Capital investments are necessary for all kinds of business, including those that are related to iGaming. The Casino Market company will tell you about promising sources of funding for casinos that work in the realities of the domestic market. We hope that every businessman will find here some useful information and will be able to apply it practically.
Preparatory Stage
Capital formation remains one of the most difficult tasks for a beginning entrepreneur. The same can be said about the iGaming field as well. The problem is that investors prefer well-known and strong brands, while new companies go under the radar.
To stand out, you must be truly the best and properly prepare a package of documents, which includes:
- A detailed business plan.
- A well-thought-out presentation of the gambling project. The value, originality of the solution, the attraction of unusual games or the use of an improved security system ― all this is important for a potential investor.
- An attractive pitch. A short but in-depth letter is similar to the motivational speech in a lot of ways.
- Constitutive documents (the registration of a company, the opening of a commercial account, and balance sheet recognition with the tax authorities).
If everything is fine with the documents, then it is time to move on to the search for capital.
Casino Мarket found 10 reliable ways to invite investments in a gambling project. We divided all available approaches into 4 large groups, depending on the specifics and conditions of financing.
Traditional Financing Methods
Among the classic sources of funding, we can name commercial and multinational banks, financial and industrial groups that offer bonds and loans. The easiest way to attract money to a casino is to contact one of these institutions.
In order for the application to be accepted, it is important to provide a business plan, as well as a service or product that was approved by the gambling market. If the company operates legally and has an appropriate license and a minimal authorised capital, then the attraction of investments in a casino will not be a difficult task.
The following types of financing are available in the gambling industry:
- Loans ― short-term investments issued by commercial banks. Money can be received after you prove that there are fixed assets that you can use if you will not be able to return the loan on time (servers, modems, and other equipment) or intangible assets (casino software, the brand name), securities, and other assets. A loan is not going to become a safety net but it will certainly help you to quickly generate the operating capital.
- Long-term loans ― this is probably the most popular way to raise funds. Money is provided for a period of more than 1 year. Foreign banks offer attractive lending rates: LIBOR (percentage of the country's national bank) + 2-3% (margin of a commercial institution). To get such a loan, it is important to have a license from one of the world’s leading jurisdictions and a detailed business plan. Domestic banks are more democratic in this matter but the interest rate will be higher.
- Platforms with online loans. These are alternative organisations that work on the Internet like classic banks. These platforms are mostly financed by startups and young companies that deal with iGaming. Among the well-known services, there are POSper, TrustLeaf, Lending Club, and others.
Investment in a Casino: What to Pay Attention to
Long-term investments in gambling projects are associated with a change in the structure of the stock capital. At the time of the sale of shares to the investor the businessman also gives him part of its property. It is possible to side-step an issue of online casino management by indicating such an item in the contract. But you will still have to share your earnings (at least pay dividends once a year).
A positive aspect is that the investment company is involved not only in the distribution of profit but it also assumes part of the business risks.
Investment in a casino can be of two types:
- Strategic investments. Capital investment through the purchase of company stock involves active participation in management. An investor can be either a private individual or a large corporation or holding. The volume of financing can be from several thousand to millions. It all depends on the potential that will be seen in an online casino.
- Venture investment in a casino. Such activities are carried out both by individual venture capitalists and investment funds. There is only one goal here ― to find an interesting gambling project and invest in it for 5-10 years. Often such projects are associated with higher risks but the chance of earning good money if one is fortunate is also quite high.
A strategic investor, as a rule, specialises in one sphere of action. If the company has already invested in a gambling resource, then it is likely that you will reach success.
Venture capitalists, on the contrary, prefer to diversify their contributions. That is why, in their portfolio, there are many brands that are not at all connected with each other. This may be investments in gambling projects and, for example, in the food industry.
Crowdfunding
There are several crowdfunding platforms in Russia that allow you to attract investments to your casino. These are Planeta.ru, Boomstarter.ru, Smipon.ru, and others. It is also worth visiting the major international platforms ― Kickstarter, Indiegogo, Peerbackers ― which have managed to help hundreds of young and ambitious companies.
Each website has its own specifics and online audience. These can be resources with philanthropists (for example, RocketHub) or services with accredited investors (OurCrowd).
In the West, crowdfunding sites are enormously popular since they really help to find potential investors. In the CIS, this direction is at the stage of development: only a few companies have managed to invite good investments.
To receive money, it is important to prepare the right project and an attractive pitch. You may have to hold dozens of business talks until you find an investor who will be interested in your project. If successful, the platform will take a certain percentage (no more than 10%) of the amount of transaction.
ICO Crowdfunding
This is a new direction that is suitable only for cryptocurrency casinos. If you are such a company, then go ahead!
Crowdfunding sites are mostly those services that specialise on tokenization. These are Ethereum, Waves, NXT, Omni, and others. It is rather easy to win investment in your casino. But it is important to remember that there are high risks associated with the possible depreciation of cryptocurrencies.
Alternative Financing Methods
The investment market is growing rapidly, offering new ways to search for financial resources. We offer original and offbeat methods that have already helped many marketeers in the gambling sector:
Working with “Business Angels”
These are people (entrepreneurs, top managers, and organisers) who invest in ideas that they liked. For them, investments are often a minor source of income when the main revenue comes from a business that is not related to gambling.
Such people are happy to be included in the business community and are pleased to share useful contacts. There are special resources for finding “angels”. For example, these are Funded.com, Angel Capital Association, Angel Investment Network, and other useful platforms.
Partnership with Accelerators
These are coaches, mentors, and investors rolled into one. They not only invest in the idea but also actively help with its development by providing a piece of advice, advertising, premises or servers for work. Such people are sincerely interested in the profitability of the project.
You can find the accelerator on such platforms as 500 Startups, Techstars, Y Combinator, and others. The customer receives a small initial capital, legal and marketing advice, and access to other investors in his network.
Partnership
This is a simple but effective way to get the necessary financing. To make the scheme work, it is important to spell out all the cooperation conditions in the contract.
Together, business partners form a start-up capital, put in a request for a license, and launch a project. All profit and losses are also shared equally (or in the proportion specified in the contract). In fact, you get another owner of your company with whom you are ready to go through all the stages of the development of the casino.
Conclusion
Casino Market has been operating in the gambling market for many years and is able to offer optimal ways of investing for every entrepreneur.
We provide consulting services, assist in the acquisition of a license and signing contracts with software vendors, and offer promotional marketing.
From us, you can also buy a turnkey online casino. This is a fully equipped product that can be launched immediately since it already has a payment module, the reliable software, and a wide range of games. Contact us right now and make your path to success!
Start your path to success with Casino Market right now! Our contacts:
- e-mail: manager@casino-market.com
- Skype: support.casinosupermarket
- the feedback form.
Have questions or want to order services?
Contact our consultants:
- e-mail: manager@casino-market.com
- Skype: support.casinosupermarket
- feedback form.
Check the information used to contact us carefully. It is necessary for your safety.
Fraudsters can use contacts that look like ours to scam customers. Therefore, we ask you to enter only the addresses that are indicated on our official website.
Be careful! Our team is not responsible for the activities of persons using similar contact details.
