Online gambling houses are cheaper than brick-and-mortar casinos and have a wider reach for players and owners. This article will tell you how much online casino owners make.
Online casinos: Why do business people open them?
It is estimated that between 3500 and 4000 online casinos exist today. They make $56 billion annually in gross income (revenues) as of 2021. This is roughly $14.9 million per year gross income for one online gaming house.
Are all Internet casinos offering this much? No. No. According to the division, 20% of the most profitable houses make $44.8 billion per year or $59.7 million per casino. The rest make $3.733 million per year.
These numbers clearly answer what internal drivers will drive future online casino owners to open a new website. The calculated money seems lucrative, regardless of where you are located.
How can you make money at an online casino?
We’ll use the following statement to make the picture more real: An average online casino earns $3.733 million per year, or $311 000 per month (based upon a previous chapter). How much does a casino make per day? It is $10,370 based on this number. It is essential to understand that this estimate is only rough as there are no statistics for every online casino (they aren’t published). We have only general numbers like the rest of our marketing experts.
But does the casino owner have the right to keep all the money? No. No. Below, we’ll be discussing them in greater detail.
To start making money at a casino, a business person must open it. Opening a casino has two initial costs: $500,00 to $200,000. This number includes:
White label casino or not (will royalty be included)
Hosting and cost of a website with large bandwidth. The website can be operated with thousands of connections per minute.
The most expensive part of the license is the one that costs the most. It can be as low as $20,000 given by Curacao or as high-end at around 2,000,000 British pounds for the UK’s fattest all-embracing license. Let’s assume $30,000 is the actual cost of the permit.
Licensors may require a licensed deposit or guarantor fees. Depending on the licensor, this fee could range from $10,000 to $10,000.
Connect to the most popular gaming providers – to ensure that your casino attracts as many players as possible (NetEnt Microgaming, Playtech) and make it easier (NetEnt), this is approximately $5,000 per each. This does not include their monthly royalties.
Deposit of safety to protect the large winnings of the players in the first step
The casino needs a manager, support center, back office, bug fixing, and development team.
Advertising in the beginning.
How much do online casinos make?
The fun part is here. We’ll look at the average casino owner’s monthly gross revenue of $311 million.
Gaming provider expenses. NetEnt Microgaming, Playtech, and Microgaming each take approximately $12K per month plus 15%-20% of all casino winnings. They typically make more than 50% of all casino games (in different places around the world, the situation may be different, but it is the same in English-speaking countries). So, 50%*311,000*20%=$31,100.
White label royalty payments (if any): 5% from revenues ($15.550).
Let’s say we have $5,000 for personnel expenses.
Hosting and maintenance of website: $5,000
Affiliate program. It could be either a CPA (a flat fee for bringing in a new customer) or RevShare (an ongoing payment for the customer brought to this casino throughout his life). The expenses can vary depending on the terms of an affiliate program. Let’s assume 25% RevShare for calculation.
Advertising is a way to get people in. To ensure a steady inflow of customers, let’s set it at $20,000 per month.
In-house promos. These include offers for new players, tournaments, prizes, or other giveaways. Let’s set them at $100 per month for active players (given that 90% of the amount is returned to the casino by the attached wager).
Good customer support service. For a small casino, it will cost around $10,000 per month to get remote support.
Other fixed expenses: $5,000
What do we get as a result?
Based on different statistics, we have determined that the average online casino player loses $900 per year. This is $75 per month. This means that 4,146 gamers would generate $311,000 per month. Consider a casino that attracts 200 new players who deposit monthly. CPA from them would be 200*900*25%/12=$3,750 a month.
This scenario would result in 4.146*100*10% = $41,460.
Let’s now take out all the costs:
An online casino that generates $311K per month in gross revenue will earn a profit before taxes of $171.19K. This is a generous profit margin of 55%.
As you may have guessed, that’s not the end. The casino owner must pay taxes and annual subscriptions to keep the license active. Both depend on where the taxation is done and how it is licensed. The cost of running a legal company and tax could be as high as 60%. However, people often choose the most affordable jurisdiction, like Sint Maarten or Aruba. This can lower the cost even further. An annual license costs $15,000 or more.
Conclusion: How to make money online at a casino
Online casino owners are a great opportunity. Based on surface analysis and numbers, 55% ROI is the best offer among many businesses. It applies to all casinos, while newcomers to this market must understand that they will not be profitable for the first 1-2-3 years.