$1 Million is a lot of money, but how big is it when what you want is to set up an online casino? This question becomes particularly important when building an online casino from scratch.
According to reports, internet gaming has gained popularity and preference for the convenience it affords players to play from their devices. With the global COVID-19 pandemic and the primal need for isolation, it has become even more necessary to explore fully the potential of iGaming, which online casino operation is one of them.
To set up an online casino is costly, as you shall see from the estimate of the components in the latter part of this post. The cost gets higher when you have to run campaigns to register your brand name among a fan base and pay for winnings. For example, focusing on being a no deposit casino, like those found at Nodeposithero.com, comes with certain costs. Operating an online casino is a lucrative business, but it also comes with challenges that require huge capital to resolve.
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What You Require to Set Up an Online Casino
The first step is to decide the kind of online casino you wish to operate. The range of options includes:
- Online casino from scratch: with this option, you own the entire casino components and control the gains and responsibilities of the operation. Building from scratch is doubting not just in terms of the needed capital but also in acquiring the technology and labor required to run it.
- White label casino: this option involves a process where the software and the basic technology required are rented from another brand. In some cases, you have to develop your website and run marketing campaigns for your project as an independent brand, but you have to operate under the parent brand’s license.
- Casino franchise: This scenario is where even more of the components you need to operate an online casino, like technical support, promotion, etc., is rented from a parent company.
Given these options, several companies offer different turnkey solutions for individuals with varying budgets. Deciding on the kind of online casino you want to operate from the above options puts you in a better position to determine what components the budget of $1 Million shall be serving.
Basic Components of Running an Online Casino and Cost Estimates
Here are the essential components of running an online casino
- Gambling license
Getting a license could pass as the most challenging part of setting up an online casino, considering that most justifications have no laws establishing or regulating online gambling. Added to this challenge is that many jurisdictions that issue licenses only give a single license and at an outrageous price. The popular solution to circumvent this challenge is to go for offshore jurisdictions that offer better conditions at reasonable prices. Depending on the justifications you are applying for a license, the cost may vary between 10% – 25% of the $1 Million budget.
Most of the time, variation in the price for online casino software follows the software provider’s degree of competence. Acquiring good software for your online casino may well spell the beginning of the end of your business. The software is a component you cannot afford to negotiate a compromise. Between 25% – 30% of the $1 Million budget should get reliable online casino software.
- Website Development
This is one component you could save money from if you are a web developer. Otherwise, a reliable website should cost between 5% – 10% of $1 Million.
Running an online casino is one thing you cannot do alone. You need a team of professional staff. The number will depend on the scale at which you intend to operate. An alternative to having permanent staff is the use of freelancers. However, this is a poor substitute for engaging permanent staff who understand how your setup works. Either way, you need to afford an average of $500 per staff every month.
- Marketing campaigns
No online casino succeeds with the best software, website, and staff alone. Without advertising, the essence is lost. Since advertising is a continuous exercise determining its cost is a bit tricky. However, about 5% of $1 Million is a good investment for one year.
The above components are the major factors that come into play to determine the cost of setting up an online casino. However, this is a business that is yet to be stamped legal in most jurisdictions as an established brand’s license and technologies come with many contingencies and miscellaneous expenses that could add up to a tremendous amount of money. $1 Million is a fair budget for setting up an online casino, predominantly if the casino option operates under the license and technologies of an established brand. This leaves a good amount of the budget for paying staff and running marketing campaigns.
However, if you already have a lot of experience and wish to invest heavily into the emerging industry, a $2 Million budget should set you up on the best technologies, staff, and marketing. Assuming every gambler that logs into your platform does not turn out a winner.