October 31, 2023 0 459

How Much Does It Cost to Start an Online Casino Business: an Online Casino CEO Explains

In this article, Danil Fokin, CEO of Valor.Partners, talks about creating his own online casino, the advantages and disadvantages of development, as well as the purchase of a ready-made solution. When analyzing the launch of his own MVP, he delves into the technical, financial details, and aspects of building an effective development team.

All of Danil's knowledge was drawn from his own experience in the development and launch of ValorBet & ValorCasino.

Let's dive into the article and reveal how much does it cost to start an online casino (gambling) business. 

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The Overall Situation with Products in the Gambling Niche: a Lot of Scams and Mistrust from Investors

According to Danil, brands can enter the gambling industry either with ready-made online casino solutions on their engine or by creating their own product. Both options have their advantages and features, which we will consider below.

Currently, the reality of the niche is such that many short-term cases and scam brands appear, which attract investments but forget about expertise. These brands spend a lot of investor money on traffic acquisition without understanding what to do with it. As a result, webmasters and partners trusting such brands suffer. The problem lies in the fact that brands "do not see" the profile of players from different traffic sources, and investors do not understand how webmasters currently work, what tools they use to drain traffic, what metrics they rely on, and so on.

Danil's experience in the gambling affiliate network allows him to evaluate brands almost at a glance. And it is evident that the majority of brands on ready-made engines are not ready to compete, for example, with Facebook leaders. 7 out of 10 brands are not ready to receive traffic at all because they need quality expertise, additional market research, and the preparation of clear and adapted models for webmasters, with the training of their managers. A quick launch without expertise and preparatory work is fraught with the risk of draining the budget.

The Cost of Developing Valor.Bet & Valor.Casino

Describing his own experience of preparing an MVP for Valor.Bet & Valor.Casino, Danil Fokin provides detailed statistics on the costs of each department in the team. The breakdown is as follows:

  • Product + Project (2 people) — from $5,000/month;
  • Backend developers (8 people) — from $25,000/month;
  • Frontend developers (7 people) — from $15,000/month;
  • Designer (1 person) — from $3,000/month;
  • QA tester (1 person) — $1,000/month;
  • Retention department (11 people) — from $8,550/month;
  • Services/servers — from $7,000/month;
  • Office rent — from $10,000/month.

Taking into account the salary growth and staff turnover within the development framework, with subsequent replenishment, the expenses for 18 months amounted to $1 233 300. The first traffic was launched during the MVP development process because it is important to see conversion figures at every stage of gaming activity. The first MVP readiness took 9 months, so the first version of the product appeared within a year.

Custom Development or a Ready-Made Engine?

Touching upon the topic of creating an online casino, Danil suggests comparing the two options in terms of advantages and disadvantages.

Danil Fokin notes: Among the advantages of a ready-made solution, one can consider quick deployment and low risks of future usage. Developing a custom solution leads to higher costs for building a team and implementing your own infrastructure from scratch, which increases risks at every stage of work.

Advantages of Valor.Bet & Valor.Casino in Dealing with Traffic

Since Valor.Bet & Valor.Casino is a custom solution, its main advantage is the variability of settings. The development team is ready for customization at the request of webmasters without unnecessary bureaucracy and delays in coordinating details.

Valor.Bet & Valor.Casino is always ready to:

  • Innovate when dealing with traffic, setting up auto funnels in CRM, organizing mailings with the configuration of more than 30 parameters, and addressing users with details based on GEO and time of visit;
  • Set minimum deposits for traffic with filtering by streams, GEO, and payment methods;
  • Customize slot showcases for webmasters, taking into account individual advertising strategies and/or current trends for specific GEOs;
  • Handle traffic considering the psychotype of players from specific traffic sources. For example, considering that players from Facebook* are more impulsive in their decision-making compared to players from contextual ads;
  • Tailor promotions to webmasters' traffic not only from email newsletters but also when clicking on a banner, transitioning from online chat, or SMS, and so on;
  • Quickly set up landing pages on request with adaptation for a specific product.

Valor.Bet & Valor.Casino will also continue the history of advertising creativity and lead players to a happy and profitable gaming experience.

How to Organize All Processes Within the Team for the Development of a Custom MVP Solution

Danil Fokin also talked about how to organize work within the team when developing a custom gambling project. During the work on the MVP of Valor.Bet & Valor.Casino, the team composition changed. However, the established team system allowed them to quickly integrate into the project without losing work speed.

The team structure is designed in such a way that top management has access to every development process. For example, this helps the CRM manager understand what is happening at every stage of the current development.

The team eliminated bureaucracy in any form and created a transparent system where each employee has access to all product information. This allows them to:

  • Suggest their own ideas that could simplify/improve the entire development process.
  • Act promptly and be flexible in decision-making.
  • Develop comprehensively both within and outside the project.

Such process building within the team allowed Valor.Bet & Valor.Casino to move towards the final result fairly quickly and without delays.

What Is Better after All — a Ready-Made Solution or Your Own Online Casino?

Towards the end of the webinar, Danil Fokin once again briefly highlighted all the advantages and disadvantages of ready-made solutions compared to custom development.

Purchasing a ready-made online casino solution will cost between $30 000 and $50 000, to which 6-10% of GGR (Gross Gaming Revenue) payments can be immediately added. In return, the buyer receives a ready, tested engine with all the infrastructure. Among the cons — a high dependence on the supplier in terms of updates. Integrating third-party services and payment solutions will also take time, which could have been spent more effectively for the business.

When developing their own product, all responsibility for technical solutions and the product's performance lies on the owner's shoulders. Since all infrastructure is built from scratch, significant investment is required to reach the MVP stage. Then the project will need to be tested with traffic, which will also require investments to attract. Things will go wrong, and you'll have to fix not just one series of bugs. But in the long run, the product will not depend on ready-made solutions and will become more profitable.

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