How to Launch a Profitable Gaming Site: Reliable Solutions from Online Casino Market
The purchase of an online casino is a profitable investment in 2021. Gambling projects are distinguished by high profitability and ease of launch: you can create a gaming site in just 2–3 months.
Online Casino Market offers entrepreneurs to consider the main financial markers of a successful turnkey casino solution. We will tell you everything about how to attract a solvent audience and optimise operating costs.
Let us consider what metrics illustrate the profitability of this type of business:
Gross Gaming Revenue (GGR)
The indicator is calculated as the sum of bets placed by gamblers minus their winnings.
It is better to analyse this indicator for extended periods ― for 6 months or a year of work. Based on short periods (for example, a month), you can observe a certain mismatch of the metric due to big winnings of users
Net income from the gambling project
This is the gross income minus the entrepreneur's operating costs.
The list of expenses is quite large, and it depends on the specifics of the activity of entrepreneurs.
For example, the owners of a turnkey casino projects pay a licensing fee, while the operators of White Label solutions transfer royalties to the parent company on a monthly basis
Net margin of a casino
The indicator is calculated as the net profit of a casino to the total sum of deposits.
A high coefficient value (0.5+) shows that the business owner is working in the right direction effectively interacting with the audience and optimising operating costs
Money turnover indicator
This is the sum of bets to deposits. The optimal value is 0.2–0.25.
A sharp increase in the coefficient may mean that an unjustified loyalty program was integrated into a turnkey online casino. Entrepreneurs provide users with pleasant bonuses but get nothing in return
Lifetime customer value
The metric illustrates how much money a particular gambler has brought to a gaming site.
The calculation starts from the moment of the registration on the platform and stops when users stop placing bets
Customer acquisition cost (CAC)
The parameter is calculated as the size of the monthly advertising budget divided by the number of new customers during the reporting period.
Low CPA indicates that a businessman has chosen a successful marketing strategy
Average revenue per user (ARPU)
The net profit of an online casino is divided by the number of active gamblers. High ARPU give evidence of the presence of a good loyalty program
All financial metrics of the operation of the iGaming resource are interconnected. Moreover, most of them depend on the competent work of operators, which helps them to attract and retain solvent customers.
The development of the turnkey casino business involves the use of the following marketing tools:
- SEO optimisation. It helps operators to propel the gambling portal into the top queries of Google, Yandex, Yahoo!, Baidu, and other search engines. To achieve the desired result, SEO specialists structure the website filling it with relevant links and other useful materials.
- SMM marketing. This is the arbitration of Internet traffic from social networks, mostly from Facebook, Instagram, Twitter, Telegram, and other platforms with high traffic. You should use SMM marketing carefully. Some social media require permission to advertise products.
- Email newsletter. If, during the registration, gamblers agree to the processing of personal data, then, in the future, they can receive targeted e-mail messages with information on new games, current promotions, and other offers.
- Affiliate services. They bring the target audience to the website from the outside, charging a fee for this. As a rule, the CPA model is used (remuneration for each attracted customer) or the RevShare method (percentage of income). The good thing about the solution is that entrepreneurs pay only for a ready-made and measurable result, without wasting money.
To make online casino software solutions bring a good profit, it is necessary to come up with an interesting loyalty system. Its task is to attract new gamblers and retain regular customers. Moreover, a high-quality program will help entrepreneurs to increase the average check of the user, which also affects the profitability of the gaming site.
The main elements of the turnkey casino loyalty system:
- welcome bonuses (deposit and no deposit bonuses, free spins with a wager in the range of x10–x40);
- cashback ― a return of part of the money spent by the gambler on the website;
- jackpots with a fixed and saving prize fund;
- in-game prizes (free spins, access to higher levels, additional game characters);
- VIP program for regular customers who play with high limits;
- seasonal campaigns with a solid prize fund;
- promotional codes for launching slot machines with a certain sum of money on the account;
- multiplayer tournaments.
The use of wagers optimises the expenses of operators and helps them to fight against bonus hunters. These are users who register on the gaming site only to receive a welcome bonus. Wagers show how many times gamblers must wager the prize money before withdrawing it.
A generous loyalty program is far from the only search criterion.
Most often, gamblers pay attention to the following characteristics of Internet casinos:
- Licence obtained in a prestigious jurisdiction. As a rule, this is a permit from one of the offshore zones ― Malta, Curacao, Isle of Man, Gibraltar, and Alderney. In addition to a good response from gamblers, offshore licensing will provide a low tax burden, which is important when calculating the net profit.
- Catalogue of modern games. It is difficult to imagine the establishment of the best turnkey online business without dynamic slot machines, live and table games, lotteries, and poker. Among popular software vendors, we can name Microgaming, NetEnt, Novomatic, Playtech, Evolution Gaming, Pragmatic Play, and other companies.
- High-quality technical support. The first acquaintance with the support service occurs at the time of registration on the website. Customers can find out about the available bonuses, ways to replenish the account, and the availability of licences and certificates. Polite communication and clear answers to the raised questions are what gamblers value the most.
- Available financial aggregators. In 80 cases out of 100, the lack of processing of Visa and Mastercard cards will scare off potential clients who use these banking solutions. Restrictions to the deposition and withdrawal of funds and high commission fees are also taken ambiguously. The connection of a multi-currency payment module with support for fast and secure transactions would be an excellent choice.
- Positive feedback. Serious gamblers who are ready to stay on the gaming site and place big bets always want to find out about the experience of other casino visitors. The task of entrepreneurs is to monitor such opinions on the Web, always respond positively to criticism, and take measures to tie up the loose ends.
Before entrepreneurs decide to buy online casino solutions, they need to carefully consider their financial strategy. What expenditures will be top priority, and on what business processes it is possible to save in order to get high profits for the reporting period.
The list of main expenses of gambling projects includes:
- maintenance of a licence (annual fees, costs of the reissuance of a permit, and certification of a gaming site);
- royalties to the parent company;
- commissions to payment providers (the cost of acquiring, repayment of a credit line);
- deductions to affiliated services and other B2B partners (for the rental of hosting, the use of software, and the connection to a security system);
- payment of salaries to staff and social contributions;
- payment of taxes, duties, and fees;
- marketing and advertising costs.
An excellent way to reduce expenditures is to outsource some of the functions.
Most often, representatives of the iGaming sector delegate the following tasks:
- promotional marketing;
- accounting and legal services;
- technical support.
For example, it is possible to order a technical assistance service for casino visitors. Thus, entrepreneurs will be able to reduce the cost of paying wages, save on the rental of the office space, and buy cheaper computer equipment (printers, faxes, monitors, modems, and the video communications system).
Expenses for the maintenance of a licence depend on where the company is registered. Some jurisdictions (for example, the Isle of Man) require an annual renewal fee, while in other countries (for example, Malta), operators bear expenses only once since the permit is issued for 5 years.
To buy an online casino under the White Label agreement, entrepreneurs do not need to pay any licensing fees. The subsidiary works under a sublicence of the parent company and should pay royalties to it every month.
If we take the gross gaming revenue (GGR) as 100%, then after covering all expenses, operators will get 30–40%. If the net profit from the project is less than 20%, then the business strategy should be adjusted.
With the help of the specialists of Online Casino Market, you will be able to establish a profitable iGaming business with good payback.
Our product range includes projects for any budget, including:
- Key profit margins of an online casino are gross revenues and net profit. Their size is affected by the average check of gamblers and the size of operating costs.
- The main expenses of operators include the acquisition of a licence, payment of royalties and bank commissions, as well as taxes, marketing, and advertising costs. An excellent way to optimise the expenditure budget is to outsource some of the tasks.
- To promote the gaming site, entrepreneurs can use SEO optimisation, SMM marketing, and email newsletters. When businessmen cooperate with affiliates, they pay only for a measurable result.
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