The chances are that you have heard or read about how much money is pouring into the online casino industry each year. The talk about how the business will keep growing in the coming years has probably reached many ears, and the interest in the gambling industry might be higher than ever. But how much does it cost to open an online casino? That is what we will find out in this article.
We’ll tell you all about the different costs that include:
- Software Providers
- Payment Providers
- And Much More
How Much Do You Think It Costs To Open An Online Casino?
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Question 1 of 1
The Cost Of Registration Of A Legal Entity
In order to be able to start an online casino business, you will need a legal entity. This is used in order to obtain important services such as payment services and a bank account. It is also necessary in order to apply for a gambling license and to make agreements with software providers.
Generally, the gambling companies choose to have their legal entity in the same country where they will be applying for their online gaming license. This makes the process more smooth.
- Depending on where you decide to have your legal entity, the costs can differ from 0 to up to around 3000 dollars.
The gambling license is the second cost and the first massive one you will face when starting an online casino. Depending on where you want to operate your business, this can cost from 15.000 to over 100 000 dollars per year.
However, the license and annual renewal costs are generally around 15.000 – 50.000 dollars per year. The most common jurisdictions for licensing are Curacao, Malta and Gibraltar. The MGA casino license is the most costly of these alternatives but also the strongest recommended one.
To apply for a gambling license, you will need to have a legal entity registered. The application process can take from a few months to over one year. After the license is granted, you can start your casino business.
Note that the gambling license is not something that you can pay for and then forget about. The license needs to be renewed every year, and you will also be subjected to audits from the gaming authority.
The third cost you will need to consider is the software that will power your online casino. This can be bought or leased,d and the price can differ depending on which company you choose. You also have the option to develop your software, which is generally not recommended since it is both time-consuming and potentially costly.
The most common way of powering an online casino is by using a software platform from one of the big providers such as Microgaming, Playtech or NetEnt. These companies have been in the business for many years and their products are used by hundreds of casinos.
The price for using their software can differ, but it is generally in the range of 10 000 to 50 000 dollars per month, depending on the monthly revenue. Some smaller providers might charge less, but their products are usually not as good or as well-known.
Another essential cost you need to consider when starting an online casino is the cost of the payment providers. These companies will process the payments for your casino and usually take a small percentage of each transaction.
The costs can differ depending on which country you operate in and which payment providers you use. In some countries, you might only have a few options, while in others, there might be dozens to choose from.
- Generally, the costs are around 2-3% of each transaction. So if you have a casino with an average turnover of 1 million dollars per month, you can expect to pay 20-30 000 dollars in fees to the payment providers.
The better the payment provider, the higher the fee. So if you like to promote yourself as a fast payout casino, this is the price that you need to pay.
Website and Application Creation
The following cost you need to consider is creating your website and mobile application. This is generally not very expensive since many companies offer ready-made solutions.
The price for a ready-made solution can be anything from a few hundred to a few thousand dollars. If you want something custom-made and developed only for your casino, then the price will be higher and can cost up to 50.000 dollars.
Hosting and Infrastructure
The following cost you need to consider is the hosting and infrastructure for your online casino. This is generally not very expensive since many companies offer ready-made solutions.
The price for a ready-made solution can be anything from a few hundred to a few thousand dollars. If you want something more custom-made, then the price will be higher.
Generally, the website and mobile application cost around 1000-5000 dollars.
Salary and Maintenance
A vital cost you must consider is your staff’s salary and your casino’s maintenance. The salary will depend on the number of employees that you have and their experience. A starter team would consist of between 10 and 20 people, including designers, web developers and projects managers, support agents, anti-fraud specialists, sales and marketing specialists, affiliate managers, payments specialists, content writer/copywriters and an accountant.
The accumulated amount for salaries will also depend on the location. In Europe, the cost may go as high as 600.000 dollars a year (no taxes counted), whereas in other parts of the world, 100 – 300.000 will do the job.
The maintenance costs will depend on the size of your casino and how often you need to update your software. Generally, the costs for staff and maintenance are around 1000-5000 dollars per month.
Then there are white solution providers that can take care of all of this for you, such as SoftSwiss.
The last cost that you need to take into account is marketing. It is tough to estimate the marketing cost since it depends on what kind of marketing you will be doing and for what market you will be doing. It can cost anywhere from a few thousand to a hundred thousand dollars to market an online casino.
A marketing strategy for online casino usually include things such as creating SEO content and affiliate marketing. It can also include marketing on websites, TV and radio.
- You can make it easy for yourself by including a sick marketing offer such as no deposit free spins with no verification, but that might turn out expensive if you’re unlucky or if the free spins offer end up being abused
In addition to the money you will need to spend on costs, you also need to have a reserve of money to pay players. The license usually decides the minimum amount and may vary from license to license. The amount will be anywhere from €100.000 and up.
In conclusion, the costs of starting an online casino can vary depending on which country you operate in and what kind of services you want to offer. Generally, the costs are around €500.000 to €1.000.000.
Of course, you can also start an online casino with less money, but then you will need to be more careful with your costs and might not be able to offer the same services as a casino with more money to spend.
It is also important to remember that the potential profits from an online casino are very high and that if you can start a successful casino, the costs will be more than covered by the revenues. So if you have the financial resources and business acumen, starting an online casino can be a very lucrative.
White Label Casinos – A Cheaper Option?
Over the last few years, so-called White label casinos have been an alternative to stand-alone casinos with their gaming licenses.
What is a White label casino?
A white label casino is a turnkey solution for those who want to start an online casino business. The providers of this service take care of everything from the registration of a legal entity to applying for and being granted a gambling license. They will also provide you with all the necessary software, payment solutions and support needed to run a successful online casino business. The only thing you need to do is to market your casino and attract players.
The big advantage with white label casinos is that you can get started with your business almost immediately since everything else is taken care of by the provider.
The downside of white label casinos is that you will have to share your profits with the provider and will not have complete control over your casino business.
How Much Does It Cost To Start a White Label Casino?
The costs of starting a white label casino can vary depending on your chosen provider. Generally, the set-up fee is around 10 000 – 50 000 dollars, and you will also have to pay a monthly fee of anywhere from 500 to 5000 dollars. In addition to this, you will also have to pay a percentage of your profits to the provider.
The costs of starting your White label casino might be lower, and the process might be more straightforward, but consider that you will have to share your profits with the provider and that you might not have full control over your casino business.
In conclusion, the costs of starting an online casino can vary depending on which country you operate in, what kind of services you want to offer and whether you want to start a stand-alone casino or a white label casino. Opening up an EU online casino won’t cost you as much as opening up a US-licensed online casino for sure.