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How to Start an Online Casino. Many people want to open up their own online casino but they can't imagine actually going through all the steps to get one started. They see online casinos as being extremely complicated and difficult to. You need to buy the land. Get the plans for the Casino. You need the permits for the construction, gambling licenses, alcohol, food, hotel etc. You need to buy the furnishings, gaming tables, slot machines, security. And most importantly yo. Online gambling license cost. Prices for online casino license range from $10.000 to $350.000. Most of the time if the cost of the license is relatively small, there are strict document requirements. Slotegrator helps operators with all the legal issues which may arise. The costs of starting an online casino are often guarded “secrets” as there are only estimates and rough ideas given on numerous sites. Well, we have the scoop for you in the form of a full breakdown from an industry insider who worked for Microgaming software.

• Player Development Casino
• Casino Development Group

Let’s start by calculating the costs of running an Internet casino each month. The biggest expense most online casinos have is software related. Almost all gambling sites lease their softwarefrom one of the big 3 casino software providers:

1. Playtech
2. Microgaming
3. Net Entertainment

I’ve seen estimates that claim these 3 companies power 60% of all online casinos.

All of them have one thing in common:

They’re expensive.

Player Development Casino

All of these providers charge $11,000 or $12,000 a month to lease their software. They also get a 15% cut of the casinos’ winnings. That’s a pretty big expense right out of the gate.

But that’s not the only expense. Almost all online casinos run an affiliate program in order to drive business to their site.

Here’s how that works:

A webmaster runs a gambling information portal or site. He signs up for a casino affiliate program. He advertises the casino in exchange for a commission on each player.

This commission usually takes 1 of 2 forms:

1. A CPA (cost per acquisition)
2. Revshare (revenue sharing)

A CPA is a flat amount that the casino pays the affiliate for each player who signs up and makes a deposit at the casino. This amount can range from $25 to $500, depending on how much volume asite is able to send a casino.

With a CPA arrangement, the casino risks paying more for the player than the player loses to the casino. But it’s okay, because over a large number of players, a casino has an idea of what theaverage player is going to lose. That amount is always more than the CPA.

I’ve heard from reliable sources that the average online casino gambler is worth at least $1000. That takes into account the low rollers who only deposit and lose $25, but it also takes intoaccount the high rollers who deposit and lose $10,000 a month for months at a time.

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The other arrangement is called revshare, or revenue sharing. In this arrangement, the casino pays the affiliate a percentage of the players’ losses for the lifetime of the player. This amountvaries, but it hovers around 25%. Big affiliates can demand higher revshare percentages.

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So if an affiliate refers a player who deposits and loses $10,000 a month, he gets $2500 in commission each month.

But affiliates on revshare also have to take into account the amount of money their referred players win. If that $10,000 a month high roller gets on a hot streak, he can wipe out the earningsfrom the other dozen or 100 players the affiliate has referred.

So far we have a flat fee of $12,000 a month going out the door. We’re also seeing 25% of the casino’s wins being paid out in commissions, and we have 15% royalties going to the softwareprovider.

Casino Development Group

Casinos also have to pay for customer service and hosting. Let’s assume you can operate a world class customer service department using offshore labor and spending only $5000 a month.

Let’s also assume that a casino is using its own secure server. I don’t have a lot of experience with Web hosting for sites with this kind of traffic or that sites that use so much bandwidth byhosting games, but I’m going to assume it’s expensive, but not too expensive. I’m going to call it $2500 a month. And if I’m way off on that estimate, let me know in the comments section.

So now we have almost $20,000 a month in fixed expenses, and we have 40% of player revenue accounted for on top of that. So just to break even, an online casino needs to earn enough money so that60% of its earnings equate to $20,000 a month.

So we’re looking at a minimum casino win of at least $33,000 a month just to break even.