Opening up your own business can be an exciting time, in which it’s easy to get wrapped up in the ideals of running your dream business. However, there are many hidden things that people forget to think about when it comes to starting up a business, particularly in relation to start-up costs.
While you may have budgeted for initial overheads, there can be hidden costs that you may not have budgeted for that could quickly land you in deep water. But there’s no need to panic. Below, we’ll go through some of the initial costs of starting up your own casino business.
Choosing which online casino software to go with will be one of the most crucial decisions you make for your business. It’s essential that you choose a reputable provider that offers high-quality software and a wide variety of games.
To make this decision, you’ll need to conduct thorough market research, and if you’re outsourcing this then it could cost as much as $5,000. Your market research should cover your ideal target audience and thorough competitor analysis. This guide should help you plan your competitor analysis, and in the meantime, you can check out some new online casinos that are top of the industry.
As for purchasing the software, this can often be done as a tailored solution where you can choose options for progressive jackpots and live dealer options. The cost for a tailored solution starts from anywhere around $20,000. Bear in mind that visual design and a mobile version of your site will add to the cost too.
Getting a Licence
There are a number of licences you may need, depending on which country you will be operating your online casino from. The most common types of licences needed include:
- An Operating Licence
The type of operating licence you will need will be dependent on your location. If you’re offering remote gambling services to consumers in Great Britain, then you will need a licence from the UK Gambling Commission. Other common licensing authorities include the Lotteries and Gaming Authorities of Malta, the Gibraltar Licensing and Regulatory Authority and the Kahnawake Gaming Commission.
- A Personal Management Licence
A personal management licence is needed if you are in control of certain activities for your online casino. Such activities include overall strategy and delivery of gambling operations, financial planning, control and budgeting, marketing and commercial development, regulatory compliance and gambling-related IT provision and security.
This costs £370 per licence, however, you will only need one licence to cover all of the above activities.
- A Personal Functional Licence
A personal function licence is needed if you’re involved in handling cash at your online casino. Staff that need A PFL include:
- A dealer or croupier
- A cashier
- An inspector
- A pit boss or a gaming supervisor
- Security staff or monitoring surveillance related to gambling activities.
The cost of this licence is £185 and is the responsibility of the individual rather than the employer.
- A Premises Licence
Luckily for online casino operators, a premises licence is only needed if you own a physical gambling venue such as a betting shop, bingo hall or an arcade. This type of licence can be granted from your local authority.
The online casino market is a fairly saturated space, in which it’s vital that you have a solid marketing strategy to be able to keep up with the competition and ensure you can attract and retain customers.
It is generally recommended for a small business that you invest 10% of your revenue back into marketing activities. Such activities could include creating email campaigns, online display ads, SEO for your website and creative videos and giveaways.
When planning your marketing budget, it’s important to factor in whether you will employ a Marketing Manager to create and implement your marketing strategy, or whether you’ll manage this by yourself to begin with. Other costs to factor in include marketing tools such as your outbound email provider, design tools like the Adobe Suite and your budget for paid ads on Google or other major search engines.
Employing Professional Consultants
Running a small business can be incredibly time consuming and while you may plan on doing everything yourself to begin with, you could soon find that this simply isn’t feasible. It’s important to plan for this and consider what the cost would be of hiring professional consultants such as an accountant, a legal adviser and a trademarking expert or IP lawyer.
These costs can mount up as many professional consultants charge by the hour.
Overall, it’s important to put the right amount of time into your business plan and ensure you have sufficient funds in place so that your business doesn’t fail before you’ve even begun. By keeping the above in mind, you stand the best chance of creating a great online casino business.