How much does it cost to start an online casino: costs and considerations

How much does it cost to start an online casino: costs and considerations

The online gambling industry grows year after year, becoming more lucrative. Just look at the numbers: in 2018, the total revenue of the online gambling market globally was $36,8 billion, reached $89,3 billion in 2023, and is projected to hit $136,3 billion by 2029. 

It takes a lot of effort to set up something like a sports betting company or an online casino business and plan out all your expenses. So, how much does it cost to start an online casino? And how much is a gambling license? Read on to find out!  

Overview of the costs involved in starting an online casino

When starting an online casino site, there are many things to account for to make it a successful business. There are many things you need to account for when planning to open a successful online casino. 

Likewise, many variables, such as licensing, software, marketing, and website costs, need to be considered when budgeting for this type of business. 

Licensing costs and legal considerations

Nowadays, iGaming businesses, including online casinos, go through overtaxing, restriction, and banning in some countries

Malta’s Licensing Costs and Fees 

Malta is renowned for its credibility and being part of the European Union. The Malta Gaming Authority offers several types of licenses, including B2C and B2B. The costs are as follows:

  • Application fee: €5,000;
  • License fee: €25,000 annually;
  • Compliance contribution: Varies based on revenue and license type but is capped at 4%.

For example, let’s take B2C type 1 and type 2 gaming licenses.

  1. Type 1: Minimum – €15,000; Maximum – €375,000. A compliance contribution for the financial year is 1,25% for every euro of the first €3,000,000. 
  2. Type 2: Gaming services minimum is €25,000; Maximum – €600,000. The compliance contribution for the financial year is 4% for every euro of the first €3,000,000. 

Check the full list of license fees and taxation in Malta.

Legal considerations. No matter if you own an online casino business or a brick-and-mortar casino – both are allowed. Share capital requirements depend on the game type, ranging from €40,000 to €100,000.

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Curaçao’s licensing costs and fees 

Curaçao has a reputation as a “haven for online gambling” because of low taxation, easy access to the banking system, light touch regulation on online casino sites, and opaque corporate structures. It is why online casino businesses consider this license to be among the best.  

  • Annual license fee: 120,000 ANG (Approximately €61,400);
  • Fee on granting license: ANG 36,000 (€18,421);

Find out more about fees and conditions in Curacao.

Legal considerations. License terms have some restrictions: residents of Curaçao are generally prohibited from gambling at casinos licensed by the Curaçao government.

Isle of Man’s licensing costs and fees

The Isle of Man has a very simple taxation system but complex legal considerations.

  • Application fee: £5,250 (€6,174);
  • License fee: A full license covering all gaming verticals costs £36,750 (€43,222) per year.
  • Additional fees: In addition, there’s a network license that carries the same privileges as the full license. However, you may use the network license to accept players from global operators (Network Partners) to your gameplay and back-office servers without registering them. It costs £52,500 (€61,745) per year. 

Legal considerations. If you want to establish an e-casino in the Isle of Man, you must hold a license under the OGRA (Online Gambling Regulation Act). But to get an OGRA license, a business must satisfy the following criteria:

  • Establish a Manx company;
  • Have at least two local directors, who must be individuals and not corporate entities;
  • Must appoint at least one resident Designated Official;
  • Must either register players on Isle of Man servers or they must operate under a network services license, which obliges them to establish the network services in the Isle of Man (except in the case of software supply-only licenses);
  • Must hold any player fund protection accounts in a bank in the Isle of Man unless otherwise agreed.

Kahnawake’s licensing costs and fees

Kahnawake, a Mohawk territory in Canada, offers diverse pricing and a straightforward application process. It has separate regulations for online and landed-based gambling.

Application fee – includes the first annual licensing fee:

  • Interactive Gaming License – $30,000 (€27,620);
  • Live Dealer Studio Authorization – $25,000 (€23,017);
  • Casino Software Provider – $35,000 (€32,223);
  • Client Provider Authorization – $35,000 (€32,223);
  • Key Person License – $5,000 (€4,603); 

License fee annually: 

  • Interactive Gaming License – $15,000 (€13,810);
  • Live Dealer Studio Authorization – $25,000 (€23,017);
  • Casino Software Provider – $20,000 (€18,413) + $3,000 (€2,762) for each third-party online gaming operator named on the operator list for any part of a calendar year;
  • Client Provider Authorization – $20,000 (€18,413);
  • Key Person License – $1,000 (€920).

Legal considerations. Kahnawake has established itself as a reputable jurisdiction with a focus on maintaining a secure and fair gambling environment. It has a very long and detailed list of requirements for those wishing to obtain a license. 

Choosing the right casino software provider

You will need the appropriate software for your clients to play online casino games. It’s one of the first things to consider when opening an online casino. Multiple game providers can accommodate your requests with two payment models for the online casino software – outright purchase of software and a revenue share model. Let’s compare the two:

  1. Initial fees. With the first model, you make a one-time payment for the software license. The revenue share model doesn’t entail the initial license fee. However, the provider will be taking 15% to 40% of the casino’s revenue on a set regular basis. It can be deducted from the company’s monthly profit, quarterly profit, etc.
  2. Setup. In both cases, the gaming package software will require setting up and promoting additional spending. 
  3. Customization. Installing game software services is not enough — they should look like they belong on your casino website, so you will need to pay for this as well.
  4. Maintenance. These fees include technical check-ups and customer support assistance on your purchased game software.
  5. Hosting. Lastly, you must cover fees for hosting the game software on secure servers, which can vary depending on the server requirements and security measures needed.

The main difference between the two models is the initial fees you pay. You might decide to get things sorted out right away and pay the full licensing fee. Or, if you are on a budget, settle on a revenue share model and pay a percentage based on your online casino profits. 

So, how much does it cost? The initial costs for casino games can vary greatly between software developers, but it is safe to say that you will be spending between €200,000 to €300,000 for software-related services. It’s because most gaming packages require a long software development process and effort. 

Website development and maintenance costs

An online casino site is a given. There are three major components to a professionally built casino website (excluding software and licensing):

  • Design. The casino website must be unique, eye-catching, and optimized for mobile devices. Additionally, the UI needs to be straightforward – very complicated sites can discourage clients;
  • Maintenance. Most casino sites will face huge customer traffic and other issues. Thus, the website maintenance efforts must be ongoing;
  • Search engine rankings optimization. A start-up casino site must utilize SEO-optimized web pages and articles to attract new clients early in development.  

All these efforts will cost you around €40,000 to €50,000, excluding the salaries of your developers team that will be handling the technical maintenance. 

Marketing and promotion expenses for online casinos

A successful marketing strategy can make your online casino business extremely popular with clients. 

The more money you allocate to your pre-launch marketing strategy, the better your chances of attracting players are. You must cover all types of casino promotion, from search engine optimization and advertising campaigns to social media marketing and influencer partnerships. Around €100,000 can be spent on the initial marketing strategy at this stage.

You will continue your marketing efforts for customer retention once your online casino is officially up and running. We recommend monitoring player tendencies and customer behavior to better adjust budgets.  

Choosing and integrating payment providers for an online casino business

Just like online stores, casinos receive a large number of transactions from customers daily. That’s why they must have a secure payment processor that simultaneously handles large payment volumes. 

The iGaming industry is considered high-risk, meaning an online casino will have to face higher fees from its specialized payment processor compared to regular businesses. 

Casinos require merchant accounts, and there are a lot of fees associated with those:

  • Account opening;
  • Service fees for account maintenance;
  • Fees for using different payment methods;
  • Charges per transaction.

If you require financial services for your iGaming business, look no further than Genome! We offer a complete spectrum of features, from multi-currency accounts and international transfers to corporate cards and mass payouts. This information will be especially useful if you’re a casino operator or an affiliate manager. 

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Potential hidden costs

A casino online business can forget about:

The license renewal process. You will need to be ready to spend funds on license renewals for your own online casino. The total cost can reach €45,000 – €50,000 per year. 

Compliance. Keep in mind the legal fees for continuous compliance with international gambling laws and handling potential disputes. You will need to have dedicated employees who will be monitoring compliance changes and helping you to prepare your online changes for ever-evolving regulations. 

Return on investment and break-even analysis

Your return on investment essentially depends on how successful the casino launch was. The sooner you attain your license and gain a lot of clients, the earlier you’ll see profits grow. 

This, of course, is a result of a successful pre-launch marketing strategy and consistent compliance with iGaming regulations. Generally, it is expected that a business will see a profit within a year.

Key takeaways

Many components combine the total cost of starting a casino online. It is why careful planning and budget management are crucial, as with those, it is easier to figure out how much you will need to save for your business and what the unexpected fees can be.

FAQs about online casino business costs

What are the ongoing fees associated with maintaining a gambling license?

The ongoing fees for maintaining such a license include annual renewal fees, annual compliance audits, and additional expenses for regulatory updates and legal services. 

How can I minimize the costs of starting an online casino?

To minimize the costs of starting an online casino, plan out all the expenses beforehand so that there will be no surprises in the form of additional funds spent. Negotiate favorable revenue share agreements with gaming software providers and consider the free deals they can offer you. 

How do transaction fees affect my online casino’s profitability?

Due to the fact that online casinos are considered to be a part of a high-risk industry, they usually face higher transaction fees than companies selling clothing or providing ad services. Such fees can significantly cut into profits, especially with high transaction volumes. However, the higher fees are necessary for better chargeback and fraud protection.