Casino Project Success Secrets: What Growth Strategy to Choose

Any iGaming startup needs to expand. If a platform does not grow, then it is undoubtedly only second to its competitors, and the operator loses money. To avoid these and other problems, it is important to build a profitable business strategy.

Vertical Integration

It is often referred to as “expansion to related markets”. The process involves efforts to seize a larger share of the specific sector within which entrepreneurs work.

In gambling, this growth strategy is chosen by companies that plan to continue operating in the selected jurisdiction. They are licensed in a specific country (state or economic zone) and want to strengthen their presence in it.

The vertical development of iGaming projects is suitable for the most high-capacity markets:

• regions where all types of online and offline casino solutions are considered legal;
• countries with advanced economies and upper-income populations;
• territories with a stable regulatory framework.

This type of growth is based on a diversification strategy. The concept was first introduced by Harry Markowitz, the American economist, in the 60s of the last century. In his scientific article, the author called competent management of resources (monetary, labour, and material) a decisive factor for maximising the companies’ income.

Advantages of the Diversification of Activities

Let us consider why business owners prefer vertical development:

1. Revenue growth. Entrepreneurs continue to move on their path, improving the profitability of their iGaming platforms. Operating costs remain low (when compared with a horizontal scheme), which has a positive effect on KPIs.
2. Increase in market share. It is easier to achieve this result if you are promoting a gambling portal in an already familiar and understandable environment, rather than starting from scratch in a new region. Digital casinos that have chosen vertical expansion can enter the top 3 list of the most popular establishments with little effort.
3. Minimisation of risks. The distribution of resources in several areas and a balanced development strategy make brands resistant to various types of threats. These are economic shocks (such as crises and stagnations), sudden changes in legislation, financial issues (for example, large fines), and much more.

Improvement of an Already Existing iGaming Project

Operators can integrate new functions into their entertainment resources, change the bonus policy, improve the level of customer service, and take other steps that increase their market share.

The main goal of such changes is to attract new clients who are not satisfied with the current gambling offer. By focusing on their needs, entrepreneurs can expand their audience and generate additional sources of income.

Options for applying the diversification approach:

1. Expansion of the product range. The most common choice is the addition of live solutions, such as roulette, baccarat, Sic Bo, and Texas Hold'em. They correlate well with classic slot machines with built-in RNG. In many jurisdictions (for example, Malta or the United Kingdom), there is no need to obtain new licences to offer content that involves real croupiers.
2. Release of original games. The audience always responds well to unique offers. The fact is that the market has long been overloaded with the same type of slots with standard bonus rounds. Players want something new, and exclusive entertainment fully satisfies their needs.
3. Launch of promotions. In 2024, seasonal sweepstakes, thematic campaigns, and mini-quests will be especially in demand. Their main advantage is that they attract a huge number of users united by a common mission.
4. Improvement of the quality of customer service. The key to successful vertical expansion often lies in making the provided experience more unusual. For example, it is possible to integrate a chatbot based on artificial intelligence or implement content distribution for VIP clients. Even minor changes can become a catalyst for the development of an iGaming platform.

Almost all large casinos use the vertical growth strategy. Many top vendors (Pragmatic Play, Novomatic, and iSoftBet) started with the release of slots, and over time, they covered other business areas as well.

Addition of New Activities

The integration of a bookmaker line into the portfolio of an iGaming site can be a classic example of such an approach.

Its advantages include the understanding of the market by operators, as well as their awareness of the laws and ways to interact with the audience.

In this case, entrepreneurs are familiar with the peculiarities of the gambling business: they know how to allocate a budget, have proven B2B partners (software vendors and hosting providers), and are well-versed in the launch of successful advertising campaigns.

The betting sector is a completely new area of activity for casino platforms. Operators must carefully prepare and take into account all the pitfalls. This is the only way to obtain a positive result from vertical expansion.

Products from 888 Holdings are an excellent example of a successful combination of gambling and sportsbook offers. The company has a branded website, a bookmaker’s office, a lottery portal, etc.

Horizontal Development

It means access to markets in new geographic regions and/or economic branches.

Attempts to compete in unfamiliar jurisdictions bring both significant potential benefits and many risks. For this reason, the horizontal strategy is most often chosen by experienced businessmen who have already achieved success and recognition in their home country.

In the gambling niche, scaling takes place, first of all, via the expansion into new markets.

Companies need to:

• obtain a licence from the local regulator;
• study the legislation;
• understand the preferences of the target audience.

Most European providers choose the horizontal development scheme. Thus, Playtech has permissions in more than 30 states. The brand is focused on the production of innovative slot machines with exciting graphics and attractive bonuses.

Why Entrepreneurs Need to Scale Their iGaming Projects

The main advantages of such a decision include the following aspects:

1. Growth of the customer base. Another country means new opportunities to attract and retain the target audience. Operators should choose large markets with higher-income populations.
2. Image indicator increase. International gambling firms are always more popular with players and B2B partners. The fact that a firm can enter foreign markets means that it has enough financial and material resources. On a subconscious level, clients and counterparties respect such an enterprise, trust it with their money, and build partnership relations.
3. The use of a strong labour market. These are experienced programmers, web designers, architects, QA engineers, marketers, and other specialists in their field.
4. Revenue growth. The chosen strategy is fraught with risks. If scaling goes smoothly and without complications, a good profit is guaranteed. The horizontal expansion is a long game. To succeed, it is necessary to spend more time and resources.

Options for Project Scaling

Let us consider the most popular approaches adopted in the casino industry:

1. Replication of an already existing business model in a new market. If entrepreneurs have already achieved success in their home countries, then there is no need to radically change the structure of their companies and the provided services. The chosen development model will bring a good income in the new jurisdiction as well.
2. Performance of the majority of tasks in-house. Instead of paying third-party suppliers, operators can build the necessary infrastructure without external help. A striking example is the independent creation of content or promotion of an iGaming startup.
3. Joint venture enterprise. In this case, business owners can team up with like-minded people to make a unique and high-quality product. For example, in 2014, there was a collaboration between Samsung, Facebook, and Oculus Rift. Together, they released one of the world's first smartwatches, the Galaxy Gear, and a professional headset for VR games.

The Choice of a New Country of Operation

The first things you need to pay attention to are the regulatory framework and conditions for obtaining a licence. In 2024, only legal firms will be successful, and managing an underground project will result in a penalty and problems with law enforcement agencies.

Before launching an iGaming platform in another jurisdiction, it is important to study:

• rules for the issuance of a permit and its validity period;
• features of the legal entity registration (formation of authorised capital, opening a bank account, and statement on the account in tax authority);
• restrictions on age, maximum bet, and the duration of spins;
• taxation nuances;
• requirements for advertising entertainment for money.

The choice of country is also affected by the demographic and economic situation in the region, as well as the availability of government support. If all these factors coincide, then the state is considered attractive for casino business scaling. However, entrepreneurs should remember that in this case, the competition will be higher.

The Main Things about the Expansion Strategies of iGaming Projects

Key characteristics of both options:

• The vertical scheme is based on the fact that operators improve platforms that they have already launched. By offering a wide product range, original bonus programs, and high-quality customer service, they can attract a solvent audience and increase profits.
• Horizontal development is when brands decide to enter new markets. Business owners receive a licence in another country and work there. This option requires a lot of time and resources, so it is unlikely to be suitable for beginning entrepreneurs.

Key advantages of the branded platform:

• a multi-channel environment with support for continuous gameplay in land-based kiosks, as well as on PCs and mobile devices;
• large selection of slots and bonus features;
• pleasant visual design;
• quick integration in a few clicks.