[Drew]

Hey guys,
I'm a newbie here, and I wanted to get a general opinion about this industry. What do you guys think about the future of online casinos? I've done some extensive research that shows that even the small guys make decent money, and the industry is projected to double in size ($10b to $20b) over the next six years. Any comments?

[Steve]

Seems like about 5% of the casinos online make any money. The rest just redirect to an affiliate???

Would you start your own or just pass people on to the big boys?

[marbalizer99]

I've read that getting a license to have an online casino can be quite expensive.

[Drew]

Originally Posted by Steve

Seems like about 5% of the casinos online make any money. The rest just redirect to an affiliate???

Would you start your own or just pass people on to the big boys?

You can definitely make money as an affiliate, but I want to start my own. To answer the other question, it costs about $25k average for a gaming license unless you go to Costa Rica where it's free. There are software companies that offer full software licenses with gaming license included for around $100k. My calculations using industry averages shows that an investment of $300k ($150k to software and site setup and $150k to marketing) will break even in about 6 months. Every dollar spent on marketing achieves roughly a 1.7x ROI in a 4-6 month period. Again, these numbers are based on industry averages and could be better or worse depending on your marketing abilities, software package, and many other factors.

[Steve]

Specializing in a full casino? Blackjack? Poker?

The market seems pretty saturated to me.

[cheng]

another consider is the credit card processing company and fraud. Most CC company dont allow you to deal with gambling or porn reason being its very high risk.

Also gambling generally have to do with lotsa money and frausters love to strike. Make sure you are aware and can cope with the satuation effectively.

[Drew]

Originally Posted by Steve

Specializing in a full casino? Blackjack? Poker?

The market seems pretty saturated to me.

I wouldn't say the market is saturated. Well...I wouldn't totally agree at least. There are definitely a lot of players, but when you consider the percentage of people online right now (27.4% of English speakers and only 9.3% of Chinese) there is still a ton of room for expansion. The Chinese market is almost completely untapped. Morale of the story...there is definitely room to compete. To answer your first question, I want to start with a casino and poker and then add bingo and sportsbook. The latter two are highly overlooked methods of income.

[waveformpc]

Originally Posted by cheng

another consider is the credit card processing company and fraud. Most CC company dont allow you to deal with gambling or porn reason being its very high risk.

Also gambling generally have to do with lotsa money and frausters love to strike. Make sure you are aware and can cope with the satuation effectively.

I would have to agree with that... What happens if someone bets some big money, only to lose (and get pissed), then file a chargeback?

[Drew]

Originally Posted by waveformpc

I would have to agree with that... What happens if someone bets some big money, only to lose (and get pissed), then file a chargeback?

It's a very real concern, and I know it does happen. In this case, though, the casino is only out the cost of a financial transaction. The biggest concern is what if someone gets really lucky and wins a jackpot in one spin. The odds are low, but it could happen. The good thing about going with a turnkey solution from a software company is that you aren't responsible for the losses. You are responsible for the marketing only and in turn get paid 50-60% of the revenue.

[insomnia]

Being your own casino will probably cost more, you'll need to maintain your marketing costs, hire full time staff to manage the site (it will go down, be hacked, naturally fail), register licenses and bank accounts in offshore countries, etc.