What are the costs associated to starting a casino in 2022?

[swkr]

Hello guys,

I'm considering investing in a casino operations startup and i'm looking for a way to understand how costs and revenue work. Can you please refer me to an article where i can learn how much would it cost? From my research so far i like everymatrix, whitehat gaming as a ready to go platform. But i can not find anywhere pricing costs. If you have other suggestions please recommend. Basically, i'm looking to know how much should i pay for the casino platform, for games, for sports, for live casino, for crypto casino and any other cost associated? Only thing obvious is affiliate cost as it is publicly available, but anything else is a unknown figure.
I'm new to this, so I want to absolutely make sure i don't screw myself and lose lots of money or have to invest more than i would want. I contacted few software providers, but they either told me straight way they don't work with small businesses or didn't acknowledge me at all.

Thanks

 

[Juan Roman]

There are quite a few platforms such as EveryMatrix, BetConstruct, SoftSwiss that offer white label solutions, so the best way is to ask them directly to provide their pricing plans as the full cost depends on whether you want a turnkey solution or something more custom. And obviously guys who already did it are a valuable source of information provided they are happy to share their experience.

I know many big affiliates have regretted switching to the operator side of things and they usually go right back, so you should definitely talk to the guys who did it and evaluate all the options, costs, risks and whatnot before deciding to move forward with your plans.

Don't get me wrong. I'm not saying operating a casino cannot be profitable, but it's definitely a highly risky proposition and even the experienced iGaming professionals usually don't quite get the size of task at hand until it's too late.

 

[euromill]

As Juan Roman has pointed out you can go direct and ask them for the fees, that though is the tip of the iceberg.
Normally there is a setup fee - then you have a revenue split with the white label and be sure to go through it with a fine-tooth comb. It's a percentages game and there are all sorts of costs that add up that you need to calculate. Then there are Taxes - ah the good old days prior to regulation. I remember them.

The major cost though is setting a site up and marketing it. That's where all the Moolah goes and why so many struggle including some very talented affiliate marketers. Its a dog eat dog world and the costs can pile up.

 

[Frank]

fee's then there is a reserve so if your player hits 500k you will need that and a % upfront, plus staff marketing etc.. it can rack up pretty quick.. the first prices look tempting but it always costs more

 

[AussieDave]

The industry is full of hopeful green-horns, with little to no knowledge of the igaming industry. Who, like yourself @swkr, had high plans of making their online casino successful. A decent, industry competitive, white label startup, might set you back $50K to $100K+.

However, and as @Frank and the other members have stated, it's the ongoing costs, not to mention having funds to pay winners fast (within 24 hours or less), that's going to see you hemorrhage cash at an alarming rate, if you are clueless to what your doing. Even highly experienced operators can go bust, by easily making a couple of dumb decisions. EG - Offering a bonus without guarding against bonus-abuse.

The list of what you don't know about the industry, running a casino, marketing it or the many other pitfalls, will surely be your nemesis. My advice, find yourself another viable startup investment, because, this industry will eat you up, and spit you out, in record time, if your not clued up and if your not cashed-up.

 

[UK_Affiliate]

If you want a quick low-cost route to market - I have a white label casino, that I would like to sell. This would be much more affordable for you, than buying a new infrastructure through one of the main WL providers, who would likely want €25K+ and a few months time, just to get the site live for you.

 

[AussieDave]

If you want a quick low-cost route to market - I have a white label casino, that I would like to sell. This would be much more affordable for you, than buying a new infrastructure through one of the main WL providers, who would likely want €25K+ and a few months time, just to get the site live for you.

lo-f'ing-l.... it's akin to purchasing someone's fucked up used car.

 

[Hannah Diaz]

In my opinion, you should look into some of the services of a product suite provider for professional online gambling management. I found an article quite relevant for you: www.mangalorean.com/how-much-does-it-cost-to-start-an-online-casino/

 

[AleksUnder]

I think we need people who are trying.
- You can start with conferences and talk with WL companies there.
- you can start your own BRAND, I mean as a players\streamer, etc, and after that, add your WL
- you can start with small categories, like, only live-casino, or BTC slots, etc.
I'm not an expert, i'ts just my thoughts.

I've just remembered. I don't know his history, maybe you should talk with TTR casino owner. He was an affiliate a long time ago.

 

[swkr]

Hi guys,

So my research so far shows that I have to pay
4% of GGR for PAM platform
2% of GGR for payment processors
2% of GGR for Game aggregator
0.2-0.5% for managed services
0.5% for CMS/website
12-16% of GGR for games
18% of GGR for sportsbook
20-40% of NGR for affiliates which translates to ~15-25% of GGR depending on bonusing

So sounds like 30-40% go for royalties and if I add another 10% for staff salaries and other, the casino gets 50% of GGR. Which is a nice piece of the pie I guess.

I hope this is useful for you and correct me if Im wrong.

 

[AussieDave]

@swkr - maybe a small issue BUT paying winners comes to mind...

 

[swkr]

GGR is bets-wins, so players are paid already.

 

[euromill]

GGR is bets-wins, so players are paid already

Hopefully, you've built up a GGR for that to be the case. Getting hit by a £50k winner can be a "Game Over" kind of scenario

I would add CRM - SMS & Mailing costs to that. I think your GGR for games is low. You need to add seed money for Progressive Jackpots as well to that list of costs. Players who play PJs cost you cold hard cash.
Bonuses & other marketing costs will take a chunk more and then there are the taxes.

50% - I think is optimistic.

The platform usually charges a fee as well -

 

[euromill]

Oh, and you get to pay Affiliates as well

 

[AussieDave]

GGR is bets-wins, so players are paid already.

Hopefully, you've built up a GGR for that to be the case. Getting hit by a £50k winner can be a "Game Over" kind of scenario

@euromill - thanks for backing that up

Unfortunately, most of these white label startups are what I call: 'a poor man's casino'.

I've been a casino affiliate for 22 years. In the early days I too tried my hand at a white label. That was way back when affiliates were making $100K without breaking a sweat.

What did I learn? (because experience does come at a price)

• Unless your running the entire 'show' yourself, your going to get shafted, some place, some how.
• If it was this simple or sounds this easy - everyone would be doing it!
• Even those with vast experience can find themselves hung out to dry.

Anyway, sounds like the OP is convinced his startup 'white label' is money in the bank...

 

[Strider1973]

Hi guys,

So my research so far shows that I have to pay
4% of GGR for PAM platform
2% of GGR for payment processors
2% of GGR for Game aggregator
0.2-0.5% for managed services
0.5% for CMS/website
12-16% of GGR for games
18% of GGR for sportsbook
20-40% of NGR for affiliates which translates to ~15-25% of GGR depending on bonusing

So sounds like 30-40% go for royalties and if I add another 10% for staff salaries and other, the casino gets 50% of GGR. Which is a nice piece of the pie I guess.

I hope this is useful for you and correct me if Im wrong.

Nice to see that you came back to update this thread.

When you add up the % cost, then you see that you have a lot more work than as an affiliate for a not much higher share of GGR.
If you are not yet generating 100 or better 500 FTD per month as an affiliate, I wouldn't bother setting up an own casino.

 

[AussieDave]

If you are not yet generating 100 or better 500 FTD per month as an affiliate, I wouldn't bother setting up an own casino.

I'd say at least 500 FTD's per month. If 100 FTD are only depositing $50 p/m, that's only $5,000.

@swkr - it's not my intention to come across as being gruff or difficult. Thing is, this is business, and risking time and money, isn't a game. Over the years, I and other members here, and at GPWA, have seen literally 1,000's of folk just like yourself, fall by the wayside. Even for season affiliates it's a tough gig these days. Commencing a new casino, with little to no experience, when the industry in saturated, is risque at best.

 

[swkr]

@AussieDave I agree with you. This is why i do solid research before jumping in sth.
Thing is affiliation is not an easy business too any more. Too saturated, big dogs don't drop the bone for little dogs. Hard to compete and penetrate the market. Very little or no space for innovation. My observation is that the only way to break through in affiliation and become a big dog (given you have the skills and team) is if you raise a capital to buy a good cashflowing assets (websites) and then grow from there assuming you know your shit. I know many affiliates who have the skills and know how and the time to hustle but can't break through cos of lack of capital. That is why i consider branching in casino as well. And doing it all myself requires lots of capital and time. So white label is the only option i guess.

 

[swkr]

Hi Guys,
Does someone know how much capital a medium and a big casino need to have as a reserve capital in case of big wins and rewards. How is that regulated?
For ex how much do casinos like casumo hold at any time for a collateral?

thanks

 

[gm2891]

Casumo is not the best example to ask, they do not pay winnings in time (see Casinomester's threads). If I was really interested to know, I would try finding out how Curacao-licenced casinos manage to do it. Not every shite place, but those who pay almost instantly and have very high or no cashout limits at all.