Today, the iGaming industry is big business, and if you happen to know all the ingredients needed to start an online casino business, you can combine them to create a recipe for success!
Not sure how to start a casino online? Casinnovate can help provide you with this useful 8 Steps guide and knowledge you need to take your first steps into the internet gambling world.
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Online gambling is a vast marketplace that increasingly gathers the attention of a higher number of users. According to ReasearchAndMarkets, the value of the global online gambling industry is expected to reach almost $90 billion by the end of 2023.
With its constant state of growth, it is no surprise that entrepreneurs interested in this field are in continuous expansion, but it is a double-edged sword: a growing industry offers more opportunities, but it is also set to be highly competitive. Creating a successful online casino is a hard task that requires significant investments. To mention some of the points you should keep in mind if you want to start a casino business:
- High costs
- Licenses issued by target countries are mandatory
- The gaming content you provide should be of high quality and engaging if you want to stand out
- You’ll need to stay updated and use the latest technologies
- You need to design successful marketing and retention strategies to stay competitive in the industry
Competitiveness is higher today, especially because solutions like white labeling and turnkey casino software make it easier and less expensive for entrepreneurs to enter the market.
Keeping all this in mind, we will provide you with all the information you need: enjoy our 8-step guide on starting your own online casino.
Step 1 – Discover Your Target Market
Online gambling is a global industry. However, this doesn’t mean that when you open an online casino you should target players around the world. On the contrary, it’s often best to focus on one major market first, and expand your reach only after you’ve established a solid foothold in your initial targeted region.
Choosing a target market is one of the most important initial steps when starting a casino. The reason is that it will help you determine:
- What license you need
- Who your competitors are
- What size budget you need to operate in the region
Choosing a target market to start your online casino involves several steps. Let’s dive deeper into the topic.
Choose a region
As you will see in the table below, the online gambling industry is growing globally. But licenses and regulations are not global: they differ within countries and sometimes even cities, and this plays a pivotal role in choosing a target market for a new casino business.
Table: Online Gambling Revenue Around the World
| Region | Revenue (2023) | Source |
|---|---|---|
| North America | The commercial gaming industry in the U.S. reached $5.39 billion in July 2023. After the first seven months of 2023, the aggregate revenue from traditional casino gaming, sports betting, and iGaming was $37.91 billion. The combined revenue from online sports betting and iGaming increased by 25.2% year-over-year in July. By the end of July, the combined revenue from casino slot machines and table games totaled $28.97 billion. Revenue from sports betting and iGaming continued to expand, with commercial sports betting revenue reaching $5.46 billion year-to-date and iGaming revenue standing at $3.45 billion year-to-date. | American Gaming Association |
| Europe | Over 41% market share of the global online gambling market valued at USD 63.53 billion in 2022. This would roughly translate to around USD 26.05 billion for Europe in 2022. | Grand View Research |
| Asia Pacific | Significant growth anticipated, with China, India, and Japan being major revenue-generating countries. | Grand View Research |
| South America | The Latin America Gambling Market size is projected to grow at a CAGR of 18.4% during 2022-2028. The market is experiencing significant growth due to transforming lifestyles, rising purchasing power of customers, growing internet penetration, and the emergence of online gambling websites. | PRNewswire |
| Africa | At the end of 2022, the African gambling market was worth approximately $2.2 billion for the online sector alone. This number is expected to increase by the end of 2023. Key markets within Africa include South Africa (expected to surpass $2.3 billion by 2023) and Nigeria (accounting for around 7% of Africa’s gambling revenue in 2022). Kenya is also a leading market in the region with an annual gambling revenue of up to $300 million. | Gambling Insider |
White, Black and Grey Markets
Choosing regulated markets – also known as “white markets” – is the best choice if you want to start a sustainable business. These markets will require you to have licenses released by legitimate regulators. Not all markets are equal: along with white markets, there are also the so-called gray and black markets.
Gray markets are those markets that don’t provide licenses, but don’t prohibit players from using international websites. In this sense, there’s nothing illegal with targeting gray markets, but business owners need to remain constantly vigilant.
Black markets must be avoided: in these markets online gambling is prohibited, so it is important not to target them.
Learn about your target audience
Once you choose your primary market, you’ll need to analyze it to determine:
- How many potential players are in the market
- The average age and gender of players
- The average salary of players and how much disposable income they have
- What type of gambling activities are the most popular among your targeted audience
- What the most popular types of payment options are for deposit and withdrawal and the preferred currency
- How the average player access online gambling
- Any common gaming, playing, and technology trends
Study your competitors
You’re a small fish in a massive ocean. The competition in the online gambling market is huge and it only becomes bigger with more iGaming sites launching every year.
Back in 2013, a report from the National Center for Responsible Gaming stated that according to the American Gaming Association, nearly 3,000 Internet gambling sites across the globe offered wagering on casino games, sports, poker, bingo, lottery and other games.
Now, nearly a decade later, with gambling legal in over 85 countries, there are thousands of more sites, 4,000+ of which are active white label operators. Needless to say, studying the strengths and weaknesses of your top competitors who’ve already established their brands in your desired market, is vital to your start-up getting off the ground.
With insight into your competitors’ operations, you’ll have the knowledge to design a brand that not only appeals to your targeted audience, but will keep them returning.
Step 2 – Create a Business Plan
Before you start an online casino, you need to create an actual business plan. This plan is integral to your operation to provide you with a clear strategy to help you understand how much capital you’ll need for your initial investment. It’s also integral because it will be necessary for you to have this plan laid out when you apply for a license or if you wish to attract investors.
The following are the main sections that you’ll need to outline in your plan.
Purpose of business
- Describe the goals of your operation
- Explain the organization of your business
- Outline the needs of the market you plan to target, including providing an analysis of the market
- Outline your business’ sales and marketing approach
Corporate structure/management
- Outline the corporate structure of your business (e.g. partnership, corporation or limited liability corporation)
- Provide information on stakeholders
- Provide information about the key persons in your operation, including staffing projections
Market analysis
- Explain how your business fits into the industry landscape
- Show the demand for your gambling product or service
- Provide an analysis of the target market and industry trends
- Outline of pricing plan and budget for marketing, detailing how you will market your brand and what marketing channels you intend to use
Revenue projections
- Work out revenue projections for the first three years (minimum) of operation.
- Include expectations of what your company should be able to achieve
Finance
- Outline your financial plan
- Provide an estimation of all the numbers, including projections of annual income, personal financial contribution, break-even worksheet, balance sheet, and cash flow statement projections.
Establish a corporate structure
To run your casino, you’ll need to establish a local business. Usually, entrepreneurs who want to enter the iGaming industry choose limited liability corporations.
Sometimes, it might be required to establish more than one company, in order to be compliant with different regulations or to cooperate with third parties – for instance, payment processing firms – located in different jurisdictions.
Also, part of knowing how to launch your own casino internationally will require you to navigate restrictions and requirements in a number of countries, which can make business operations even more complex. This is where employing the expertise of third-party jurisdictional services can be very handy, as they can assist you in ensuring your gambling operations remain compliant across different regions.
Consider the staff you need to hire
Opening an online casino requires staff. The best online casino company is one that is run with a team of professionals, all of whom are skilled at specific tasks to ensure a smooth, secure, compliant, criminal-free, and profitable gambling operation. Here’s a look at some of the specialists you’ll need:
Where can you find specialists to hire?
One of the best places to look for talent is in the licensing jurisdictions where you intend to apply for a license. Many jurisdictions like Malta, Curacao, Alderney, and Gibraltar have thriving iGaming sectors and are a hub for the types of specialists you need.
Step 3 – Understand Your Budget – Gather Funds
One of the most common questions new entrepreneurs to the iGaming industry ask is: how much does it cost to start an online casino? The short answer is it costs hundreds of thousands of dollars. Costs vary, and some solutions – like white labeling – tend to be less expensive.
Nevertheless, every aspect of starting an online casino business costs money. For this reason, it is vital that once you’ve looked into how to open an online casino, you focus on how much capital you require to start a casino.
Do not make the mistake of planning your budget after setting up your online casino site. Plan it before. As a start-up, you need to know that your costs will be higher in the beginning because you’ve yet to earn the trust of players and the industry. A relationship must be built.
Gather capital
As is the case with just about everything in the iGaming industry, initial investment and operating costs vary across markets. Therefore, the amount of funding you have will greatly influence your decision on where you want to set up a virtual shop.
When gathering capital, you need to calculate the approximate budget you will require to cover the various aspects of your business operation, including:
- Gambling license (application, fees, taxes, renewal, etc.)
- Business registration
- Software setup
- Staff
- Marketing
- Operating expenses
Essentially, opening an online casino results in two types of expenses: pre-launch expenses and after-launch expenses.
Table – Online Casino Expenses
| ONLINE CASINO EXPENSES |
|---|
PRE-LAUNCH EXPENSES
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AFTER-LAUNCH EXPENSES
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The above-mentioned expenses and percentages are meant only to provide you with an overall general example. However, as you can see, percentage wise, the pre-launch expenses are higher than the after-launch expenses, which are more about maintaining what has already been created.
That being said, remember that every jurisdiction has its own features and sets of rules and you might not be able to afford every jurisdiction. Stick to what you can afford, even if the jurisdiction you pick isn’t your first choice. There’s always room to grow later.
Finally, in general, it is often thought that for a new company entering the iGaming industry for the first time, the best option is to create a budget for at least your first three years of operation.
Step 4 – Decide on the Content You Want for Your Online Casino
Another major step of the process is to decide what type of content (gambling entertainment) you want to provide your customers. Your business needs to be clear on what it can deliver and it is important to emphasize the diversity of your content.
Customers want to know exactly what they can play and on what device they can play it. This means that your site needs to have the most exciting and popular content as well as support effortless integration.
Popular iGaming content offered at today’s successful online casinos include:
- Slots
- Poker
- Table & Card Games – Blackjack, Roulette, Baccarat, etc.
- Other Casino Games – Keno, Video Poker, Scratch Cards, Arcade
- Live Casino
- Bingo
Some online casino operators will even go that extra mile and offer a sportsbook and virtual sports betting as well.
Of course, you don’t need to (and shouldn’t necessarily) offer everything. It’s important to know what is available to you and then choose the content that makes the most sense to your brand and the experience you wish to offer your target market.
Using their expertise, a reliable iGaming software provider can help you narrow down your choices and provide you with the best sources of entertainment from their top software games partners.
Game quality and variety is key
Having a wide selection of online casino games is important to remain competitive, but so is the quality of the game content you provide. Games need to keep players engaged and satisfied. This is achieved by offering:
- Games with state of the art graphics and sounds
- Popular and new games that appeal to your target market
- Slots with special features (e.g. free spins, wild symbols, unique spinning mechanics, bonus buys, bonus games, etc.)
- Slots with varying themes
- Slots with different volatility levels
- Games with different sized betting limits to suit a variety of budgets and playing styles (e.g. low and high limit card and table games)
- A live casino that includes a variety of games beyond table and card games (e.g. money wheels, lotteries, bingo, etc.)
One of the best ways to ensure that you will always provide the best and most compliant gaming content is to partner with the industry’s top licensed and certified game providers. Offering games from the most respected game developers in the industry will also boost players’ trust and confidence in your site. Of course, in order to deliver on game variety, you will need to partner with more than one developer.
Naturally, the more partners you have, the more money you’re shelling out and the more contracts you need to manage. One of the best ways to lower costs and save time, while still getting great game content and variety, is to choose an online casino white label solution, a turnkey solution, or an API solution that uses a game content aggregator. These options allow you to integrate games from multiple game developers in one session and with one contract.
Step 5 – Obtain a License for Your Targeted Jurisdiction
Obtaining the necessary licenses to be compliant is one of the most difficult – and often lengthy – steps for new iGaming entrepreneurs. As mentioned, countries vary in their approach to gambling:
- Some countries have a monopoly when it comes to gambling
- Others prohibit gambling activities altogether
- Some lack country-wide regulations on gambling
Many first-time operators tend to choose lower-cost jurisdictions where a license can also be obtained quickly, such as Curacao. However, an established casino with greater financial resources can afford the costs and the time it takes to obtain a highly desired license like Malta, which gives them access to more markets.
| CURACAO | MALTA |
|---|---|
| AVERAGE LICENSE COST IN CURACAO – €25,000+ (Fee covers all gambling activities | AVERAGE LICENSE COST IN MALTA – €36,000+ (Fee cover only one type of gambling activity) |
| TIME IT TAKES TO OBTAIN A LICENSE IN CURACAO – 6 weeks | TIME IT TAKES TO OBTAIN A LICENSE IN MALTA – 6 months |
Every jurisdiction has its own licensing application process, but every licensing process has some common characteristics: they are complex and highly bureaucratic. The very process involves many steps, like providing a detailed business plan, a list of all the people involved in the management of the business, all the investors, all the security measures used and so on.
Both the plan and the business owner go through complete checks from authorities, and all this requires a lot of paperwork and stress. Moreover, no one guarantees that the application will be accepted.
Today, among the most popular online gambling license jurisdictions are:
- Curacao
- Malta
- Alderney
- Gibraltar
- The Isle of Man
- Kahnawake
- Antigua & Barbuda
- The UK
Choose your licensing option
As a new online casino operator, you will have two choices when it comes to obtaining the necessary licensing. You can:
- Obtain a gambling license yourself – If you choose this option, you’re in charge of going through the complex process we talked about.
- Become a licensee of your iGaming software provider – If you choose a solution like white labeling, you’ll get the licenses directly from your provider. But of course, you’ll also face some limitations – since you don’t directly own your casino platform.
Step 6 – Pick Your Payments Provider System
Once you complete the step which is probably the most complex – getting the license, you’ll need to take care of another fundamental aspect of your business: the payment system.
If you want to start an online casino, you need to consider that the more reliable and varied the payment methods you choose are, the more trustworthy you’ll appear before your customers.
Users will need payment systems to deposit and withdraw, to take advantage of bonuses and promotions – if any. Today, casinos tend to provide both traditional and innovative payment methods, to meet the needs of a larger audience. These can include:
- Credit Cards
- Debit Cards
- eWallets
- Bank transfers
- Prepaid cards
- Mobile payments
- Bitcoin and other cryptocurrencies
A pivotal aspect of payment systems is security, so make sure you’ll sign agreements only with those providers that are committed to secure transactions, and that put in place advanced fraud detection and risk management measures, easy integration, flexibility, and support to multiple currencies.
A Note on Bitcoin and Crypto Casinos
Although traditional casino payment methods remain a far more popular choice, cryptocurrencies seem to be acquiring an increasingly larger share of users. Many people continue to buy, trade, mine and spend cryptocurrency, such as Bitcoin, Litecoin and Ethereum as well as less popular altcoins.
Cryptocurrencies can represent a competitive advantage for at least three reasons:
- Crypto casinos are not very common yet
- Operators can avoid intermediaries and speed up transactions
- Players benefit from faster and direct transactions
Among business owners who start an online casino there are two main options to integrate this innovative payment solution with their businesses:
- Integrating a payment system that supports cryptocurrencies
- Creating an entire casino project based on the blockchain system – including the set up of a crypto wallet
Crypto and blockchain-based casinos might become a trend in the near future, and even allow for a wider implementation of innovative solutions like decentralized casinos. That’s why it might be worth it to know more about Bitcoin and crypto payment integration in the iGaming industry.
Step 7 – Brand and Website Creation
Users don’t only evaluate the gaming library offered by a casino, but also how it looks and how easy they can interact with the platform.
Once again, when it comes to website design entrepreneurs have mainly two alternatives:
- Design their unique template
- Use a pre-designed template
In any case, you’ll need to make decisions that can fully represent your brand. This doesn’t only involve the name of your platform, but also elements like:
- Color scheme
- Graphical elements
- Mascot
- Logo
- Slogan
When you start an online casino and you reach this step, the very first thing you should do is choose the best software you can afford. The main characteristics of the software should involve good technical support, and the capability to improve and adjust over time.
The outcome of your choice should be a software that allows you to design a visually appealing website with which your customers can easily interact. The website should also be fast to load, and have the appropriate integration between the front end and database.
We recommend this because when it comes to online casinos, speed is pivotal: consider that each delay can make users lose a bet, or a gaming session, and they can move to your competitors. That’s why the server you choose should have high bandwidth and the interface should be smooth and responsive.
Consider choosing a professional software solution
First things first. You need to choose an iGaming software provider that is reliable, innovative and that you can trust to help you make your business a success. When starting your own casino, you essentially have two options when it comes to providers:
- Suppliers that develop games and platforms themselves
- iGaming business providers that offer packages which feature the gaming content of other suppliers as well as additional products and services. This is known as a business-to-business (B2B) model (some examples of such providers are EveryMatrix, FinnPlay, SoftGamings, and SkillOnNet).
The majority of newcomers to the industry tend to choose the B2B option. This happens because these iGaming B2B software providers offer solutions – like those we’ve already discussed, namely white label and turnkey – that can give you all the support and tools you need before and after the launch of your casino platform.
Choose a software company that suits your goals
When choosing a software company you should consider that you’re about to enter a long-term business relationship. So, it is important for you to thoroughly research and evaluate all the available options, and to choose according to the specific needs and goals of your business.
Every online casino operator has different requirements, but it is usually in your best interest to look for a software provider that can deliver:
- Gambling licenses – or support to obtain one
- A wide range of gambling markets and selection of casino games – including live casinos
- Several payment options
- Support for multiple currencies and languages – especially if you’d like to have international reach
- Customer service options
- Support for multiple platforms, including desktop, tablet and mobile
- Customizable front end and access to a strong back end
- Affiliate support or options
- CRM (Customer Relationship Management) – including marketing, bonus systems, loyalty programs)
- Interactive web design
- Visual appeal
- Security measures like KYC – Know Your Customer, anti-fraud and anti-money laundering tools and safeguards
- Competitive pricing
- Flexible and fully customizable software solutions that let you control the entire process —if you’re not choosing a white label option
Step 8 – Market Your Casino to Your Customers
A successful online casino is one that is built around the pleasure and satisfaction of its customers. Keeping your players continuously happy is how you survive and thrive in the highly competitive online gambling marketplace.
You’ll need to employ marketing strategies to let users know that your casino exists, and then, you’ll need to retain them – demonstrating that they made the right choice when they decided to give your business a chance. Effective marketing strategies involve:
- Appeal to your target market – Once you know who your audience will be, learn about them. Understand what motivates them and what their goals are. Once you’ve identified the countries you want to target, you can set up local marketing campaigns to target the customers from these jurisdictions. Depending on local laws and your marketing budget, this may include things like radio ads, TV ads, magazine ads, SEO focused on cities within the country, or favorite games.
- Understand customer behavior – Employing a CRM strategy can provide you with valuable information about your customers’ individual behaviors and preferences. This information can be integrated with marketing strategies to help you put the right type of promotions and content in front of the right type of customer, to keep them returning.
- Unique content and an engaging user experience – Exclusive games and promotions are always a good strategy. The same goes for providing a smooth and gamified user experience – we will talk more about this later.
- Bonus systems – Bonuses attract new players and keep regular players interested.
- Loyalty programs – Loyalty rewards systems and VIP programs provide players with incentive to continue returning to your casino, especially the big spenders who enjoy receiving special treatment. Loyalty schemes are ongoing and are excellent retention for frequent bettors as these systems are designed to reward players the more that they play.
- Affiliate management programs – Setting up an effective affiliate system can help enable website engagement and boost traffic to your site. Affiliates use a number of techniques to drive new customers to your casino, including SEO tactics, trackable ads and links. Many iGaming software providers offer these systems or support their integration, helping to make the recruiting of affiliates easier.
- Marketing tools – Push notifications, SMS, email, and newsletters help to keep an open channel between you and your players. Not only does it keep players informed about your latest promotions and offers, helping with retention and conversion, it can also help you to keep track of player betting behavior.
- Customer service – Providing reliable and responsive online casino customer support is a must. This means having a staff of professionally trained individuals who know how to handle common customer complaints. It also means offering 24/7 support and different communication channels, especially live chat. If your intention is to offer a VIP/Loyalty program, a separate customer service department should be dedicated to caring for your high-level VIPs. It may also be prudent to provide multilingual support if you are targeting areas that speak multiple languages.
Gamification is becoming increasingly important
The way entrepreneurs use marketing strategies is important also because they create the first impression. Old promotional material will make people think that the casino is old and boring.
Today, casinos tend to use different strategies, for both promotional material and the addition of innovative products. One of these strategies is gamification.
In simple terms, gamification consists in making the very casino experience like a game, combining elements of traditional gaming with gambling.
Example of gamification elements include:
- Badges
- Points
- Leaderboards
- Competitions
- Rules of play
The more the product you create is feature rich and interactive, the more engaging it is for players.
Helpful Online Casino Business Tips
Now that you know the basics of what’s involved in launching a successful online casino, here are a few extra helpful tips to keep in mind:
| TIPS TO START AN IGAMING BUSINESS |
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6 Useful tips if you want to start your iGaming business:
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Final Thoughts
If you want to achieve the success you expect from starting an online casino business, you have to be prepared to invest a lot of time, hard work and money into your enterprise. Knowing your audience, choosing the right partners and solutions, and using the latest tech and trends in the industry are some of the ingredients to start the right way.
Use Casinnovate free business plan to set up your strategy and make your casino business sustainable after launch.
How to Start an Online Casino Business FAQ
Absolutely! As long as you are operating a casino in a jurisdiction where online gambling is not illegal, have the appropriate license and follow the necessary regulations, it is 100% legal
It is a required permit from an authority needed to create a legitimate gambling platform. To obtain a license, a business must comply with the laws and regulations of the authority that has granted it, including security, fairness, responsible gaming, etc. There are many authorities across the globe that provide gambling licenses, such as Curaçao eGaming, the UK Gambling Commission, and the Malta Gaming Authority.
You should expect costs to be tens of thousands of dollars or higher. That said, costs vary depending on the solution you choose. Typically, white label solutions offered by iGaming software providers are the most cost-effective. If you want to know how much money you need to start a casino in terms of exact cost, you should contact the company with whom you intend to do business directly.
Casinos make profits off of the house edge of the games that they offer. For instance, the industry standard for return to player percentages on slot games is about 96% on average. This means for every $1,000 staked on a slot game with a 96% return to player value, the casino will make a $40 profit. Casinos can also make money off of prize draws and jackpots.
It is a ready-to-go product offered by a B2B supplier that a casino business rebrands as their own. White label casinos are often quick to launch and cost less than turnkey or self-service casino solutions, which makes them a popular choice for those who are new to the industry. The platform requires few human resources to operate, comes with a license and a variety of products and services (e.g. payments, customer support, a select number of games, etc.). However, it is a limited platform with a fixed range of settings, and the supplier controls most details.
You could employ the services of a mobile app development company or sometimes iGaming providers who offer mobile solutions can help.
It depends on the solution and can take anywhere from 3 months to a year. The white label solution is the fastest and is usually up and running in 2 to 3 months. Meanwhile, turnkey and self-service projects often take far longer as these platforms are customized based on the customer’s preferences and requirements.
