Is owning an online casino really profitable?
Many of the top 10 best gambling sites in 2018 were only opened less than 10 years ago. That means most casino sites launched in the early 2000s either closed down or have been overtaken in popularity by newer platforms.
Unlike many industries, online casinos have the luxury of serving global customers with a few licenses. A startup could get a license in the Caribbean island of Curacao and welcome players from Europe, Asia, Americas, and Africa.
On one hand, such a privilege opens up worldwide markets for gambling sites. On the other, it invites stiff competition and threatens casinos’ profitability. So, can a startup online casino make profits in 2019?
Almost every online casino these days welcomes new players with free games and bonuses. Any casinos that choose not to offer free bonuses risks of going out of business. Players expect to get a bonus for just signing up on the account. They expect another bonus for making a deposit, during holidays and monthly for being loyal to the business.
What many players may not know about these bonuses is that they invite them to spend actual money on the casino. If you get 50 free spins for signing up, you are invited to make a deposit to have access to any wins made from the free spins.
With many casinos, one of the rules of withdrawing wins from bonus wins is to play multiple times. The rule could be that you play 35 slot games with your personal deposit after which you can withdraw your wins. Some have more relaxed rules but at the end of it, you’ll usually have spent more money than the bonus given to you.
Almost no online casino has a 100% payout rate. If you win €100 on a slot game, expect 90%-98% of the profits. The house keeps the remaining amount as profits. Traditionally, gambling sites had high house edges, sometimes as high as 20%. Times have changed and you can find platforms with less than 1% house edge on popular games.
Even though you don’t get 100% of your profits, the modern payout rates are impressive. If you would love to invest in gambling, find new online casinos at find new online casinos at newcasinos.com and join a few of them. You can invest in the games or use them to learn more about the industry
Keep in mind how winners are picked. Casino game winners are determined by a random number generator algorithm. Depending on how it’s programmed, one player wins something after a specific number of attempts.
The odds of winning in the French roulette when betting on a black or red color outcome is 50-50. There are only two colours anyway. So, it’s either the ball lands on a black or red color. With slots, the outcome could be 20 to 1 or even bigger odds. In such cases, casinos keep the wagers for players who lost and a part of the winners’ money.
Low Operational Costs
Operating an online casino is much cheaper than running one in Las Vegas. You don’t pay any land rates. You don’t need waiters, free drinks for players and a multitude of lights. In any department, you require fewer people to run an online casino than in a land-based facility.
With a new gambling website, an office is 15 people could be enough to handle thousands of players. Partnerships with tech companies mean you can forego an IT department and only hire professionals when you need them. Marketing can be automated and finances don’t need a lot of staff to handle.
For a serious startup, the huge investment only comes at the beginning. You know-the heavy cost on licenses, software leases, building a website and liquid cash to handle operational costs. After that, marketing and good services are what keeps players to a platform. Of course, the platform must be innovative to beat its competitors. But the cost of low costs of running an online casino makes it easy for gambling sites to make profits.
Affiliate Marketing Partners
Affiliate marketing changed the way companies promote their services. Instead of spending millions on adverts, sites partner with professional marketers. An affiliate marketer could get 20% of everything amount deposited by a customer they referred to the website. If she refers 100 people and they each deposit $100, the casino gets $10,000. The marketer earns 20% of the amount, which is $2500.
The top 50 casino websites have hundreds of affiliates that work for them. The marketers promote the websites’ platforms worldwide, drawing huge crowds of players. If a gambling site also provides good services and multiple, addictive games, they get lots of customers from marketers.
Additionally, casino sites don’t rely on affiliate marketers for customers alone. They run regular bonuses to keep existing customers. They advertise their services all-year round. Betting sites partner with sports teams and do charities just to promote their brand names. When all these marketing efforts are done properly, making profits becomes guaranteed.
Low Taxes and Other Tricks
Many countries used to impose exorbitant tax rates for online gambling sites when the industry was new. Germany, France, Austria, and Luxembourg still tax online casinos in excess of 75% as taxes. However, more countries are introducing lax taxes and legalizing gambling-related activities.
Countries like Malta and the UK have become tax havens for online casinos. These countries have respected licenses and regulatory rules. But at the same time, they have tax rates not too high as to threaten the profitability of businesses.
Besides Malta and the UK, there are multiple countries where startup gambling sites can acquire licenses. The Caribbean Island of Curacao offers one of the most popular gambling licenses in the industry. Spain, Australia, Canada, and Gibraltar have also become respectable license providers in recent years.
With a good license from a country that is progressive on tax rates, earning profits become easy. If the casino also invests in good marketing skills, quick support services, and multiple bonus rewards, attractive players no longer become a problem.
Not all online casinos succeed. In fact, many of them close down after failing to make enough profits to keep up with software licenses. But with good management and aggressive marketing, many platforms succeed. The most innovative casino sites break boundaries and attract players from around the world.