Do you want to start an online casino company? If YES, here is a complete guide to starting an online casino business with NO money and NO experience plus a sample online casino business plan template.
First things first, when it comes to starting an online casino you must first own a website. Your website is the platform through which you can run your business. Since it involves financial transactions, you must build a website that is free from hackers.
Of course, it is a difficult task, because hackers improve on their games daily. Nonetheless, your website manager should always fortify your webpage to make it impossible for them to breakthrough it. Also, ensure that you build a website that has language options.
Another invaluable advice for you is that you chose a thorough bred professional website designer and manager to help you build and handle your website.
Chances are that whilst on the internet you might have been to a casino site before. The advent of the internet gave birth to the Online Casino. It actually started around 1994/1995, and prior to this time people who gambled went to Casinos around them to play their games.
The good news is that you don’t need to visit the popular Las Vegas to play that game which you so desire. This is because you can now play it right from your internet device from any part of the world while making some cool cash.
Starting an Online Casino business is not so much a difficult task as most people think, especially if you are in a country where the legislation is easy for such industry. No doubt starting an online casino would require that you meet certain standards.
So, if you have done the relevant ICT training, then you might want to venture into this business. If you have been tinkering with starting your own online casino company but do not know how to go about it, then you should read through this article to get the needed guide.
Steps to Starting an Online Casino Company
1. Understand the Industry
The global casino and online gambling industry is made up of legal online gaming on casino-type games and gambling facilities that offer table wagering games and other gambling activities, such as slot machines. These establishments often provide food, beverage and lodging services.
If you are a key watcher of the Global Casinos and Online Gambling industry, you will agree that the industry has brought a major shift in the industry’s key markets. More precisely, the last five years has indeed signaled a swing of revenue growth from the united states toward Asia.
Despite the fact that new markets in the United States are opening up as state governments look for more sources of revenue, the swing in revenue toward Asian markets has increasingly gained permanency for players in the industry. In the coming years, the industry performance is expected to continue to improve howbeit slowly and economic volatility in China is expected to continue to hamper the revenue growth for the industry.
The Global Casinos and Online Gambling industry will continue to experience growth in all parts of the world especially in developed countries such as United States of America, Canada, united kingdom, Germany, India, Australia, South Korea, Japan, China et al.
Interesting Statistics About the Industry
Statistics has it that in the United States of America alone, there are about 5,324 licensed and registered casinos and online gambling companies scattered all across the length and breadth of the country and they are responsible for employing about 2,194 employees.
The industry rakes in a whooping sum of $278 billion annually with an annual growth rate projected at 2.0 percent within 2011 and 2016. The organizations that are leaders in the industry are; Las Vegas Sands Corporation and SJM Holdings Limited.
A recent report published by IBISWorld shows that the Global Casinos and Online Gambling industry has a moderate level of capital intensity. The report stated that the industry is a personal service and hospitality industry that requires face-to-face contact for functions such as table betting and servicing slot machines.
It also requires significant labor input in areas such as food and beverage service, cleaning and maintenance. The report further stated that a significant capital investment in building and equipment is required to establish a gaming facility.
This includes slot machines, gaming tables, bars, restaurants and security systems. Industry clients typically visit casinos to gamble, watch live entertainment, dine at a restaurant and shop at boutiques.
Some of the factors that encourage entrepreneurs to start their own online casino companies are the growing patronage of online casinos by internet users, and of course the fact that the business is easy to set up and if the right structure is put in place, it will only require minimal workforce and minimal supervision.
Over and above, starting an online casino company requires professionalism, a good grasp of gambling and how the ICT industry works. Besides, you would need to get the required certifications and license and also meet the standard expected for players in the industry in the United States. The industry is heavily regulated to guide against fraud and criminality.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographics composition of those who patronize online casino sites are not restricted to people in your immediate community or state, but it cut across adults of all genders who have internet access and perhaps a credit card facility all across the globe.
So, if you are looking towards defining the demographics for your online casino company, then you should make it all encompassing. It should include men and female most especially people over 18 years old from all across the globe.
3. Decide Which Niche to Concentrate On
Although most online casino companies tend to operate a general online gambling business that involves every business activity that a standard online casino company is expected to offer. That is why it seems that there are no niche areas in the industry.
But on the other hand, some online casino companies may decide to also be involved in operating licensed casino gaming facilities alongside operating online legal gaming facilities.
The Level of Competition in the Industry
The level of competition in the online casino industry does not in any way depend on the location of the business since all online casino companies can operate from any part of the world and still effectively compete in the global market.
When it comes to the online casino business, distance is never a barrier when competing for clients since the world-wide web is a great leveller.
What most online casino patrons want is safe, secured and seamless platform that can guarantee fast payment, hence they are ready to patronize any online casino company no matter the part of the world they operate from as long as they have good track record and can pay winners as at when due.
But over and above, there are several online casino companies scattered all around the United States and in the cyber space.
So, if you choose to start your own online casino company in the United States, you will definitely meet stiffer competitions not only amongst online casino companies in the United States, but also all over the globe. Besides, there are larger online casino companies that determines the trends in the industry and you should be ready to compete with them for clients.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands who perform better or are better regarded by customers and the general public than the others.
Some of these brands are those that have been in the industry for a long while and so are known for that, while others are best known for how they treat their patrons. These are some of the leading online casino companies/brands in the United States of America and also in the globe;
- Vegas Paradise Casino
- Jackpot City
- Spin Palace
- Jackpot Paradise Casino
- Cloud Casino
- 32 Red Casino
- Insta Casino
- Gaming Club
- Lucky Nugget
- Mr Green
- Cabaret Club Casino
- BGO Online Casino
- Ruby Fortune Casino
- Royal Vegas
- Luxury Casino
- Crazy Vegas Online Casino
- Platinum Play
- River Belle Casino
Online casino is one of those innovations borne out of the need for casinos and gambling companies to reduce cost of operation and maximize profit via the world-wide web. Online casino makes it possible for companies to cut down on overhead costs by conducting casinos and online gambling related aspects of their business virtually.
As an aspiring entrepreneur who is looking for a business that requires less stress and perhaps minimal start-up capital to start, then you can consider starting an online casino company.
The cost of running a standard online casino company when compared to the turnover you get can be poles apart (this is applicable when you have been able to establish your feet in the industry and you have loads of online gamblers visiting your sites on a regular basis).
Entrepreneurs that venture into online casino business can as a matter of fact start the business from their home and still make headway in the business. One thing is certain when it comes to the online casino business and most internet based businesses, you are sure of making profit when loads of people patronize your site.
As a matter of fact, the cost of running the business process from start to finish could be restricted to the cost of making phone calls, transportations and internet subscriptions, PR and in some cases materials such as fliers and handbills et al.
With that, it is easier to place a projection on the profit you are likely going to make if you are able to successfully get a clear figure of the number of patrons that patronize your online casino sites per month or per day et al.
5. Decide Whether to Buy a Franchise or Start from Scratch
When it comes to starting a business of this nature, it will pay you to start from the scratch as against buying a franchise.
Unfortunately, you can hardly find a franchise of an online casino company to purchase meaning that if you want to own an online casino website/business, then you must be ready to start from the scratch. This is so because the business is easy to start if you have the required expertise and it is still pretty much thriving and there are loads of opportunities available to aspiring entrepreneurs that are interested in the industry.
The truth is that it will pay you to start your online casino company from the scratch. Starting from the scratch will afford you the opportunity to conduct thorough market survey and feasibility studies before launching the business.
Please note that most of the big and successful online casino companies around started from the scratch and they were able to build a solid business brand.
It takes dedication, hard work and determination to achieve business success and of course you can build your own online casino company brand to become a successful brand with active patrons visiting your gaming platform from all across the length and breadth of the United States of America and other countries of the world.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own online gambling and casino company today, one of the major challenges you are likely going to face is the presence of well established online gaming and casino companies who are offering same services that you intend offering. The only way to avoid this challenge is to create your own market.
Some other threats that you are likely going to face as an online gaming and casino company operating in the United States are unfavourable government policies, the arrival of a competitor within your location of operation and global economic downturn which usually affects purchasing/spending power.
There is hardly anything you can do as regards this threats other than to be optimistic that things will continue to work for your good.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When considering starting an online gaming and casino company, the legal entity you choose will go a long way to determine how big the business can grow; some online gaming and casino company design their business and services for regional/community market, some for national market, while others are for international market.
Generally, you have the option of either choosing a general partnership, limited liability company which is commonly called an LLC, or a sole proprietorship for a business like online casino. Ordinarily, general partnership should have been the ideal business structure for a small scale online gaming and casino company especially if you are just starting out with a moderate start up capital.
But people prefer limited liability Company for obvious reasons. As a matter of fact, if your intention is to grow the business and have patrons from all across the United States of America and other countries of the world, then choosing general partnership is not an option for you. Limited Liability Company, LLC will cut it for you.
For example, Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. This is not so for sole proprietorships and general partnerships.
Limited liability companies are simpler and more flexible to operate and you don’t need board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your online gambling and casino company; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your online casino and gaming company, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your online gaming and casino company so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company; you will enjoy flexibility in ownership and in your management structures.
8. Choose a Catchy Business Name
Generally, when it comes to choosing a name for a business, it is expected that you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own online gaming and casino company, here are some catchy names that you can choose from;
- First City Gaming and Casino, Inc.
- Belly James Online Casino, LLC
- Triple Pee Online Casino, LLC
- Limitless Platform Gaming Company
- Peter Side Online Casino, LLC
- Turtle Mike Gambling Company
- Peach Online Gambling World Wide, Inc.
- Tammy Morgan Online Casino, LLC
- Graceville Online Gambling, Inc.
- Lucky Star Online Casino, Inc.
- Sphere IT Online Cason, Inc.
- Bull Eye Online Casino, Inc.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is imperative to create a budget for insurance policy covers and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your online gaming and casino company.
Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own online gaming and casino company in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
- E&O Insurance.
- Cyber Liability Insurance (Data Breach Insurance).
- Fidelity Bond Insurance.
- Employment Practices Liability Insurance.
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
IT professionals know that handing data over to a third-party is always risky. Protecting your intellectual properties can be stressful but in the modern world where ideas and patents are being stolen on daily basis you need to consider protecting your hard-earned intellectual property rights.
If you want to protect your intellectual properties; gaming software, company’s logo and other documents or software that are unique to you, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
If you want to make impact in the online gambling and casino industry, you should work towards acquiring all the needed certifications in your area of specialization. You are strongly encouraged to pursue professional certifications; it will go a long way to show your commitment towards the business.
These are some of the certifications you can work towards achieving if you want to run your own online casino company;
- eCOGRA Certified Online Gaming Sites
- GSA | Certification – Gaming Standards Association
- SSL Certificate
Please note that you can successfully run your own online casino business without any of the listed certification.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long arm of the law catches up with you.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own online gambling and casino company in the United States of America;
- Certificate of Incorporation
- Jurisdictional Licenses
- Business License and Certification
- Business Plan
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Consulting contract documents
- Apostille (for those who intend operating beyond the United States of America)
- VAT registration
- Federal tax identification number
13. Raise the Needed Startup Capital
Apart from the capital required to build a reliable online gambling software, starting an online gambling and casino company can be cost effective especially if you choose to run the business from your home, share office space with a friend or make use of virtual office.
Securing a standard office is part of what will consume a large chunk of your start-up capital, but if you choose to start the business on a small scale, you may not have the need to go source for fund to finance the business.
No doubt when it comes to financing a business, one of the first things and perhaps the major factor that you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labour yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for start-up capital for your online gambling and casino company;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Applying for loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
Online gambling and casino business and most internet based type of businesses does not necessarily require that you see physically with your clients hence it can be located anywhere since most of your business deals are conducted over the internet.
The fact that you can operate your online gambling and casino company from your home does not mean that location has little influence on the success of an online gambling company.
So, if you are looking for a location for your online gambling and casino company, ensure that it is a place that is located in a business district/ICT hub in your city, a place that is visible and easily accessible. Of course, you would not want to locate this type of business in the outskirts of town.
Your clients should be able to drive down and locate your office with little or no difficulty. Vendors also should be able to easily locate your office when they have to come submit their bid/proposals, documents or for background checks et al.
15. Hire Employees for your Technical and Manpower Needs
On the average, there are no special technology or equipment needed to run this type of business except for customized gambling and casino software apps, secured online payment portal and social media management software applications and other monitoring related software apps.
So also, you will definitely need computers/laptops, internet facility, internet server, telephone, fax machine and office furniture (chairs, tables, and shelves).
When it comes to choosing between renting and leasing an office space, the size of the online gambling and casino company you want to build, and your entire budget for the business should influence your choice.
If you have enough capital to run a standard online gambling and casino company, then you should consider the option of leasing a facility for your office; when you lease, you will be able to work with long term planning, structuring and expansion.
As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision. Averagely, you would need a Chief Executive Officer or President (you can occupy this role), an Admin and Human Resource Manager, Software Developers and Programmers, Business Development Executive/marketing Executive, Customer Service Officer or Front Desk Officer, and Accountant.
Over and above, you would need a minimum of 8 key staff to effectively run a medium scale but standard online gambling and casino company.
The Service Delivery Process of the Business
On the average, the way online gambling and casino companies work varies from one agency to another agency, but ideally, an online gambling and casino company is expected to first and foremost build a reliable and user-friendly website and then employ software app developers and programmers to build easy to play gambling apps and of course secured payment portal.
Basically, when online gamblers visit your online casino site, the first thing they would want to see are testimonies from previous patrons who are satisfied with the online games on your site and of course the ability to pay winners as fast as possible.
So also, securing their credit card info is very important to them. If they are able to get satisfaction, then they will pay to play the games on the site, bet with friends and do all that is permitted on your online gambling and casino website.
It is important to state that an online gambling and casino company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated business cum services process is not cast on stone.
16. Write a Marketing Plan Packed with ideas & Strategies
As an online gambling and casino company, you would have to prove your worth over and over again before you can get first time patrons to visit again and also to give referrals.
So, if you have plans to start your own online gambling and casino company, it will pay you to build first build a testimonial for your business. Here are some of the platforms you can utilize to market your online gambling and casino company;
- Introduce your business by sending introductory emails to all your friends and to everyone on your emailing list and on your social media platform in the United States
- Advertise your business in relevant ICT magazines, radio stations and TV stations (make yourself available for ICT related talk shows and interactive sessions on TV and Radios)
- List your business on local directories/yellow pages
- Attend international ICT expos, seminars, and business fairs et al
- Leverage on the internet to market your business (when you blog regularly on key issues as it relates to your business, people will consider you an expert in the field)
- Join local chambers of commerce and industries around you with the main aim of networking and marketing your online gambling and casino company; you are likely going to get referrals from such networks.
- Engage the services of digital marketing executives and business developers to carry out direct online marketing
17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them.
If your intention of starting an online gambling and casino company is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.
In promoting your brand and corporate identity, you should leverage on both print and electronic media and also the social media (the internet). As a matter of fact, it is cost effective to use the internet and social media platforms to promote your brands, besides it is pretty much effective and wide reaching.
Another strategy is to sponsor relevant community based programs, TV and radio programs, advertise your business in relevant magazines and newspapers. Below are the platforms you can leverage on to boost your brand and to promote and advertise your business;
- Place adverts on ICT magazines and related newspapers, radio stations and TV stations.
- Encourage the use of word of mouth publicity from your loyal customers.
- Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Badoo, Google+ and other platforms to promote your business.
- Ensure that you position your banners and billboards in strategic positions all around your city.
- Distribute your fliers and handbills in target areas in and around your neighbourhood.
- Contact your friends, people in your neighbourhood and everyone on your mailing list by calling them up and informing them of your online gambling and casino company.
- Advertise your business in your official website and employ strategies that will help you pull traffic to the site
- Brand all your official cars and ensure that all your staff members and management staff wears your branded shirt or cap at regular intervals.