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How To Make An Online Gambling Website

Let’s start by calculating the costs of running an Internet casino each month. The biggest expense most online casinos have is software related. Almost all gambling sites lease their softwarefrom one of the big 3 casino software providers:

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  1. Playtech
  2. Microgaming
  3. Net Entertainment

I’ve seen estimates that claim these 3 companies power 60% of all online casinos.

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All of them have one thing in common:

They’re expensive.

All of these providers charge $11,000 or $12,000 a month to lease their software. They also get a 15% cut of the casinos’ winnings. That’s a pretty big expense right out of the gate.

But that’s not the only expense. Almost all online casinos run an affiliate program in order to drive business to their site.

Here’s how that works:

A webmaster runs a gambling information portal or site. He signs up for a casino affiliate program. He advertises the casino in exchange for a commission on each player.

This commission usually takes 1 of 2 forms:

  1. A CPA (cost per acquisition)
  2. Revshare (revenue sharing)

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A CPA is a flat amount that the casino pays the affiliate for each player who signs up and makes a deposit at the casino. This amount can range from $25 to $500, depending on how much volume asite is able to send a casino.

With a CPA arrangement, the casino risks paying more for the player than the player loses to the casino. But it’s okay, because over a large number of players, a casino has an idea of what theaverage player is going to lose. That amount is always more than the CPA.

I’ve heard from reliable sources that the average online casino gambler is worth at least $1000. That takes into account the low rollers who only deposit and lose $25, but it also takes intoaccount the high rollers who deposit and lose $10,000 a month for months at a time.

The other arrangement is called revshare, or revenue sharing. In this arrangement, the casino pays the affiliate a percentage of the players’ losses for the lifetime of the player. This amountvaries, but it hovers around 25%. Big affiliates can demand higher revshare percentages.

So if an affiliate refers a player who deposits and loses $10,000 a month, he gets $2500 in commission each month.

But affiliates on revshare also have to take into account the amount of money their referred players win. If that $10,000 a month high roller gets on a hot streak, he can wipe out the earningsfrom the other dozen or 100 players the affiliate has referred.

So far we have a flat fee of $12,000 a month going out the door. We’re also seeing 25% of the casino’s wins being paid out in commissions, and we have 15% royalties going to the softwareprovider.

Casinos also have to pay for customer service and hosting. Let’s assume you can operate a world class customer service department using offshore labor and spending only $5000 a month.

Let’s also assume that a casino is using its own secure server. I don’t have a lot of experience with Web hosting for sites with this kind of traffic or that sites that use so much bandwidth byhosting games, but I’m going to assume it’s expensive, but not too expensive. I’m going to call it $2500 a month. And if I’m way off on that estimate, let me know in the comments section.

So now we have almost $20,000 a month in fixed expenses, and we have 40% of player revenue accounted for on top of that. So just to break even, an online casino needs to earn enough money so that60% of its earnings equate to $20,000 a month.

So we’re looking at a minimum casino win of at least $33,000 a month just to break even.

Top Online Gambling Site

Gambling online falls into a legal grey area. While it is technically illegal in most of the United States, the prosecution and conviction of individual players is very difficult because they're gambling from home. It is also illegal for a gambling Web site to operate within the United States, which is why the offices and servers of most online casinos are located in other countries. There are about 70 countries that allow online gambling sites to set up shop, including Australia, New Zealand, South Korea, Denmark, Finland, France, Germany, and some provinces of Canada.

How To Create An Online Gambling Website

When you register for an online casino, you are required to agree to the site's terms and conditions. Finding out whether or not gambling is legal where you live is your responsibility. You must also abide by any age limits set on gambling in your locality. If online gambling is illegal in your area, and authorities discover that you've won money, your winnings could be forfeit.

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Issues of jurisdiction and sovereignty make gambling laws even murkier. The U.S. Wire Wager Act makes it illegal to use an electronic wire method (which courts generally agree includes the Internet) to transmit bets to places where gambling is not allowed. So a casino set up in the Netherlands is breaking U.S. law if a player in the U.S. plays their games. However, the U.S. doesn't really have the legal authority to prosecute someone in another country. Since players are almost never prosecuted either, we're left with an illegal act that generally goes unpunished. Of course, if an off-shore casino decides to cheat a player out of winnings, and online gambling is illegal in that player's locality, the player will have a difficult time suing the casino.

This brings us to the topic of regulation. Some of the countries that allow online casinos to operate have strict guidelines and regulations that make sure the casinos operate legitimately. They make sure the casino pays out when players win, and they ensure that published odds match the actual odds programmed into each game. Australian and Finnish online casinos are known for adhering to national standards. Some countries are not so strict about regulation and may be more interested in taxing the casinos than making sure that they play fair. There are many online casinos to choose from, and it pays to do some research into the regulations they must follow when you select one.

Online Gambling Sites In Us

In the next section, we'll find out how players make their money available for online gambling.