So, you want to enter the online gaming industry? Great!
It is still a very young, growing industry and the opportunities for new sites to come into the market and get a slice of the action are still very much there. However if you have a USP (Unique Selling Point), it will be easier to interest players.
So, how do you go about it?
Well, that depends on how much start-up capital and experience you have. Running an online gaming website may sound straight forward, but there is a lot you need to consider. If you want to keep everything ‘in-house,’ you will need a gaming platform — gaming products like poker, sportsbook, and casino games. A gaming site needs to take player deposits, so, you will need a payment processor. You will need to take care of; marketing, advertising, social media, promotions, and website content. Then you will need licensing for your target market. Affiliates will be needed to drive players to your website, and they will require access to affiliate software. You will need methods to spot and stop fraud and collusion, in game-play and payments. Once you get players to register and deposit, you will need to look after them, make sure they keep coming back. Customer Relation Software is required.
Some online gaming sites have several hundred employees! The Stars Group (PokerStars) has over 1,600 staff members. Unless you have hit the lottery jackpot, are a self-made millionaire or have a lot of financial backing behind you, going it alone is not an option.
So, What are the Options?
• White Label
The quickest and easiest way to get going is as a White Label operator. A White Label (WL) agreement is where a B2B company (Business to Business) allows you to use their existing products, software, and licenses and will manage certain aspects of the operation. This is a service, and you will pay for it by sharing the revenue that your gaming brand will generate.
The WL provider will furnish you with an online gaming platform with a choice of gaming products; casino, slots, sportsbook, and poker. There is also; live dealer casino, DFS (daily fantasy sports) and lottery & scratch cards.
A back office will give access to financial and game data. A Content Management System allows certain branding changes. You will require affiliate software and customer relations management software integrated; this can be provided as part of the WL or be third-party provided. You will get a back office control panel.
Affordable start-up costs.
You can start with a few products and add later.
Your brand will be licensed under the WL providers master license.
Reduced staff costs as the WL provider takes care of a lot of the day to day management, and this allows you to concentrate on marketing your brand.
The website is likely to be very similar to other sites just with different branding/color scheme. However, there are some branding and marketing techniques that can overcome this, see here.
You pay a % of GGR (Gross Gaming Revenue) to the software providers.
You may not be able to have as much control over the site as you wish, for example, there will be guidelines as to what promotions you can run, tournaments you can offer, and player data is sometimes retained by the software developer.
In short, if you have a limited budget and are looking for the quickest and cheapest way to get live, a White Label is your best bet.
What is the Cost of a White Label?
This will depend on many factors; provider, licensing, products, etc. However, it is possible for a WL with casino, slots, and poker on a network with the full management system, ready to go for €20,000 upwards.
A Turnkey solution gives you more control over the site than a White Label, but it does come at an extra cost. The same software providers will be able to offer this solution, but you will have access to the code and can, therefore, make changes to the website and software to help mark your site out against the competition. With the number of sites regularly increasing over the last few years, differentiation is more important than ever and having a (USP) Unique Selling Point, is crucial.
Your website can be fully branded as you want.
A higher revenue share means more money is coming in over the long term.
You have more freedom with regards to promotions, games.
Higher costs to start than with a White Label.
You will require a large staff and management team.
You will need an online gaming license.
You have more legal, financial and fiduciary responsibility.
In short, a Turnkey Solution is best if you have a good amount of money to invest from a start-up and are looking long term.
What is the Cost of a Turnkey Solution?
There are many factors here, but you will not have change from €150,000 start-up. Your operating costs will be high, particularly staffing.
API (Application Programming Interface)
If you already have your website and gaming platform, many third-party products can be added very easily. The easiest way to do this is by an API call. For example; you are an online casino operator and want to add poker, once you have agreed the solution costs with a poker software provider, your tech staff and theirs integrate the product.
Allows you to pick and choose what product/s you offer and from which providers.
Quicker to integrate and set up than a new White Label or Turnkey solution.
A higher revenue share is normally available via this method.
Can be complex and is usually only an option for an experienced online gaming operator.
You may need to hire a tech team to integrate unless you have in-house tech support.
What is the Cost of API?
It can be low or high depending on the product. For example; if you wanted access to a certain gaming studios’ brands, you would need to pay them a €40,000 licensing fee first. A poker software API integration could provide cots €10,000. A full online gaming platform builds independently with all products sourced third-party, platform set-up and licensing would be €250,000 upwards.
We guess that if you are reading this far, then, most probably you are relatively new to the industry or are looking for information regarding the start-up of an online gaming site. It is usual to employ an experienced Gaming Management Company. If you are interested in more information, please see here. This article shows how you can launch your online poker and casino brand with a great USP at low-cost.