories according to games' common characteristics and theme. In other words, make it the way your clients could navigate your online casino without consciously thinking about it.
Make the players' profiles highly customizable, it will make the gaming experience feel more personal. In terms of marketing and player engagement strategies, personalization is a must-have feature. This is something that will make players return to your site again and again.
Add more dynamic to your site by displaying real-time information, such as active games, jackpot size, names of current winners, as well as other announcements and promotions. The information updated in real-time can be placed on a ticker tape or one of the site widgets.
One factor crucial for user engagement is the site design and visual attractiveness. Make your site stunningly beautiful and captivating with your own unique style. Be meticulous cleaning up visual glitches and imperfections. The entrancing look of your online casino should induce a suspension of disbelief casting players into the realm of unfolding magic.
Online gambling sites, due to the circulation of money in them, are attractive targets for hackers. There's also a category of internet users seeking ways to game online casinos. A widespread practice is users registering accounts just in order to get one-time bonuses, which they withdraw without playing in the casino. Players registering multiple accounts are also an issue. As a licensed gambling enterprise you have a responsibility to introduce measures and mechanisms designed to prevent fraud. Most jurisdictions require online casino businesses to conduct thorough KYC checks, particularly to prevent users below legal age from gambling.
The protection of your user accounts is your top priority. Strong password policies, two-factor authentication - this is the required minimum of measures you must implement to ensure security. To boost your security even more, you can equip your site with an intellectual fraud prevention system flagging suspicious patterns in users' activities.
One of the advantages of launching an online casino now is that the market is currently replete with spectacular game content. The industry is not short of game developers constantly competing with each other, and the quality bar for casino games is lifted very high. It goes without saying that game content is the most essential component of your online casino.
Keep in mind that gamblers' preferences differ depending on the region. It would be a good move to introduce the items most popular locally, without sacrificing the variety. Notice what themes and playing styles are typical and widely accepted in your chosen locale. Still, make sure that your gambling site boasts as wide a choice of games and entertainments as possible.
No matter the local preferences, there are the must-have casino staples, such as poker, blackjack, roulette, Sic Bo, and other classic games that should definitely feature in your casino. Do your best making available the most widely recognized variations of these games.
You can delve into the latest fad of online gambling - live dealer casinos - where games are streamed live from the real casino interiors invoking an atmosphere of a genuine brick and mortar casino. Live dealer games made possible by modern streaming technologies and high bandwidth internet connections are incredibly popular today, including and not limited to poker, blackjack, roulette, bingo, lotteries, and money wheels.
Keep the selection of games in your casino as wide as possible. This will keep your visitors constantly engaged, always offering them something new they haven't tried yet. Be aware of anything new and hot on the gaming market and keep your game collection up to date.
Stay in touch with leading game producers, always keep an eye on the latest thing they have on offer. This way you guarantee that your players don't miss out on the newest trailblazing items and that your offering won't get obsolete. Get credibility as the one keeping up with trends.
To simplify the game content management process you can use game content aggregators; this way you can avoid the hassle of signing and renewing contracts with each game developer separately, which takes time and effort. Sign a single contract with an aggregator and get access to the content of multiple top game producers.
Payment processing is a crucial part of the players' experience and you want it to be as convenient as possible
Implement a selection of payment processing methods paying particular attention to what payment methods are popular in the region where you operate. Due to the worldwide nature of online gambling, make it possible for players to use different currencies.
Keep in mind the possibility of banking restrictions on gambling transactions. Many users prefer to use cryptocurrencies to stay unidentified or to avoid complications that may arise with gambling-related transactions in some jurisdictions. Make sure your casino has the cryptocurrency payments option.
To avoid the hassle of dealing with technical nuances and specifics of each payment system separately, you can use payment method aggregators allowing you to integrate a selection of popular payment processing methods at once.
The key objective of marketing is attracting new players. No less important is to keep them engaged after they've landed on your site. Let's take a look at the popular marketing approaches.
The gist of this tactic is that you use popular gambling related resources, such as channels and blogs, to promote your online casino. Two key advantages of this method are: First, the promotion looks authentic and sincere, as opposed to paid ads, and it comes from the sources people trust. The second advantage is that it automatically narrows the focus on your target audience, people interested in gambling.
Before striking a deal with an affiliate partner, you might want to learn more about the affiliate partnership models ensuring that neither party feels being taken advantage of.
Cost per acquisition (CPA) model presumes that you pay a fixed fee for each user landing on your casino page via an affiliate site. As a necessary condition, the visitor has to register and start playing on the site; this way you are guaranteed that the traffic directed your way is not random.
With this partnership model, you pay the affiliate a share of the money that the players attracted through the affiliate program spend in your casino.
An affiliate partnership can also use a combination of the aforementioned models.
A good way to whet the newly arrived players' appetites is by offering them bonuses. Welcome bonuses are a common practice that can be supplemented by free spins, deposit and reload bonuses, etc.
Make sure though that you don't let players withdraw bonuses without playing, otherwise, you just invite bonus abuse. Normally, bonuses come with a condition that players should wager a certain percentage of their deposits several times before they can withdraw bonus money
Be aware that bonus abuse is a common practice plaguing gambling sites, and rogue players employ increasingly more cunning and sophisticated techniques to game the system. Be sure that your wagering requirements - rollover - are consistent and clearly outlined. Your security system should also be able to prevent users from registering multiple accounts.
Let regular players know that you appreciate their loyalty by offering them special privileges and benefits. This way you'll ensure that they will continue spending time in your casino.
Designate players that wager big and spend a lot as a special category of VIP clients, showering them with perks and rewards. VIP players can be responsible for a major part of your overall profits, so make sure they get the treatment they deserve.
One of the effective methods to keep players motivated is making them compete with each other. Slot tournaments with participants striving to get the maximum score and win the prize are a great way to breathe new life into the familiar entertainment. Events like this also create a lively animated atmosphere giving an additional appeal to your gambling site.
Make your players' experiences personal and unique with fully customizable profiles, avatars, ratings, and individual themes. Players' customizations is a common practice in gaming these days, and your site users will expect from you no less.
It's important for your site to have 24/7 customer support able to quickly resolve the most typical players' problems. Fast and relevant feedback will make a positive impression on your clients, mitigating whatever inconveniences they may run into. Provide special treatment for your regular and VIP customers. Make sure that your customer service is available in as many languages as possible.
Launching a gambling enterprise on your own can be difficult, with all the legal nuances of licensing and business registration, technical complexities of platform development, and the hassle of game content integration. Not forgetting the security, payment systems, KYC requirements, and background checks. The ridge of looming obstacles may seem formidable, indeed.
You can make this process easier by delegating the bulk of the problems to experts. Big Game Solutions specializes in consulting and assisting fledgling gambling companies. We have vast expertise in legal and technical aspects of online gambling and maintain ties with leading game content producers. Our legal specialists will help you with licensing, and with our turnkey online casino platform, you will get up to speed in no time.
Contact us to learn more about our offer. We can help get your gambling enterprise off the ground.