Over the past 5 years, the iGaming industry has shown dramatic growth: every year the market volume increases by 11.4%, and this is far from the limit.
2022 is a great time to organise a profitable gambling start-up.
The Casino Market company will bring your most daring business ideas to life. We will help you navigate the starting budget and achieve high profitability in the short term.
At our company, you can buy an online casino. This is our signature product with a wide range of equipment, modern design and prestigious licensing.
Calculation of Casino Profitability: the Popular Metrics
The work of gaming houses and other projects is evaluated based on specific financial parameters. They include:
Gross Gaming Revenue (GGR)
These are all bets of players, except for winnings and bonuses received from the casino.
As a rule, the operator issues additional points for:
- registration;
- making an initial deposit;
- completing the mission;
- the number of rounds played.
It is worth analysing the GGR parameter for at least 6 months. In a short reporting period, the GGR indicator may decrease significantly (due to large winnings) and not demonstrate the real state of affairs in the company.
A proven recipe for GGR growth is attracting solvent players. High-quality traffic with a focus on the wealthy audience will increase the average check and enhance the gross income.
Net Gaming Revenue (NGR)
The metric is calculated as the gross income minus all operating expenses of the entrepreneur.
The current costs of a turnkey casino include:
- securing a licence (fees, remuneration for annual renewal of a permit);
- remittance to B2B partners (payment providers, game software developers, affiliates);
- staff salaries;
- taxes and social contributions;
- marketing and advertising costs.
The NGR parameter gives an accurate summary of the results of the casino business. It applies not only to entrepreneurs but to the whole industry.
The UK wagering regulator, for example, estimates market growth by taking into account the NGR performance. The European Gambling Association is also studying the profitability of the iGaming industry based on the net profit of the best operators in 27 member countries of the organisation.
To increase the NGR parameter, it is necessary to reduce operating costs. It can be possible by transferring some of the functions to outsourcing or optimising business processes within the company.
Hybrid KPI
The crossbred performance indicators of the turnkey casino business are calculated considering the behaviour of the audience on the site and financial metrics.
Main hybrid KPIs in gambling:
- Cost per acquisition (CPA). The money that the operator spent on attracting one player. The parameter is calculated by dividing the monthly advertising budget by the number of new clients. The lower the CPA metric, the greater the benefit of traffic arbitrage in the enterprise.
- Average revenue per user (ARPU). Net income is divided by the number of active customers on the site. ARPU and CPA parameters are often compared with each other. The ratio of metrics to focus on at the start is 3 to 1. This means that the income from each player, on average, is three times higher than the cost of attraction.
- Customer lifetime value (CLV). The amount of profit that a gamer brought to the casino throughout his gaming activity. The task of the entrepreneur is to maximise the indicator, mainly due to the growth of the average check of users.
Successful Marketing Strategy of an iGaming Project
Creating a turnkey online casino is the first step to developing a profitable business. There must be a good strategy for distributing content to get a decent income in the future.
The operators can use several promotion methods at once (SEO, SMM), doing both independent work and cooperating with affiliates. This approach will make online casino marketing more flexible: it is always possible to adjust the advertising budget in one direction or another.
Available ways of promoting an iGaming project:
| SEO optimisation | A set of measures to raise the position of a wagering site in search engines. It is most effective to bring the gambling resource to the top of queries in Google, Yandex, and Yahoo!. To achieve the desired result, SEO specialists:
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| Email distribution | When during the registration the gamer gives access for the use of his data, the administrators can set up an email newsletter. Features of such messages:
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| SMM marketing | Creating the best turnkey online business is hard to imagine without promotion in the SMM environment. These are popular social networks: Facebook, Instagram, YouTube, VKontakte, Telegram, and Twitter. Usually, SMM specialists:
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| Affiliate cooperation | The operator partially delegates marketing tasks to partners, increasing the profitability of the casino business. Advantages of working with affiliates:
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Loyalty System in a Modern Web Casino
Experienced businessmen know that it is necessary not only to attract an audience to the site but also to retain especially valuable clients.
Effective interaction with registered users will help:
- increase the average check of a player, which directly affects the growth of casino profitability;
- reduce the outflow of customers who for some reason stopped betting;
- increase the CLV parameter and create a pool of VIP clients of special value for business;
- reduce the percentage of bonus hunters — users who register in order to receive starting points.
The development of an online casino with a loyalty program is focused on the following bonuses:
- additional money for the first deposit and free spins;
- cashback (return of part of the costs lost in the casino);
- promotional codes for launching slot machines with a certain account balance;
- multiplayer tournaments;
- network campaigns (seasonal, pre-holiday);
- jackpots with a fixed and accumulative prize fund;
- random gifts and sweepstakes;
- access to premium online casino software solutions.
In loyalty programs, there is often such a thing as wagers. This is the number of online bets that a gambler must make before withdrawing bonus money.
The size of the wagers varies from x5 to x40. For starting bonuses, this figure is traditionally higher, while current bonuses need to be played 5–7 times.
Nuances of Gambling Business Licensing
If the gross revenue of an iGaming project is taken as 100%, then the net profit will be 30–40% after all operating deductions. This is a good and important indicator to focus on at the start.
The lion's share of expenses depends on the country of registration of the business. A balanced choice of jurisdiction will increase the operator's net income by up to 50%, given the basic traffic indicators of the gambling resource.
The country where an iGaming project is licensed affects:
- the company formation costs (fee for the registration of a legal entity, expenses for opening a bank account and renting a hosting);
- the cost of servicing the permit (annual renewal or a fixed fee once for 5 years);
- fiscal burden on the business (taxes, acquisition, and additional payments).
It is most profitable to buy an online turnkey casino solution with a licence of such offshore zones:
- Malta. The local regulator issues different types of permits, including B2B and sublicences. The state adheres to European legislation but offers preferential taxation — up to 5% of annual profits.
- Curacao. The island part of the Netherlands, although a member of the EU, offers lower taxes compared to mainland Europe. The fiscal burden does not exceed 2% of turnover. The operators can get a comprehensive permit for all types of online gambling: slots, cards, lotteries, bingo, and poker.
- Gibraltar. The jurisdiction is famous for its low tax rates — businessmen pay only 0.15% of gross income per year. The country has developed favourable conditions for registering companies: many operations can be performed online without a personal presence in Gibraltar.
How to Reduce Business Operating Costs
The optimisation of expenses directly affects the company's net income. The right approach to the organisation of business processes reduces operating costs and improves casino profits.
The main ways to reduce expenses:
- Transfer of functions to outsourcing. Generally, the operators delegate the tasks of marketing, financial and legal services of the business. This helps reduce the staff, as well as receive quality services from the outsourcer.
- Purchase of turnkey casino software. Entrepreneurs who want to launch an online site should order a complete ready-made product. The solution will free up part of the funds at the start of the project. And the money can be redirected to the strategic development of the company.
- Collaboration only with reliable partners. Buying software (gaming or payment) from trusted manufacturers will protect against unexpected expenses in the future. An operator instals software components only once, without overpaying for low-quality products.
The Main Things about Creating a Prosperous iGaming Project
The Casino Market company offers customers a turnkey casino website for sale — without overpayments and with full support at all stages of starting a business.
Benefits of cooperation with the Casino Market aggregator studio:
- a wide variety of equipment (the gaming platform comes in a package with entertainment content, payment and CRM systems);
- licensed software from trusted suppliers;
- thoughtful backend with a lot of useful administrator settings;
- stylish front-end with a convenient gaming lobby and UX elements.
You can estimate the functionality of a turnkey online casino in a free demo mode.
- The main performance indicators of an iGaming project include gross income and net profit. For a deep assessment of the quality of internet traffic, hybrid KPIs are used: cost per acquisition (CPA), average revenue per user (ARPU) and customer lifetime value (CLV).
- To attract a solvent audience, SEO and SMM marketing tools, email newsletters, and partner services are used. To achieve the desired conversion, it is better to combine several advertising methods at once.
- Delegating functions to outsourcing, as well as a competent approach to licensing will help optimise current costs. Buying software from trusted providers will reduce expenses in the future.
Contact the Casino Market specialist and get an individual offer for starting a casino project!
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