Welcome!

By registering with us, you'll be able to discuss, share and private message with other members of our community.

SignUp Now!
adv ex on 5 january 2024
adv ex on 22 February 2024
adv ex on 22 February 2024
banner Expire 26 April 2024
Rescator cvv and dump shop
banner expire at 13 May

Yale lodge shop
UniCvv
banner Expire 1 April  2021

How much do online casinos earn

RedX

TRUSTED VENDOR
Staff member
Joined
Nov 26, 2020
Messages
598
Friends today we will talk about how much money online casinos earn!
Many investors, having only briefly familiarized themselves with the principles and costs of the gambling business, decide to open their own online casino. Their calculations are based only on bare numbers: how much players will win and lose. As a result, most of the newcomers close during the year. In this article, we will look at the "pitfalls" and business plan of this enterprise and answer the question:"How much does an online casino earn?". We will analyze the opening of a licensed casino on whitelabel, as working on a franchise is a much more affordable and faster option to open your own gambling house, and scripts are a thing of the past.

Pitfalls:
Let's immediately define the terms that will be used in this study.

  • Deposit - the amount that the player deposits to their account. Payout - the amount that you withdraw to the player's payment system.
  • GGR - total income-is calculated as the amount of deposits minus the payout amount. At the same time, it does not matter what costs the operator incurred. Also, this parameter does not make any difference between bonus and real money bets. As a rule, game manufacturers require you to pay their percentage of this parameter.
  • NGR - the player's net income. This parameter already counts expenses. It is calculated from, as (amount of deposits) - (amount of payments) - (amount of bonuses) - (amount of admin fee (as a rule, this is the amount paid to payment systems)).
  • Royalty - payment to the holder of a whitelabel (franchise). This is done on a monthly basis.
  • A negative balance is a situation where players win more than they lose and you get a net loss. This situation often happens if you have several small players and one large one. If the big guy is lucky and does not lose all the winnings back, then, in fact, you will pay not only payment systems and royalties for the franchise, but also the player out of your own money.
  • Affiliate sites are sites about casinos that earn money from affiliate programs. It is with their help that you will attract new players to your casino. The flow of players is called traffic. In 2021, many affiliates will require you to pay a fee for adding to the site (300-2000 euros).

Before starting work:
The main costs that must be paid before starting work: the fee for creating a casino (about 15,000 euros. This includes two game providers.), a fee for developing a unique template (about 5000 euros), a fee for each additional game provider (Netent, Microgaming, Yggdrasil, and so on). The cost varies, but we can say that large operators will cost you (on average) 5000 euros (small ones-2000 euros). An insurance payment that the franchise owner will use to cover players ' winnings. This amount can vary from 5,000 to 10,000 euros. In total, you will have to pay about 30,000 euros before starting work. It is worth noting that some franchise owners require the opening of an official company for settlements, and some are ready to send money to your personal Skrill. The firm will cost you around 3,000 euros per year.

In progress:
Some of these expenses become apparent only after signing the contract, so it makes sense to carefully read the information and include it in your business plan for opening an online casino. You will continue to pay as you work:

  • Whitelabel royalties. The franchise owner will require you to pay a monthly fee, which will depend on your results, but has a minimum threshold. As a rule, you will pay from 6 to 9% of GGR, but not less than 3000 euros. An important point to note is that even in the case of negative results (players won more than they lost), you will have to pay a minimum amount of royalties (3000 euros).
  • Royalties to operators. Direct game creators are probably the most profitable position in this "food chain". They take from 10 to 20% of the players GGR. Payment is also made once a month. Here everything happens a little more honestly: the negative balance is transferred and taken into account in the next month. Although, a lot depends on the franchise holder.
  • Payment systems. This is probably the most important point in your financial business plan for opening an online casino. It is important to take into account that if Western payment systems (Skrill, Neteller) charge about 3-4% for entering money and 1-2% for paying, then Qiwi and Yandex are just a robbery. For a deposit using these payment systems, you pay 10% of the deposit amount. Deposits from bank cards will cost you 2.8% of the amount.
  • Payments to affiliates. As of March 2021, the average percentage of payments to partners on the white label is 50% of NGR. In other words, if a player came via an affiliate link and lost 100 euros by adding money to them with Qiwi, the affiliate will receive 50% of 100 euro: 10% (Qiwi) - 20% (payment to the slot creator) = 35 euros. For adding to the site, large affiliates will require either a fixed payment (300-2000 euros), or increased interest from NGR (60%+).
  • Payment to employees. This includes support, promotion development, affiliate search, and so on. You will have to pay the affiliate manager from 1500 euros per month.
  • If your main goal is players from Russia, then you will have to create a mirror of your site (since your site will be blocked by the RCN). For the first mirror, the franchise holder will ask for 1500 euros and 150 euros for each subsequent mirror. Sites will be blocked once every 10-30 days.

Business plan for opening a casino:
Now let's try to calculate how much the online casino earns. Let's assume that your main goal is the CIS market. Let's set the payback period for the project for a year and calculate how much money players must lose per month to meet these conditions. To simplify the model, we will throw out a fixed fee to affiliates and assume that they all agree to add you to their sites with a 50% commission. In fact, they will ask for a higher percentage and demand money for adding it. We invite you to evaluate the reality of this business plan for yourself:

  • Opening fee: opening your own casino, including an offshore company - 33,000 euros.
  • Payment to the affiliate manager for 12 months (minimum 1500 euros per month) - 15 000 euros.
  • Let's assume that players will make deposits from different payment systems, never win, and never withdraw money. For the calculation, we will take an optimistic 15% for this position, since players will win (on average) 50% of your deposits and withdraw them, then top up your account again.
  • Royalties will add 6% (for the franchise) and 20% (for slot creators) = 26%. To simplify the calculation, let's assume that you won't have any deposit bonuses. Please note that until you reach the value of 50,000 euros, you will pay the minimum deductible value of 3,000 euros, regardless of interest.
It turns out that we need to compensate 48,000 euros for 12 months. At the same time, we will give you 15% of our net income (to payment systems) + 26% (to slot creators). You will give another half of this amount to the affiliate - 30% of gross income. Let's count: 41% for costs and 30% for affiliates. About 30% will be left to you. These 30% (in fact, a little less) will be the earnings of your casino. To reach zero, you need players to lose 145500 euros, or about 12,000 euros per month. Add here site blocking and mirror creation and overhead.

Risks when you will have to add money
At the same time, you get the following risks, in which you will have to add your own money to the project to open a casino:

  • If one of the players is lucky enough to win big, then you will have to report money for the payment of this prize. It is important to understand that high-variance slots from Netent can give out 100,000 euros for a bet of 25 euros.
  • If you do not earn anything, or your balance is negative, the franchise holder will require you to pay a minimum payment of 3000 euros for each such month.
  • CIS affiliates continue to be blocked by the RCN (Roskomnadzor). First, the time between blocking your casino is reduced. Secondly, affiliates that are blocked cannot consistently deliver traffic, regardless of your agreements with them.
I hope you were interested in this article about casino profitability!
 
Top Bottom