We know that classic casinos earn a lot of money every night, week, month and year. We can see that around us since most of the casinos are exclusive places to go. What about online casinos/nettikasino ? There aren't crystal chandeliers, expensive cocktails and elegant waitresses and game holders. How much money do online casinos make? Let's see
How Much Does It Cost to Run An Online Casino?
The highest cost for an online casino is its software. There are three leading providers, and one thing they all have in common is that they are expensive, $11,000 or $12,000 a month to lease their software. What is more, they get 15% from casinos' winnings. That's a considerable expense, and we have just started.
Another money to spend goes to an affiliate program to drive business to their site. There is a gambling information site and advertise a particular casino for the commission on each player who plays in the casino.
These commissions take one of two forms: a CPA (cost per acquisition) or Revshare (revenue sharing).
A CPA is just the amount of money that casinos pay for each player who deposits at the casino. It can be something between $25 to $500, depending on how many players a site can transfer to an online casino. With that arrangement, casinos have a risk to pay more money than players provide, but casino owners know that a large number of players will permanently lose more money than the CPA. Across the Internet, it is said that one average online casino gambler is worth about $1000. It was calculated considering people who deposit and lose $25 and those who lose tens of thousands monthly.
Revshare arrangement means that the casino pays a percentage of the players' losses during their whole career in this casino. It is around 25%. More prominent affiliates demand higher revshares. From a player who deposits and loses $1000, the affiliate site's webmaster will get $250. Affiliates also take into account the amount of money their transferred players win. If that player with $1000 monthly gets on a streak, it can wipe out the earnings from the others the affiliate has referred.
More and more costs are into customer service, hosting, security. Adding all the payments up, we can assume that online casinos must earn about $35000 to break even.
How Much Does the Online Casino Make?
The size of the online casino market is about $40-$50 billion a year. Monthly it will be about $4 billion. If we want to make it simple, we can divide the market size by the number of casinos, and we will get an average revenue of the online casino. The solution will be about $1 million because 4000 online casinos are operating.
Does it mean that every online casino makes $1 million monthly? No, that is not as simple as we want it to be. The Pareto principle is there as well. Probably the top 20% of online casinos make most of the revenue.
However, from this hypothetical $1 million profit, we must withdraw all the money for commissions and costs, and the casino will be left with $500,000 of pure gain. Still a lot, but remember that is probably true for those huge ones.
How Does An Online Casino Make Its Profit?
House Edge
It is a formula used in casinos for earning a profit. It makes each player lose a small percentage of their money during playing games. It is often about 5%. It may seem like a low price, but considering the number of players every day, it is a significant amount of money.
Random games like slots and roulette are those with the highest profitability for the online casino. The outcome is unknown for both: the player and the casino, but thanks to the house edge, the casino will earn no matter what the result is
Commissions
In some games, for example, in poker, commissions are collected before the game even starts. Casinos take a percentage of these initial bets, or there is a flat rate, and players must pay a fee to play a game.
Casino establishment in games like that is not a site of the competition but only a holder of the game, so there was a need to make money while the casino wouldn't win anything from the game itself.
Free Cash
Real money online casinos usually offer free cash when you sign up. This is incredibly effective to lure new players because they can start for free. Of course, there is a catch. When you sign up, you need to open an account and deposit your real cash from your credit card. After your free coins from the casino operator end, you may quickly withdraw yours from your account and play more.
Free New Games
When there is a new game on an online casino gaming platform, it is often for free for some time. This makes players like the game and wants to play it more, but suddenly they must pay for it. If the game is good, they are more likely to do it and give more of their money to the casino account.
Conclusion
Costs of managing an online casino are high, and it takes a lot of effort to pay for everything and still make a good profit. Online casinos have various methods to lure new players and keep them into games to earn their money. Free cash, new games for free are lucrative opportunities. A new gambler will explore more, pay house edge on every play or commissions for games like poker, create a profit for the casino, and hopefully have fun doing so.
