The Business Plan for Opening an Online Casino
In this article, we will talk about everything that you need to know for opening an online casino. To be exact we will talk about The Business Plan for Opening an Online Casino. Now let’s try to calculate how much money an online casino will get. Let’s imagine that your main target will be the CIS market. The project’s repayment will cover the entire year and calculate how much money players have to lose during a month to meet these conditions. To simplify the model, we will make a fixed payment to an organization and assume they agree to add your site to their site with 50% commission. In fact, they will charge a higher percentage and demand money to be added. Encourage yourself to experience the reality of this business plan:
- The cost of the opening. Opening your own casino, including an offshore company, costs 33.000 Euros.
- Payment by the associate director for 12 months (minimum 1.500 Euros per month) – 15.000 Euros.
- Assume that players will deposit from different payment systems and never earn or withdraw money. According to calculation, he will gain an amount of 15% optimistically in this position because players will win and withdraw 50% (on average) of the deposits they make.
- Copyright will give us 6% (for the franchise) and 20% (for the creators of the slot) = 26%. For ease of calculation, let’s say you will not have a deposit bonus. Please note that the minimum cost of a franchise will be 3.000 Euros, no matter what percentage until you reach the amount of 50.000 Euros.
We have to compensate 48.000 Euros within 12 months. We will also pay 15% of net income (for payment systems) + 26% (for creators of slots). You also give half of these amounts to the partner, ie 30% of gross income. Let’s calculate: 41% for the costs and 30% for the partner. In this case, around 30% is up to you. This 30% (actually slightly less) will be your casino’s earnings. For zero exit, players must lose 12,000 Euros per month or 145.500 Euros in total. Add to this the blocking of websites and the creation of proxies and header. In total, the breaking point is somewhere between 15.000 and 20.000 losses within a month. Here it will be taken into account and the minimum payment for the franchise and (indirectly) incremental costs for the payment system.
Operating an Online Casino Costs
Some of these costs become visible only after signing the contract. Therefore, you should read the information carefully and include it in open online casinos in your business plan. You will continue to pay while on the job:
- White label copyrights: The franchisee receives a monthly payment which depends on your results but has a minimum lower limit. As a rule, you pay 6 to 9% of GGR, but not less than 3000 Euros. An important detail; You will have to pay a minimum number of royalties (3000 EUR), even with negative consequences (players earn more than losses).
- Copyrights for operators; The creators of the games are probably best placed in this “food chain”. They receive 10% to 20% of the players as GGR. Also, the payment takes place once a month. Everything is a little more honest here: Although many factors depend on the franchisee, the negative balance will be transferred to the next month and sent to an account.
- Payment system. This is probably the most important item in your financial business plan for opening an online casino. It is important that payment systems (Skrill, Neteller) take roughly 3-4% of the input money and 1-2% for payment. Payment by credit card will cost 2.8% of the money amount.
- Pay to employees; This support includes developing promotions, searching referrals, etc. It includes things like. You will have to pay 1500 Euros per month to the manager’s affiliate.
Risks That Will Require Adding Money
In this case, you take the following risks, which may require you to add their own funds to the project for the opening of the casino:If one of the players is lucky and wins a large amount of money, you must report the money to pay this money. It is important to know that Netent’s high variance slots can yield 100,000 Euros on a 25 Euro bet.
If you do not earn anything or the balance is negative, the franchisee will demand a minimum payment of 3,000 Euros per month.