A license can give the right to conduct a gambling business in a certain region, throughout the country or internationally. In addition, such permission may relate to a particular class / group, which indicates a permitted type of activity. For example, in Malta there are 6 classes of gaming licenses:
- Class 1 - repetitive games (lotteries, online casinos, skill games);
- Class 2 - bets (sports, e-sports, fantasy sports, significant events);
- Class 3 - promotion of other people's gambling for a commission;
- Class 4 - ensuring the operation of remote foreign platforms;
- Class 1 on the 4th - management of a casino on someone else's remote platform;
- Class 3 on the 4th - promotion of other people's platforms for a commission.
The class of a license affects its value and the amount of taxes.
In addition to the license fee, you will most likely have to pay a certain amount as payment for some additional costs that differ depending on the jurisdiction. So, in Canavec, you need to pay 15 thousand Canadian dollars for technical verification of software, in Antigua and Barbuda - 15 thousand dollars for checking documentation and another 100 thousand dollars for the development of gambling (annually, regardless of income).
Summarizing, we can say that a full license in offshore companies will cost 100-300 thousand dollars, for the European Union - from 300 thousand to 1 million dollars. If this goes beyond your budget, then you can reduce the licensing costs of your casino by choosing a different business model:
- Obtaining a license from your software provider costs from 30 to 300 thousand dollars (similar to a franchise). The supplier does everything except marketing and site management (CEO, payments, design, content, etc.). With this approach, you can work under a supplier’s license in exchange for monthly / annual rental payments.
- The work of sublicense is even cheaper - from 5 to 60 thousand dollars. For example, on the Isle of Man, sublicensing costs 5 thousand pounds. In this model, you become a referral of the license holder and are engaged only in marketing and attracting customers in exchange for a share of profit.
4. Website and application creation
In order for your platform to interact with players, you need to create a website and a mobile application
. Their development begins with the choice of functionality. In addition to the functions of the gaming platform and the games themselves, this:
- Registration and profile management. To start playing, the user must go to the platform, specify the payment details and replenish the deposit. To do this, you need the registration function and user profiles. Registration can be done via phone, email or Google account, Facebook or other social network.
- Payment system. Players will deposit / withdraw funds through payment gateways, the interface of which will be posted on your site. The simpler and more convenient it is, the better. In addition, it is also important that the players have as many options as possible for input / output and have the ability to set the maximum amount that users can instantly cash out.
- Customer support. Players should be able to contact the online casino support 24/7. This will help build a good reputation, which will help attract players and, consequently, increase profits.
- Safety. To protect money on deposits and personal data, you need to protect traffic with SSL and other security tools.
- Bonuses. To attract as many players as possible, the site should offer a flexible and attractive bonus system (for registration, replenishment of a deposit, participation in some games, repeated replenishment of deposits, etc).
- Affiliate Payments. At first, most of the players you are likely to bring with the help of referral programs, so it is important to think in advance about what they will be: to whom, when, how much, for what and for how long to make payments.
The list of functions can be expanded due to the support of several languages, text chat, rating system, push notifications, support for VR and AR, multi-currency payments,
etc. Their implementation will increase the cost of development, but at the same time you will have the opportunity to stand out among competitors, creating a unique positive user experience.
The cost of creating a website and a mobile application depends on the development approach:
5. Marketing promotion
How much and on what advertising casinos in the UK spent in 2017 (Source of the image: GambleAwareng
The cost of promoting an online casino can vary from 20 to 100 thousand dollars a month. The high cost is due to the prohibition of gambling ads on Google, YouTube, Facebook and Instagram. As a result, you will have to spend quite large amounts on creating SEO content
and paying partners.
The best partners are sites that are at the top of the natural search engine results of Google, Baidu, Yahoo, Bing, Ask and Yandex for such key queries as “online casinos”, “best online casinos” and “top online casinos” ". To attract such partners, you will need to offer them fairly large transactions for the distribution of income - from 40 to 60%. This will take up to 80% of the budget of your marketing expenses.
Payments can occur according to one of the following schemes:
- CPA (purchase price): up to 500 dollars. The casino pays the affiliate partner a fixed amount for attracting a player who has registered on the online casino site and replenished the deposit.
- Revshare (income distribution): 25% or more of a player’s loss. The casino pays the partner a percentage of the player’s loss. The amount of interest is usually determined during negotiations. Usually it is 25%, but at the start of the casino it can pay up to 60% of its profit.
The remaining 20% will go towards creating SEO content
that will compete with other casinos as well as with your partners. Which is partially inefficient, but you will not have a choice, since this is the norm in the gambling market.