What are the main pain points of operating a casino?

[mashed]

I know it has been discussed several times, where people consider venturing into the operation side instead of the affiliate, and it's, of course, much harder than it seems.
What are the main challenges from an operating perspective? Most AMs I have dealt with seem not to be the brightest, so I assume there are some geniuses in the background doing the magical operation of the casino?

Legal and billing = Solved with crypto?
Onboarding game providers = PITA
Get FTDs = Easy depending on SEO/Mediabuying skills
Customer support = Easy.

What are the missing parts of this setup?

 

[Jetman]

One missing part is probably the fact that you need a huge bankroll beforehand. Because you can have a few whales that start breaking the bank when you start your operation. I think this is where a lot of new casinos could get into trouble.

 

[AussieDave]

I think this is where a lot of new casinos could get into trouble.

A lot of new casinos are white labels, and lot seem to have limited startup funds. I recall VideoSlots.com back in 2011/2012 using FU clauses to renege (steal) players winnings. That's not withstanding weekly/monthly withdrawal limits, which frankly are BS.

If you can't payout the win immediately, don't accept the bet!

However a lot of these white labels, seem to gamble on gaining their ongoing operational bankroll, by player loses. Which, as @Jetman states, all it needs is a few whales breaking the bank, and your fucked!

@mashed - Back in the early days (2001 and 2003) I ran a couple white-label casinos. Although it was the early days, the number of scammers, bonus whores and charge-backs became a daily nightmare to manage. In the end, and given all the drama, I decided best to return back to being an affiliate.

 

[mashed]

@mashed - Back in the early days (2001 and 2003) I ran a couple white-label casinos. Although it was the early days, the number of scammers, bonus whores and charge-backs became a daily nightmare to manage. In the end, and given all the drama, I decided best to return back to being an affiliate.

I can relate to this, I also dealt with staying under CB thresholds while operating subscription sites for many years.
I'm not sure how this works for gambling, though, as the amounts are so much bigger.
But most of these issues could be solved via crypto if it is getting broadly adopted. It would open up operational security challenges though.

 

[AlexanderGross]

I can relate to this, I also dealt with staying under CB thresholds while operating subscription sites for many years.
I'm not sure how this works for gambling, though, as the amounts are so much bigger.
But most of these issues could be solved via crypto if it is getting broadly adopted. It would open up operational security challenges though.

many brands are using already crypto indeed but it´s still a rare option for the most players to use and also for companies is it still not clear how to process with all accounting, tax and so one, therefore crypto is mostly the best solution for non regulated brands

 

[preditor]

The main point of operating a casino must is to get rich

I also managed a whitelabel back in the old good days, but the whitelabel provider got greed and made a win-win to win-loose situation, where they started overcharging me bonus - costs for the players but luckely I got out of the deal we had and I cud close down without any bigger issues.

Greed kills businesses.

I went a bit offtopic here, sorry bro!

 

[eenzoo]

Crypto or Fiat ... big wins are big wins. But yeah, one more BS brand doesnt move the scale ...
Hide your tiny withdrawal limits as good as possible to avoid to scare potential players and hope for the best :-D
Videoslots.com is a great example ... grown to one of the biggest brands out there.
And honestly, better cheat the players but the affiliates.
Affiliate = Traffic = Money = Money buys reputation all day long

 

[mashed]

Sorry guys, i missed these comments from you, I appreciate them! Very interesting to get your perspectives.
I asked for a few WL quotes from companies like SoftSwiss/SkillOnNet etc. Their maintenance cost are crazy, it seems like they care less about the actually success of the brand compared to their fixed delicious fees!

 

[pineaplepan1]

I know it has been discussed several times, where people consider venturing into the operation side instead of the affiliate, and it's, of course, much harder than it seems.
What are the main challenges from an operating perspective? Most AMs I have dealt with seem not to be the brightest, so I assume there are some geniuses in the background doing the magical operation of the casino?

Legal and billing = Solved with crypto?
Onboarding game providers = PITA
Get FTDs = Easy depending on SEO/Mediabuying skills
Customer support = Easy.

What are the missing parts of this setup?

Don’t confuse the easy part "legal/billing = crypto" and "customer support = easy" with the meat of the operation. Hard stuff happens once you start scaling =)

For our team it was something like the following:

Billing and reconciliation. The task here is not just crypto, but reconciliation of deposits and withdrawals, fees, PSPs, balances, refund/chargeback management and so on every day. And when you have multiple PSPs, one reconciliation mistake can quickly transform into many hours of manual work. Banking relationships and PSPs, are major issues in themselves even for the licensed operator.

KYC/AML + fraud. Not just a matter of having it or not, but processing 100–200 checks per day false positives, repeat checks, suspicious transactions, withdrawal checks and so on. Here is where even small team starts feeling overwhelmed.
Provider/game management. By the way, Onboarding was hell but maintenance is worse (i mean certificates, API changes, disabled games, GEO restrictions, wallets and sessions requirements and so on. We had some games/integrations managed with NuxGame casino api which helped our team to keep single point of integration instead of dozens of separate ones.

CRM/retention. Sure, you can acquire players via SEO or ads. But the real fun starts here: activation, second deposits, churn, VIP programs, bonuses and so on. First 1,000 first-time depositors and first 1,000 active players – totally different problems.
Fraud and risk management. It's annoying when you mistakenly classify player as a fraudster or vice versa. You need to monitor device fingerprinting, multi-accounting, bonus abuses and payment behavior patterns constantly.

Responsible gambling/compliance. This is not one-time thing, but limits, self-exclusion, AML/KYC workflows, reporting and audit trail become part of your daily work.

Data and reporting. You have to combine GGR/NGR, deposits, withdrawals, bonuses, game statistics, payment costs, affiliate programs, player segments and so on into single view. If data resides in five separate systems, financial reporting becomes dirty archaeology job in Excel.

Incident management. If PSP goes down, provider disappears, if withdrawal queue is growing and if your KYC vendor is starting to reject valid players, then somebody needs to make a decision, even in middle of night.

I grossly underestimated one more thing: operations scale faster than the number of players. At 500 players you can do many things manually, while at 10,000 you need proper workflows, automation and clear roles.

That's why I would define casino operation as something more like "platform + payments + compliance + risk + CRM + support + acquisition", not just "license + games + traffic". Payment and operational controls will soon become bottleneck for you.

I tried to describe it in as much detail as possible. Id appreciate your feedback. Feel free to ask more questions if you want; I'll try to answer anything that isn't covered by the NDA.

 

[DeadPooller]

I’ve seen pretty much the same thing in our online casino operation. At first we thought the casino platform and game integrations would be the hard part, but after reaching a few thousand active players, KYC/AML, payment reconciliation, fraud checks and CRM took far more operational time. The biggest lesson for us was that a decent iGaming platform only solves part of the problem — the real bottleneck becomes automation and keeping all those processes connected as you scale.

Don’t confuse the easy part "legal/billing = crypto" and "customer support = easy" with the meat of the operation. Hard stuff happens once you start scaling =)

For our team it was something like the following:

Billing and reconciliation. The task here is not just crypto, but reconciliation of deposits and withdrawals, fees, PSPs, balances, refund/chargeback management and so on every day. And when you have multiple PSPs, one reconciliation mistake can quickly transform into many hours of manual work. Banking relationships and PSPs, are major issues in themselves even for the licensed operator.

KYC/AML + fraud. Not just a matter of having it or not, but processing 100–200 checks per day false positives, repeat checks, suspicious transactions, withdrawal checks and so on. Here is where even small team starts feeling overwhelmed.
Provider/game management. By the way, Onboarding was hell but maintenance is worse (i mean certificates, API changes, disabled games, GEO restrictions, wallets and sessions requirements and so on. We had some games/integrations managed with NuxGame casino api which helped our team to keep single point of integration instead of dozens of separate ones.

CRM/retention. Sure, you can acquire players via SEO or ads. But the real fun starts here: activation, second deposits, churn, VIP programs, bonuses and so on. First 1,000 first-time depositors and first 1,000 active players – totally different problems.
Fraud and risk management. It's annoying when you mistakenly classify player as a fraudster or vice versa. You need to monitor device fingerprinting, multi-accounting, bonus abuses and payment behavior patterns constantly.

Responsible gambling/compliance. This is not one-time thing, but limits, self-exclusion, AML/KYC workflows, reporting and audit trail become part of your daily work.

Data and reporting. You have to combine GGR/NGR, deposits, withdrawals, bonuses, game statistics, payment costs, affiliate programs, player segments and so on into single view. If data resides in five separate systems, financial reporting becomes dirty archaeology job in Excel.

Incident management. If PSP goes down, provider disappears, if withdrawal queue is growing and if your KYC vendor is starting to reject valid players, then somebody needs to make a decision, even in middle of night.

I grossly underestimated one more thing: operations scale faster than the number of players. At 500 players you can do many things manually, while at 10,000 you need proper workflows, automation and clear roles.

That's why I would define casino operation as something more like "platform + payments + compliance + risk + CRM + support + acquisition", not just "license + games + traffic". Payment and operational controls will soon become bottleneck for you.

I tried to describe it in as much detail as possible. Id appreciate your feedback. Feel free to ask more questions if you want; I'll try to answer anything that isn't covered by the NDA.

I’ve seen pretty much the same thing in our online casino operation. At first we thought the casino platform and game integrations would be the hard part, but after reaching a few thousand active players, KYC/AML, payment reconciliation, fraud checks and CRM took far more operational time. The biggest lesson for us was that a decent iGaming platform only solves part of the problem... the real bottleneck becomes automation and keeping all those processes connected as you scale.

 

[David Astor]

You have the basic components in place, but in my opinion the most missing elements are customer retention (CRM) and anti-fraud management. Getting FTDs (Monthly Minimum Deposits) gives players a chance to succeed, but VIP hosting, bonus abuse prevention, and managing monthly minimum deposit providers (MMGs) are where most new operators struggle to stay profitable.

 

[ARZ]

Isn´t it better to be an Aff after all?

 

[Kepler23]

I know it has been discussed several times, where people consider venturing into the operation side instead of the affiliate, and it's, of course, much harder than it seems.
What are the main challenges from an operating perspective? Most AMs I have dealt with seem not to be the brightest, so I assume there are some geniuses in the background doing the magical operation of the casino?

Legal and billing = Solved with crypto?
Onboarding game providers = PITA
Get FTDs = Easy depending on SEO/Mediabuying skills
Customer support = Easy.

What are the missing parts of this setup?

What’s missing is primarily the operational layer, which in our case was something like:

PAM + KYC
payment reconciliation
fraud/chargeback management
abuse of bonuses
affiliate commissions calculations
reconciliation of GGR/NGR per day

Game integration was irritating, but the time killer was definitely reconciliation, which took easily 10-15 hours/week starting from high volume of transactions.

Our choice between NuxGame, SOFTSWISS and Slotegrator was primarily based on comparison of operational layer, not only game library. With NuxGame, almost all components for PAM, bonuses, integration and back-office were already in place.