Introduction to the Online Wagering Business MAIN
Software Licensing and a List of Companies that Provide Online Casino and Sportsbook Software SOFTWARE
Online Marketing Companies that get Web Traffic to a Casino Web Site MARKETING
Sublicensing an Online Gambling operation from a Licensee AFFILIATE PROGRAMS
Payment Processing and Merchant Accounts for Online Gambling operations to use E-COMMERCE
Software Considerations GAME TYPES
Legislation issues for the USA and abroad LEGAL ISSUES
Online Gaming and Other Gambling/Casino Related Conferences CONFERENCES
Economic Factors worth considering with an Online Wagering Operation ECONOMICS
Things to Watch for when Starting an Online Gaming Business PITFALLS
Forums - Hear what others have to say about the business MESSAGE BOARDS
Online Gambling Links: News, Stocks, Organizations, etc. LINKS
About Yorktown Ventures and the Author ABOUT US

eGaming Review


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START CASINO . COM
Independent Information Site on Starting an Online Casino Business
   
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This site is for executives of licensed land-based gaming operations as well as entrepreneurs considering a venture to start an online wagering business (otherwise known as an "eCasino"" or an "i-Gaming operation").

The site provides a basic introduction to the Online Gambling industry, including:

  • Online Gambling business overview
  • Conventions and Events
  • Online Gaming software companies
  • Marketing Strategies and companies
  • Legislation issues
  • Payment Proccessing and e-commerce
  • Economic / Country factors
  • Pitfalls

  • Introduction

    The Internet Gambling or Online Casino business is currently the fastest growing business in the world. Revenue for year 2006 was estimated at over USD $8-9 Billion. 2008 was estimated at USD $12 Billion, it is estimated by 2010 to be USD $15-18 Billion.

    There are currently well over 2400 online casinos in operation at the time of writing of this website.


  • The authoratative industry overview is the Internet Gambling Report (X) 2008, by Anthony Cabot
  • Another introductory book to the industry is the The Online Gambling Market Research Handbook 2003, by Terri C. Walker
  • The Trade Journal for the industry is Internet Gaming International, published monthly


  • What is an Online Casino?

    An Online Casino is a form of gambling over the internet. A gambler can place wagers from his home on various games using a computer and a modem connected to the internet. Online casinos vary in what they contain, but most if not all have basic Las Vegas style games (Blackjack, Poker, Slots, Bingo, Roulette), as well as sportsbooks, lotteries and other forms of gambling. A gambler uses his credit card for a cash advance, giving him virtual chips or "V-Chips." The gambler uses those chips as he would in any ordinary casino. On the screen is what you would see in almost any Virtual Casino Gaming Software that is sold in computer software stores - Only this time, the gambler is wagering for real money.

    All this takes place using software and a main server that monitors all the gambling activity. Thousands of people from all over the world can gamble at the same time at one internet wagering location.

    The Wizard of Odds site provides an excellent introduction as to how online games work.


    What if the Gambler Wins Big?

    Most online casino software have limits on individual bets as well as limits on daily bets. Furthermore, most internet casino and sportsbook software is programmed to pay back a certain percentage of the money taken in. Most use Vegas Odds, or odds used in the State of Nevada for various casino games. For example, if Blackjack Vegas odds are at 97%, for every USD $1000 wagered, USD $970 is generally paid back, leaving a profit (known as a "drop" or "take") of USD $30 (3%). So, the odds of one gambler winning big is low. In Poker, a "rake" of 4% is taken from each player before the game begins. Furthermore, what is commonly known as "the nature of gambling" indicates that most gamblers keep going until they are out of cash.


    How does someone START an Online Gambling operation?


    There are three ways to do this:

    1) Design and implement all SOFTWARE for an online casino and E-commerce. Keep in mind this costs millions of US Dollars. Also necessary is a gaming license to run a casino, which requires approvals from most governments. This too, does not come inexpensively. However, one has full control of the site, and full knowledge of the software source code. In addition, no royalties are paid out to a software development company.

    2) Become a Licensee of an Online Gambling Software Provider. This is a far less expensive option and the client receives all the software and sometimes even the equipment necessary. It is also the most popular option for both licensed land-based establishments as well as entrepreneurs. Costs range from USD $ 30,000 to USD $ 350,000 (some ask as high as USD $1 Million). The average licensing fees are around USD $150,000 (this usually includes marketing costs). In most cases a royalty is paid to the software provider as a percentage of the monthly "take" or "drop" (gross profit). Usually the software provider has payment processing (merchant account providers) already set up for a turnkey operation. The Licensing Section lists the software companies that can provide this for you.

    3) Become a Sublicensee of a Licensee. This is the least expensive option. Costs range from USD $ 0 to USD $ 60,000. Being an affiliate is basically the same thing as being a sublicensee with no up front costs. The sublicensee must do all the marketing and receives a smaller percentage than a full licensee (2), because royalties paid to the licensee are much higher. The Sublicensing Section lists Online Casino Software Licensees that are willing to provide this.



    When Would a Casino Become Profitable?

    That all depends. Marketing is the key to success. What is required is Internet Traffic. The Marketing section will list firms that specialize in acquiring internet traffic. Keep in mind one needs to spend money to make money. A reasonable expectation would be to spend about USD $ 400,000 - 500,000 (including the licensing fee above) and there should be a return on investment in approximately 9 months. Most internet casinos that are new spend about USD $30,000 - $50,000 each month in marketing. There are internet wagering operations spending well over USD $1 Million per month in their marketing budget. Some internet casinos are doing well over USD $1 million per month in PROFITS. Online casino and internet sportsbook companies not spending money on marketing are losing money. Do not think people just put down USD $250,000 and expect to make millions in return.


    Please complete the START CASINO for companies in this business to contact you.


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    START CASINO is proud to sponsor the National Center for Missing & Exploited Children
    Please take a moment to view the pictures below and report if you have seen them.


     
    US GOVERNMENT
    The proposed "INTERNET GAMBLING REGULATION, CONSUMER PROTECTION, AND ENFORCEMENT ACT of 2009," which LEGALIZES and regulates online gambling in the USA. Also known as the "Barney Frank Bill", read the ONLINE GAMING TEXT OF BILL H.R. 2267, which was submitted to the US House on May 6, 2009. It promposes to amend the Wire Act of 1961.

    Discuss the bill with others in the industry. Provided to START CASINO courtesy of the United States Congress.

     
    US GOVERNMENT
    The passed "UNLAWFUL INTERNET GAMBLING ENFORCEMENT ACT of 2006 / SAFE PORT ACT," which makes online gambling ILLEGAL in the USA. Read the final version of the ONLINE GAMING TEXT OF BILL H.R. 4954, which was passed in both the US House and Senate and signed by the President into law on October 13, 2006.
    Provided to START CASINO courtesy of the United States Congress.

     
    INDIANA STATE
    The passed and enacted "BILL," which makes online gambling ILLEGAL in the state of Indiana. Read the FULL TEXT OF BILL SEA 92, which went into effect on June 30, 2005.
    Provided to START CASINO courtesy of the Indiana State Legislature.

     
    WASHINGTON STATE
    The passed "BILL," allowing internet parimutuel horse wagering in the State of Washington. Read the FULL TEXT OF BILL 6481, which was passed on March 8, 2004. This follows the success of online parimutuel horse betting in the State of California.
    Provided to START CASINO courtesy of the Washington State Legislature.

     
    NEVADA
    A summary of the Interactive Gaming Regulatory Act in the State of Nevada. This is legislation to begin the process of evaluating the requirements for an internet casino gaming operation within the State of Nevada.
    Provided to START CASINO courtesy of the IGI Nevada.

     
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    Last Update: October 2010