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. 2017 was estimated at USD $46 Billion, it is estimated by 2020 to be between USD $84-94 Billion.

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

• The are several authoratative industry overview is the H2 Gaming Capital
• The Trade Journal for the industry is iGaming Business.

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 online casino and sportsbook location.

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

What if the Gambler Wins Big?

Most online sportsbook and casino software have limits on individual bets as well as limits on daily bets. Furthermore, most online betting 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 Wagering 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 online casinos that are new spend about USD $30,000 - $50,000 each month in marketing. There are online casino and sportsbook operations spending well over USD $1 Million per month in their marketing budget. Some online casinos are doing well over USD $1 million per month in PROFITS. Online casino and online 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.