Establishment of a Gambling Business: the Cost of Such a Project in 2021

Online casino
15 june 2021

The launch of online casinos is one of the most promising investment patterns in recent years. According to the H2 Gambling Capital research group, in 2019, the capitalisation of the gambling market reached 484 billion dollars and by the end of 2021, the industry’s turnover will exceed 2.2 trillion dollars.

Gambling business in 2021: online casino launch

Specialists of Online Casino Market will be glad to share their knowledge on what entrepreneurs need to know in order to successfully enter the market, and how much it will cost.

Framework for the Launch of a Casino Project

Any operator who decides to own a gambling platform is interested in the value of such an idea.

An important thing is that there is no single price for gambling clubs.

The overall cost is affected by many factors, including:

  • quality and variety of the game content;
  • functionality;
  • a set of administrative tools;
  • the company status (a gaming site that only accepts players from a specific region or an international brand);
  • the size of registration fees;
  • available promotional tools to advertise a gambling project, and much more.

To develop a detailed budget for the creation of a turnkey online casino, operators need to work out a business strategy.

The main items of the plan:

Licence

To launch a turnkey casino business on a legal basis, you will need to obtain a permit that regulates the work of the company and gives legal protection to the project if there are any disputes with customers and other circumstances of insuperable force.

When choosing a regulating authority, we recommend you to pay attention to the following aspects:

  1. The political and economic situation in the country. A country with a friendly political and economic environment provides operators with optimal conditions for business scaling. For example, in Georgia, the gambling industry is closely related to the tourism sector and those entrepreneurs who are working in resort zones receive additional subsidies and various benefits from the government.
  2. Tax burden. Several offshore jurisdictions offer gambling projects a low rate or complete tax exemption. For example, you can buy an online casino that was licensed in Curacao and delete the item “tax payment” from the list of your expenses forever.
  3. Requirements for licensees. Each offshore zone has its own rules related to the legalisation of business: from the size of the authorised capital to the number of staff and members of the company's board of directors. For example, in order to obtain a licence in Malta, operators must register a company in this country, and in Estonia, it is enough to open a local representative office.
  4. Application processing time and the validity period of a permit. Most offshore jurisdictions issue gambling licences for 5–10 years. The time for application processing depends on the internal policy of the regulator. The UK licensing authority can consider an application within a year, and in Georgia, you can get a permit literally in a day and without the mandatory personal attendance.

Installation of the Game Content on the Website

In order for a turnkey online casino to bring a stable income, it is necessary to offer customers a maximum of gambling products.

It is worth noting that in recent years, the preferences of users have changed dramatically. If earlier gamblers could spin the reels for hours and collect fruit combinations, then today, casino visitors prefer more complex games, the victory in which depends not only on the random number generator but also on their skills.

The most popular solutions among modern customers are:

  • arcades and quests;
  • instant games with several levels of complexity;
  • tournaments;
  • slots with subplots;
  • VR content that provides an ability to interact with in-game items and the surrounding scenery.

Design and Functionality of a Gaming Site

It is not only the design of the project that matters but also the quality and functionality of the user interface.

To improve the navigation of the platform, you can use the following tools:

  • products cataloguing with search filters;
  • division of information on the website into thematic sections (Personal Account, FAQ, Responsible Gaming Policy, News, etc.);
  • integration of a dialogue box into the website for quick communication with the customer service;
  • connection of widgets for identification via social networks, and much more.

Staff Recruitment

An important cost item of an enterprise is the recruitment and training of personnel.

Usually, operators hire the following employees:

  • marketers;
  • risk managers;
  • designers;
  • developers;
  • content managers;
  • customer service staff, etc.

Entrepreneurs can independently recruit employees or buy a turnkey casino solution and outsource the administration of the project.

Promotion of the Gambling Business

To stand out against the background of other brands, a new casino must have a unique customer acquisition program.

One of the most convenient ways to develop and implement a marketing strategy is to connect a multifunctional CRM system to the casino platform. Using this program, you can:

  • organise tournaments and various thematic events;
  • conduct automatic mailing;
  • analyse the level of activity of your clients;
  • personalise bonuses as much as possible, etc.

Cost of the Components of a Gambling Project

Turnkey casino: cost of the components

The total price of a turnkey casino is calculated taking into account the basic configuration of the platform and additional components that can be integrated upon request.

The main expenditure items for launching an online casino include:

Acquisition of a Gambling Licence

The cost of such a permit is set in accordance with the offshore policy.

Prices for the legalisation of a gambling project in different countries in 2021

Malta

Licensing of gambling projects plays an important role in the country's economy.

The regulator issues 4 types of permits, the cost of which varies from 10 to 25 thousand euros. The price of application filing is 5 thousand euros

Isle of Man

It will cost 5 thousand pounds sterling to apply for a local licence.

The compulsory annual fee for the maintenance of a permit is 35 thousand pounds.

The tax rate directly depends on the company's turnover. Gambling projects with annual revenues of more than 40 million pounds pay only 0.1% of their income to the public treasury

Kahnawake

The application filing costs 35 thousand dollars.

Annual maintenance of the licence — 20 thousand dollars.

To extend the validity of the document, operators will need to pay 5 thousand dollars

Gibraltar

The jurisdiction has a fixed licence fee of 114 thousand euros. This includes application filing, monitoring of the company, and provision of legal support services for the licensee.

The annual tax for entrepreneurs is 1% of their income but not more than 484 thousand dollars

Ukraine

For the Ukrainian gambling licence, operators will have to pay 6,500 minimum wages established by the government at the beginning of the year

Purchase/Rent of the Gambling Software

The cost of the game content directly depends on its quality, technical parameters, and the reputation of the vendor company.

To buy a set of gambling products from a well-known brand, you will have to pay from 10–15 thousand dollars.

Website Development

The higher the quality of the gambling platform, the more visitors it attracts.

The price of its creation will depend on the complexity of the structure, content, and functionality. The total amount can be as much as several hundred or tens of thousands of dollars.

Recruitment of Staff

It is rather difficult to be fair-minded about the costs of personnel maintenance. It all depends on the economic situation in the chosen country, the personal skill level of employees, etc.

Some rules may be regulated by a casino licence. For example, the Kyrgyz government plans to issue work permits only to those operators who will hire not less than 50% of the country's residents.

Online Casino Promotion

The cost of an advertising program is determined by 2 parameters:

  1. Work time. Various tools with a very wide range of responses are used to promote gaming sites. For example, the effectiveness of banner advertising can be evaluated literally an hour after its launch and mailing — in one day. The result of SEO optimisation can only be analysed after 4–6 months.
  2. Financial resources. The budget of an advertising campaign should be calculated on the basis of the volume of the estimated profit of a project. Various types of promotion, including affiliate programs, social media advertising, bonuses, tournament organisation, sponsorship, and web indexing will cost about half of the expected revenue.

Additional Costs

This item includes possible costs that are not related to the permanent operation of the website:

  • recruitment of additional staff to organise a big event;
  • expansion of the catalogue of offers;
  • the company’s entry into new markets;
  • technical modernisation of the project;
  • back-up and storage of databases;
  • payment for the services of independent auditors, and so on.

According to the approximate calculations of the Online Casino Market team, the investment fund of the casino project will be distributed as follows:

  • 3–7% of the budget — legal registration of the company and payment of the related fees;
  • 10–30% — purchase/maintenance of a gambling licence;
  • 25–35% — purchase of the game content and related software (security systems, payment modules, CRM, etc.);
  • 10–20% — salaries to the company's employees;
  • 5–15% — reserve fund to cover the unforeseen expenses.

The Main Things about the Cost of Launching an Online Casino in 2021

Launch of an online casino in 2021

The capitalisation of the industry will reach 2.2 trillion dollars by the end of 2021. Now is a perfect time to establish the best turnkey online business.

  • It is several times cheaper to buy a turnkey project than to start from scratch. The price already includes a licence, a platform with wide administrative functionality, and a catalogue of online casino software solutions. Moreover, the project can be changed and customised upon request.
  • Licence is a mandatory expense item for those who want to establish a casino business. The cost of licensing varies depending on the offshore zone. When choosing a jurisdiction, one must take into account not only the price of the service but also the size of the tax rate.
  • To buy proprietary turnkey casino software, it will be necessary to pay 15 thousand dollars or more. This is a reasonable expenditure since the world’s leading providers are committed to maintain an impeccable reputation and offer gamblers the most high-quality content.

Those who want to find out more about the opening of an online casino and budget allocation, please contact the managers of Online Casino Market. Just leave an application, and our specialists will provide you with detailed information on all aspects of the gambling business in local and international markets.

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Author

Karen Fill

Gambling business expert at Online Casino Market

15 june 2021