The Cost Of Running Online Casinos
Online casinos can be extremely profitable. However, they can also be very expensive to run. One of the biggest expenses of running any online casino is the gaming software. Generally, the top three software companies in the industry provide the gaming software online casinos need to succeed. They cost of leasing enough gaming software to run a casino online is roughly £10,000 each month. In addition, on a monthly basis, online casinos must hand over 15% of their revenue from games to the software companies that provided them.
Large companies such as Microgaming cost the average online casinos £200,000. However, this is on the low end of the package deals offered by the company. This number can be much higher, depending on what a casino operator wants.
Another aspect of running an online casino that makes it rather expensive is an affiliate program. While not all online casinos have one, many of them do. These programs cost casinos a significant amount of money because they must pay each of their affiliates. The bigger the casino is the higher the affiliate pay is. Generally, the ones on the lower end of the spectrum pay roughly £25 to each one while the higher end of the spectrum can pay as much as £500.
Revenue sharing is also something that costs casinos with affiliate programs a significant amount of money. In this case, affiliates get a cut of the money players loses to the casino. The lowest revenue share is usually 25% but it can get much higher than that. However, the more money that players referred by an affiliate win, the more expensive it becomes to run an online casino.
Yet another expense online casinos face is web hosting and customer service. Casinos often have their own secure server, which costs a significant amount of money to maintain. Fixed expenses such as these make up the majority of any online casino’s budget. These days, the typical online casino costs £30,000 a month. Only the most successful of them are able to make huge profits as a result. The online casinos ranked in the top 20% are most likely earning at least 80% of the industry’s overall profits and revenues.
Depending on the particular software company, some will provide their own customer service for their games. However, online casinos must pay a significant amount of money for this. Microgaming, as one of the biggest software companies in the industry, requires any online casino that uses its games to have a cash reserve of at least £300,000. This allows casinos to pay out right away when players win a game provided by this company.
Lastly, any online casino must market itself in order to be successful. On average, this costs at least £20,000. Newly launched online casinos must spend an average of £50,000 per month to work with affiliates on their marketing efforts.
In conclusion, there is no cheap way to run an online casino. It is an expensive undertaking that noy many people are willing to tackle.