Starting a successful online casino business can be daunting, as new operators need to learn the ins and outs of online gambling history, recent industry developments and trending topics, the local and international regulations overseen by the respective regulatory control authorities, casino platform and game software and reputable local and global providers, and so much more. Read our comprehensive guide to learn more about the industry requirements and what it takes to get started in the iGaming career field.
Key Points to Prepare When Starting a Casino Online
Before deciding to launch your new online casino business, consider these critical areas to plan for sustainability and success:
- Perform market research to determine your competitors and target audience.
- Create a scalable business plan and a robust operating strategy.
- Assess the cost of licensing in various jurisdictions, as well as integrating secure payment systems.
- Evaluate the expenses associated with branding and developing an online gaming platform.
- Consider the cost and responsibilities of your daily casino operations.
- Research the financial expectations and plan for the initial costs of your investment.
What Are the Legal Requirements to Open Online Casinos?
No universal European framework for regulating online casinos exists. Instead, European countries develop and enforce their own national regulations, aligning them with the EU Directive 2000/31/EC governing e-commerce within the Union.
Additionally, prospective casino operators should analyse the local regulations from two different perspectives: regulated online gambling markets versus unregulated, which can be further subdivided as follows:
- Regulated A: A liberal gambling market with online licences issued to multiple private operators.
- Regulated B: A monopolised gambling market dominated by one state-owned or private entity.
- Unregulated A: There’s no legal framework and online gambling is explicitly prohibited.
- Unregulated B: There’s no regulatory framework, but online gambling is not explicitly banned.
How to Choose the Proper Licensing Authority?
Deciding where your online casino business will be licensed is a pivotal step that requires careful consideration. These are the factors that you need to evaluate before choosing the licensing jurisdiction and online gambling authority:
- Ensure the jurisdiction provides you with access to your target audience and markets.
- Verify that your platform complies with the regulatory requirements and standards.
- Compare the licensing costs, as well as other fees associated with the gambling concession.
- Assess which casino software and game providers are available for your local jurisdiction.
- Evaluate the potential for integration of particular payment solutions.
Some of the most common international licencing providers for online casinos include the Malta Gaming Authority (MGA), whose recent updates on its licensing requirements reinforce their adaptability and reputation as an online gambling regulator, and Curaçao eGaming (CEG), an extremely affordable, accessible option for operators. The Isle of Man Gaming Supervision Commission (GSC) is another popular option offering a robust regulatory framework committed to ensuring the best operator and player protections.
Recent Updates to Online Casino Licensing Legislation
The Malta Gaming Authority (MGA) has established itself as a leading online gambling licensing authority. The recent updates on its licensing legislation reinforce the MGA’s status as a foremost online gambling regulator.
One of the key stipulations in this regard is Bill 55, which allows gambling companies to disregard rulings in foreign countries, maintaining that a ruling in Germany, for instance, will generally not be enforced in Malta.
Additionally, the MGA recently applied more stringent compliance checks and mechanisms, such as stricter anti-money laundering (AML) protocols and player protection rules, closing down casinos that received a lot of complaints and criticisms. It also further strengthened its already established responsible gambling requirements but has yet to enforce an advertising ban.
How Much Does It Cost to Open an Online Casino?
Setting up a casino involves substantial upfront costs. Consider the following expenses that you will incur during the initial stages of running your own successful online casino business:
- Fees related to obtaining a licence – costs will vary depending on the jurisdiction and will include application fees, yearly renewal costs, as well as jurisdiction-specific expenses, such as the Key Person licence issued by the Kahnawake Gaming Commission (KGC), a Canadian-based, multi-jurisdictional provider.
- Platform and brand development expenses – building a casino platform that is functional, visually appealing, and carries your distinct brand identity is essential but will also run up significant expenses.
- Software development costs – whether you opt for white-label, turnkey, or your own custom casino software, it is crucial that you plan for the costs related to integrating the gambling software so that it meets regulatory requirements and appeals to players.
- Marketing campaigns and promotional expenses – attracting target market players is contingent on implementing an effective marketing strategy, creating loyalty schemes, running social media campaigns, and SEO.
It is important to note that your initial budget will likely need to be adjusted many times over during the first months of operations. However, as the online business stabilises and grows, it is to be expected that costs will become more predictable.
How Do Online Casinos Make Money?
There are multiple ways in which new online casinos can generate revenue early on. These include:
- Deciding on what house edge to use to maximise profits but not drive away players.
- Offer various bonuses to increase player engagement, resulting in more frequent deposits.
- Provide players with regular incentives that facilitate sustained activity over long periods of time, such as loyalty programmes and progressive jackpots.
What Is It Like to Work as an Online Casino Business Owner?
Managing players, running marketing campaigns, overseeing financial operations, and ensuring your business complies with jurisdictional requirements and changes in regulations are just some of the daily tasks you will need to handle as the owner of your own online casino. Operating an online casino also involves managing essential casino staff, such as:
- General Casino Manager: A key position that needs to be filled with an individual adept at overseeing day-to-day operations, managing staff, staying on top of finances, and possessing an extensive knowledge of the iGaming industry.
- Live Game Dealers: An online casino business owner is unlikely to come in direct contact with live casino dealers, as live casino operations are usually outsourced to specialised studios. However, knowing which live casino providers employ the most skilled croupiers can go a long way to providing players with a more authentic experience.
- Customer Service Personnel: Round-the-clock support available via multiple channels is essential but so is the staff that provides it. Employing qualified personnel and training to offer top-notch customer service is paramount in a competitive online casino industry. Additionally, there is always the alternative of outsourcing, as well as automating this process by using AI chatbots.
Online casinos are scalable businesses. In other words, even though platforms operate 24/7, it is not uncommon for casino businesses to employ just a handful of people while ensuring smooth and efficient operations.
A Step-by-Step Guide to Starting Your Online Casino Business
Your online casino business is much more likely to be a success if you adopt a methodical approach, such as the step-by-step guide outlined below.
Research the Future Market
Analyse emerging trends and demographics you will target. Try to differentiate your online casino products and services from competitors.
Think Out Your Strategy Thoroughly
Create a strategy that covers financial planning and operational aims. Developing a comprehensive approach to ensure compliance with regulatory frameworks is a must too.
Pick a Trusted Gambling Software Provider
Spend some time to conduct detailed online gambling market research on software providers that best align with your brand’s goals. Choose software solutions that are customisable, reliable, and scalable.
Choose Secure Payment Service Providers
Integrating secure and trusted traditional payment methods and payment system providers is essential to the success of your business. So, partner only with safe and user-friendly banking systems with a proven track record in the iGaming industry.
Decide What Type of Online Casino You Would Like to Start
When starting an online casino, have a clear idea of the type of casino you want to operate. Some casinos specialise in live dealer games, while others focus on online slots. Similarly, many platforms integrate sportsbooks too.
Apply for and Obtain a License for Legal Operations
Diligently prepare all the necessary documentation to obtain a gambling licence. You will also need to convince the licencing authority you have the people and finances to implement KYC and AML procedures, ensure compliance, and enable data protection.
Create a Brand, Web Platform and Mobile App to Attract Players
Invest money in creating professional branding. Designing your platform so that it can be easily accessed via desktop and mobile devices will also enhance the user experience and improve player engagement.
Identify the Target Audience and Market Your Brand’s Games
Tailor your online casino offers so that they attracts a diverse audience and help to retain your existing players. Explore different ways and marketing campaigns to bring your gaming products closer to your prospective players.
Tips to Give Your Online Casino Business a Competitive Edge
Providing players with a superior online gaming experience is contingent on being better than your competitors. Here are some tips to gain an edge in the competitive iGaming industry:
- Monitor trends and set aside time each day to research online casino market trends.
- Seek growth opportunities that are within your budget.
- Adopting a mobile-first approach can pay dividends if done properly.
- Stand out with your distinctive brand identity.
- Stay flexible and be prepared to navigate obstacles and capitalise on opportunities instantly.
- Keep abreast of the latest trends in the industry so that you can stay relevant.
What Is a White Label or Turnkey Software Provider?
New casino businesses often opt for white-label or turnkey software solutions. Small operators and startups tend to go for white-label software, as it allows them to operate under the provider’s licence but retain their custom branding. The downside is that these are profit-sharing models. However, the technical support managed by the provider offsets this disadvantage.
In contrast, turnkey software is better suited for established operators. Turnkey software providers offer complete casino solutions. Unlike white-label solutions though, a casino operator must obtain its own licence. Turney solutions come with fully customisable branding, and the operator keeps the entire revenue. However, operational responsibility is significantly higher.
How Do API Solutions Work for Online Casino Software?
APIs or Application Programming Interfaces are communication mediums that allow systems to exchange data in real-time, meaning changes made to one system are applied to another as well. That makes APIs essential for the success of online casinos and casino owners as these tools facilitate seamless customisation of platforms and offer more high quality games, as there is no need to develop custom online casino games from scratch each time. In doing so, APIs improve the user experience, ensure compliance with regulatory requirements, and help operators monitor performance.
On-the-Go Gaming & Integrating Mobile Apps
Whether through pre-built mobile solutions or custom platform development, mobile integration is crucial for online casino startups. Being able to offer a seamless gaming experience across multiple mobile devices enhances user engagement and ensures broader reach, resulting in improved player acquisition and retention.
Conclusion
Setting up an online casino can be a rewarding experience in more ways than one, however, a strong foundation is essential for any future success. Therefore, it’s imperative to diligently plan and prepare each step in planning your new online casino business, including looking to future industry trends and newer technologies. Recently, Ace Alliance hosted an interview series with iGaming professionals at the SiGMA World Europe event, where our CMO Magda Klimko-Aydin met with Endorphina’s Lenka Dinozzi, who offered a great tip going forward: “For 2025, we will place a bigger emphasis on AI and I think that’s going to shape the future of iGaming.”
You can stay on top of the latest trends in iGaming with Ace Alliance, providing expert guidance and industry updates, allowing you to always stay one step ahead in the ever-evolving online gambling industry.