While brick-and-mortar venues were shuttered, players enjoyed the thrill of betting without leaving their homes. If anything was clear, it was that the online casino segment had been put on the map with greater prominence than before, and it was not going away.
Many of the land-based casinos don’t ignore the tendency and, instead of competing with online gaming, start penetrating this highly lucrative market and looking for an opportunity to combine both directions in one successful business.
Indeed, having a named land-based casino provides valuable experience in gambling and some important adds-on, such as a ready player database, various marketing channels, sometimes a ready legal database, and last but not least, the reputation of an established market player. Compared to an online casino start-up with no prior experience in the business, a land-based competitor exploring the possibilities of the internet has a very good chance to take its market share.
However, it’s not as simple as it may sound. Experience in land-based business is not a guarantee of online success. The two markets still differ from each other in many aspects and there are quite a number of factors that the operator shall take into account in order to plan effective entry online.
These are just several things an operator of a land-based casino shall consider first:
1. Make Sure Your Legal Base is Ready
Before starting an online casino, an operator of a land-based casino shall ensure that the existing license for land-based gambling activities would also be valid for online business. Not all countries and gambling jurisdictions offer the same licences for offline and online gambling, so it’s better to get a qualified legal consultation to ensure you are fully prepared.
2. Prepare for New Casino Accounting Terms
The financial operation of an online casino differs from that of a land-based one. A land-based casino gets Net Profit.
Starting an Online Casino - Strategies for Land-Based Operators | SOFTSWISS is calculated as Total cash in minus Total cash out.This means that all money spent by players for chips at the beginning of the day minus total winnings that players take out of the casino cashier at the end of the day make the profit of the casino. As simple as that.
In an online casino, the scheme is more complicated. A player may have a certain amount on his account, but the amount doesn’t automatically belong to the casino. It may stay on the player's account for quite a while before it is actually spent on bets, lost, or won and withdrawn.
There are two main notions showing an online casino profit:
GGR (Gross Gaming Revenue) = Total Bets minus Total Wins.
NGR (Net Gaming Revenue) = Total Bets minus Total Wins minus Promotions minus Chargebacks minus Payment Processing Fees.
Payment processing fees are charged by payment providers and banks for processing electronic payment transactions between the casino and the player. The percentage differs depending on the type of transaction (cash in or withdrawal), means of payment (type of credit and debit cards, prepaid cards, e-wallets), the currency of the transaction, the transferred amount, etc.
Chargebacks are claims by players that they have not deposited funds in an online casino, so the money should be paid back.
Starting an Online Casino - Strategies for Land-Based Operators | SOFTSWISS Starting an Online Casino - Strategies for Land-Based Operators | SOFTSWISS