How to Improve the Profitability of an Online Casino
Online casino income is one of the most pressing issues in the gambling world. Moreover, it concerns both players and owners. But if the clients of gambling clubs think about whether there is a chance to win, then businesspeople look at this question in a different way: is it worth considering online casino as a business at all?
We have asked WinWin Casino experts in what ways their clients increase their income from the activities of their own gambling house. We hope that the information below will be useful to you. You can also get an individual piece of advice and find solutions for your business by filling out the feedback form.
Perhaps it is best to start with a disclaimer: no gambling project will reveal the real amount of earnings. Therefore, it is almost impossible to know for a fact how much online casino earns.
However, there are two ways to estimate the approximate total revenue:
- Statistical data. You can consult the records from organizations that collect statistics around the globe. So, we will see that in 2016 the turnover of all online casinos in the world amounted to $44.16 billion. Divide this amount by the number of existing gambling portals and get the average casino earnings in the Network. This method is extremely inaccurate, as many projects exist illegally, but still gives an approximate guide.
- Tax return. Some countries reveal on a public domain available data on the profits of different companies. If you try, you can find a casino among thousands of enterprises. Then compare their balance sheet ratios and find an arithmetic mean of them. But keep in mind that tax returns rarely are transparent.
There is a third way. Probably, it the closest to our reality, because it considers the profitability of online casinos at the start and is based on the advice and opinion of “senior colleagues”.
Thus, the average cost of launching a casino with the purchase of a ready-made business, but not an independent opening, ranges around $15-20 thousand. The payback period is 6-8 months. In total, the average monthly income of online casino in the first half of the year is $2500.
As in the majority of enterprises, the profit calculation formula is simple:
All income – Casino maintenance costs = Net profit
- Income is the total amount of money that was credited to the casino account during the reporting period.
- Profit — the amount that remained after all taxes, salaries and where other expenses were paid. That is the money that the owner can take on.
To predict the profit you will receive, you need to know two components: how much money is received in favour of the casino every day/month/year, and on what expenses you need to allocate finances.
The gambling business has one unique peculiarity — the need to always maintain the level of the game fund. In fact, it is a cash pool from which the winnings are paid. And if a player suddenly hits the jackpot, the casino is obliged to immediately start the payment procedure. In other words, at any given time, the core game fund must be full.
At first glance, it seems that you can once invest a certain amount in the creation of an online casino, and then only deduct your money to pay taxes. We are obliged to upset you. Like any other business, a gambling site requires constant attention and costs for maintenance.
The Main Items of Expenditure of Online Casino:
1. Dues. How much you need to pay to the state and how much the casino owners earn — ultimately depends solely on the jurisdiction that issued you a license for gambling. Each country has its own conditions. Somewhere you need to pay a fixed rate, somewhere — a percentage of earnings. It should merely be observed that that taxes in the amount of up to 20% of the of profit are acceptable.
2. Staff salary. Of course, the online casino has an order of magnitude fewer employees than the land-based gambling house. But it is necessary for you to have good technical support (here you can add a permanent training of new supports), you will need the services of SEO-specialists and webmasters, as well as a team of marketers.
3. Advertising. One of the largest items of expenditure, sometimes it is even bigger than the amount of taxes. But these costs are justified. Probably, any businessman who has once launched advertising on the Internet knows: as soon as you opt out of advertising promotion, at the very same time traffic and income are declining.
4. Cash settlement with partners. It is a combined item, which may include several separate points:
- fee for the license operation;
- franchisee commission fee (if you have opened a casino on a franchise basis);
- monthly contribution for the use of software and/or gaming slots.
5. A commission fee of payment operators. From 1% to 5% of the of each operation amount. Be sure to include these costs in the business plan, because even for the first month of work quite a large amount is collected due to the fee.
Calculation of Project Startup Costs
Items of expenditure
Percentage of start-up capital
Purchase of software products
Recruitment of staff
Registration of guarantee bank deposit
From 100 thousand dollars
Main Expenses in the First Year of the Site Operation
Software technical support
From 50% of the estimated establishment revenue
Bonuses for Players
Sometimes casinos entice new customers with bonuses. For example, when replenishing a deposit of $100, another $100 are given as a gift. This cannot be attributed to financial costs per se. Rather, it is a marketing method of promotion. But if the player spends all $200 and wins $150, the casino will be in the red.
The profit of a casino per day depends on the number of people who have visited it. Therefore, the tips below are mostly aimed at attracting new players.
An international portal with different language versions and support of different currencies (roubles, euros, dollars), that also has a positive reputation, earns much more than a small local site with different gambling.
The so-called quality of users is also important. If you imagine the scale of the attractiveness of gamblers from the casino point of view, then at the very end would be:
- The user who logged in, registered, used all the bonus money or free spins and gone for good.
- High roller — a regular customer who makes large deposits.
Your task is to ensure that the majority of the players on this scale would be located closer to the high rollers. For what reason? This significantly reduces advertising costs. Because advertising is one of the biggest expenses, as you will recall.
Analyse Your Mistakes
Sometimes due to errors in the code of the site, search engines in the issuance lowered of your resource to a bottom position. Sometimes there are so many “tough” images on the site and the content is not optimized, that is why the pages are loaded for a very long time, and the user does not wait and leaves.
So, what you should do in this case? Contact an SEO specialist who will analyse traffic, fault statistics and download speed. After the errors correction, the site will be easy to find on the Internet, and the game will be pleasant and interesting.
Revise Your Advertising Strategy
Ideally, running ads can be reviewed every week. The world is dynamic, and situational or trending ads give the best results. Remember that it is up to advertising depends on, how much online casino earns.
It is necessary to change approaches in the promotion when:
- your site has high bounce rates: users visit the site, but leave almost immediately;
- a lot of money is spent but the traffic is low;
- players do not make deposits.
What is to be done? Try to order advertising from different experts, and look at the effectiveness of the proposed measures. Use all possible advertising means. And then you will be able to choose “the only one” contractor and to trust him the further promotion.
Work on Loyalty Increasing
Remember, we have been talking about high rollers? There is only one way to attract them: to gain their trust. Players must be 100% sure that they will receive every win. And rarely one of them starts a large deposit at once: first, guests test the portal for a long time, and only then begin to play at full.
What to do? You need to work hard on your reputation: always pay the winnings, teach the supports to be polite and friendly, respond quickly to any problem.
Develop your own system of motivation or reward similar to those used by supermarkets. For example, give a bonus for every fifth deposit replenishment or offer discounts on games on certain days.
Gambling business is the most promising type of business activity. And if beforehand novice operators entered the market only using their own resources, nowadays, there are a lot of alternative options. With the help of intermediaries, you can start working in the gambling industry with minimal initial investments.
In a highly competitive environment, the best solution will be to cooperate with competent specialists. Turning to Win-Win Casino, you will receive a full set of solutions that allow you to compensate for all the expenses in record time. We guarantee a full payback of the project for 6 months of work. With our help, you will be able to find individual ways to increase the income of online casinos.
Contact us in any convenient way to start working together on the development of your gambling enterprise:
- Skype: ww_connect.
- E-mail: firstname.lastname@example.org.
- Or leave a request via the feedback form.