Online gambling houses are cheaper than brick-and-mortar casinos and have a wider reach for both players and owners. This article will tell you how much online casino owners make.
Online casinos: Why do businessmen open them?
It is estimated that between 3500 and 4000 online casinos exist today. They make $56 billion annually in gross incomes (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 millions per year.
These numbers provide a clear answer for the question of what internal drivers will drive future online casino owners into opening a new website. The calculated money seems to be 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 important to understand that this estimate is only a rough one as there aren’t stats for every online casino. They aren’t publicly available. 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 businessman must open it. There are two types of initial costs for opening a casino: $500,00 to $200,000. This number includes:
- White label casino or no (will royalty be included)
- Hosting and cost of website with large bandwidth. 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 licence. Let’s assume $30,000 is the true cost of the license
- Licensor may require a license deposit or guarantor fees. This fee could range from $10,000 to $10,000 depending on the licensee.
- Connect to the most popular gaming providers – to ensure that your casino attracts as many players as possible (NetEnt Microgaming, Playtech), and also to 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 centre, bug fixing, and development guy to run it.
- Advertising in the beginning.
How much do online casinos make?
The fun part is here. We’ll be looking at the average casino owner’s monthly gross revenue of $311 million.
- Gaming provider expenses. These three – 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 the games at an average casino (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 the purposes of calculation.
- Advertising is a way to get people in. To ensure steady inflow of customers, let’s set it at $20,000 per month.
- In-house promos. These would 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?
We have determined that the average online casino player loses $900 per year based on different statistics. 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. To keep the license active, the casino owner must pay taxes as well as annual subscriptions. 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. Annual license costs $15,000 or more.
Conclusion: How to make money online at a casino
Online casino owners seem like a great opportunity. Based on surface analysis and numbers, 55% ROI seems like the best offer among many businesses. It applies to most casino while newcomers to market must understand that they will not be profitable for 1-2-3 years.