How to Start an Online Gambling Business: 6-Step Guide
It’s no wonder that you may be a bit puzzled about how to start a gambling business. As with any other type of business, it will require investment and a big commitment from you and your team. Young inexperienced business founders may face difficulties at the stage of market studies, ensuring legal compliance, or integrating effective features into the solution.
No worries — Limeup experts prepared the guide for you on how to create an effective business in this industry from scratch. We will take you through the key steps on your way to building an online gambling solution, from planning and exploring the niche to launching and promoting your website.
This material can serve as a roadmap for you to start your own online gambling business and distribute time, resources, and budget effectively. Keep reading to discover what tasks are waiting for you if you plan to enter this competitive yet promising market.
What is a gambling business?
Gambling businesses are those providing game-of-chance activities or betting activities to users. Such businesses operate both offline and online. Examples of betting enterprises are online casinos or sports betting companies, offline poker dealers, horse racing companies, etc. In some countries, they can be owned and managed by the government. But in most cases, such businesses are run by private companies.
The online gambling industry is a very promising area that has grown significantly during and after the pandemic. Under the conditions of social distancing, people started to look for ways to entertain themselves. From that time to 2022, the total commercial revenue of the gambling companies in the US reached $60.42 billion.
Commercial gross gaming revenue.
People engage with gambling websites for various reasons. For some of them, online games and betting are a way to relax their mind and try their luck. For others, gambling activities are a vital source of income. Their rights are protected by the regulations and laws released by each country. For starting businesses, it’s important to be aware of the legal side of the question before launching the site.
A gambling site is an online platform where users can place their bets and play games of chance. Modern gambling websites aim to cover most of the user’s needs, which include playing a game, managing finances, communicating with other players or site administration, tracking their activity, accessing analytics, and more.
To get the most from online gambling business opportunities, companies build both web and mobile applications for their business. These can be laconic applications providing basic gambling functionality to users or feature-heavy iGaming solutions with advanced functions such as virtual reality casinos or live-streaming.
In the next section, we will provide you with a plan for launching a gambling site. With its help, you will better understand what feature set to add to your solution and how to distribute your time and resources wisely.
6 steps to starting a gambling business
Starting a business in the gambling sphere can be a challenging task, particularly if you have never been involved in this industry before. Our plan for building a gambling site can serve as a basis for your strategy. Check it out below:
How to make your own gambling website: first steps.
The plan involves a deep dive into the niche, meticulous planning, finding a reliable partner, creating the solution, obtaining regulations, and project promotion. Let’s discuss each step in more detail.
1. Study the market
The knowledge of the target market is essential for your online gambling project. With its help, you will better understand the regulatory basis your business deals with, as well as your target clients.
Online gambling market.
Start by conducting a market analysis, competitor research, and user studies. Use the data you collect to draw insights into the demand for your services and the viability of your gambling business. This data can also be used to refine your product idea, prioritize the top features needed by your audience, and develop an effective marketing strategy.
After completing this step, you should have the answers to the following questions:
- What betting markets will you cover?
- Who is your potential customer, and what are their demographics?
- Who are your competitors, and what strategies do they leverage to attract and retain the audience?
- Should you start an online casino or add some other international games to the website?
- What languages, currencies, and payment methods your audience prefers?
- What features will form the core of your gambling project?
- What features will be added additionally?
In fact, the first step will help you build a long-term view of your business and develop a growth strategy. Satisfying client needs today is important. But no less important is thinking about tomorrow with regard to the client’s changing needs.
The data collected in this step will enable you to start an online gambling business in a data-driven way. You will also use it to continuously improve and enhance your vision of the project as you gain professional experience and deeply dive into the market.
2. Plan the project out
Many people are interested in how to create a betting website in the shortest term possible. However, impulsive decisions when starting an online gambling business can lead to money loss, market failures, time inefficiency, and other negative outcomes. The solution that significantly reduces all these risks is careful planning.
At the planning stage, you will define the scope of the project and the requirements, set goals and KPIs, and break the project down into stages or milestones. When setting goals, make sure that they are SMART. The abbreviation stands for Specific, Measurable, Achievable, Relevant, and Time-Bound. You can define general smart goals for the project as a whole and itemize them when planning each milestone separately.
SMART goals.
The pace of your project growth will depend not only on your plan but also on your capabilities. By capabilities, we mean your project team size and roles, project timeframe, budget, and resources available. If you have no in-house software engineering team and decide to outsource these services, your partner can help you distribute your resources efficiently. This is what we will talk about in the next steps to starting a gambling business.
3. Hire a gambling software provider
Gambling software providers possess the expertise and competencies needed for the creation of an engaging product. They work in this industry and know what features the target audience needs and how to attract their attention. To make the right choice of a partner, consider numerous options, comparing each company’s portfolio, pricing, and quality of services.
Preferably, choose a company that has experience in creating online casinos or some other types of gambling software. You can choose to build a gambling solution from scratch or purchase off-the-shelf yet fully customizable software. Expert gambling software providers will offer flexible options that can be adjusted to your budget and business idea.
When you find a reliable software provider, the next task will be to contact them and present your business idea to their consultants. They will share their vision of how to open an online gambling business with efficiency and ease.
Discuss your business ideas.
After the conversation, the gambling software provider will likely provide you with a basic project estimate, considering your capabilities, resources, and expectations. The price of software development services will be shaped by the complexity of casino website design, code complexity, technology choice, size of the website, etc.
The typical gambling software development team consists of software developers, QA engineers, business analysts, UI/UX designers, project managers, etc. If you agree to the estimate and sign the necessary documentation, the work will begin.
4. Develop and test the solution
To start a gambling business, you will have to focus on developing and testing the solution. Your gambling software provider will build the solution based on the plan you agreed upon. At each project phase, they will likely conduct manual and automated code testing to make sure that the code is of high quality and secure and that the next iteration can start.
Example of gambling software development.
Apart from the quality back-end code, your software development partner should carefully build the front-end part of the site and provide you with a catchy design. This is the part of the project that your potential clients will see and interact with. It’s important to combine the supreme performance of your solution with a laconic and pleasant look.
Here are some tips for the process of UI/UX design creation:
- Ensure seamless integration of your front end and the database so that the clients of your online gambling business face no data loss or website response delays;
- Do not overload your gambling website with resource-demanding and heavy features if you lack the capacity to ensure the excellence of their work;
- Use bright and catchy elements yet not excessively; emphasize only the elements that play their role in the client journey.
When the project comes to an end, the iGaming software provider will conduct final testing sessions that also may include alpha and beta testing. Alpha testing is the basic testing of the product’s quality. Meanwhile, beta testing is a more comprehensive procedure involving a focus group of potential users.
The users will check each element, button, page, etc., of the gambling site. Then, they will test in practice if the user stories defined at the initial stages work. The insights gained during such a stage help the software development team finalize the product, introduce usability enhancements, and make the website more intuitive.
5. Obtain an online gaming license
Like in the case of trading platform development, you will help to obtain a license when opening a gambling business. This step depends hugely on the laws and regulations of the country in which your business operates. When creating a gambling site, you will face one of the following conditions:
- Your country regulates businesses and gambling activities within its territory.
- The gambling niche in your country is captured by monopoly businesses that are hard, if not impossible, to compete with.
- Gambling activities in your country are prohibited.
- Your country lacks regulations and laws that would control this market.
If the first scenario is yours, you have all the chances to establish a transparent and effective business and can proceed with creating a gambling website. In the case of the second and third scenarios, consider reselecting the target market. The last case still allows you to enter the gambling market. However, you should refer for help to expert consultants to make sure that your business does not violate the local laws.
There are many jurisdictions where you can obtain international licenses. These include Gibraltar, Malta, Curacao, etc. However, obtaining a local gaming license should be your priority, as it is required at the level of international law. So, you need to choose the proper licensing jurisdiction in your country and make sure that your gambling website is compliant with all the rules and regulations.
A comparison of the 3 most popular jurisdictions.
When selecting the jurisdiction body to cooperate with, consider the factors that will impact your project. For example, how long the application procedure will last, how much money is needed for this procedure, the cost of taxes, licensing requirements, the reputation of the body, and so on.
After you do this, you can request a license from the regulatory body and move to the last step of our guide on how to start a gambling business.
6. Launch and market the solution
You are at the final step on your way to starting a gambling business. At the final stage, you will launch and promote your gambling site. For the promotion, you can leverage various advertising methods, such as social media campaigns and advertising, email marketing, paid advertising on Google, etc.
The insights into your competitors that you’ve collected at the first step may help you assess the effectiveness of various marketing methods and avoid mistakes. However, the choice of the method will depend on the interests and preferences of your target audience. Also, you can test and compare the effectiveness of different methods if your budget allows you to.
Examples of promotion methods.
Below, we present you with the must-have promotion methods to retain your customers.
Loyalty programs.
Online gambling is a highly competitive industry. Without loyalty programs, it may be hard for you to earn client trust. After all, they would be more confident in the established businesses compared to the new site they see for the first time.
Loyalty programs and bonus systems will be the reason for your customers to stay with you for a long time. They will treat loyalty rewards as an additional benefit in favor of your services and not the services of your competitors.
Bonuses.
As for the bonuses, the first one that catches the user’s eye is the signup bonus. Users will get it right after they register on your gambling site. You can also offer them referral bonuses received after a user invites a friend to join your gaming platform. Some other bonus types to offer are deposit bonuses, no-deposit bonuses, and free bets.
Other retention methods.
There are plenty of ways to convert and retain users. After studying your audience, you will better understand what works for them and what does not. For instance, your users may be interested in earning frequent player points (FFP) or VIP loyalty awards. Or, they may like customized AI-powered notifications offering them rewards after completing a particular number of games or bets.
Now, you know how to start your own online gambling business. It’s worth mentioning that your journey does not stop here at the stage of promoting the solution. You should maintain and support the platform, particularly during the first time after release.
By doing so, you will make sure that your product is up and running and can deal with the growing traffic. During the support and maintenance, you can also improve your betting app design and gain valuable insights into user interaction with the solution.
How to choose the best payment solutions for online gaming
After you’ve figured out how to start an online gambling business, choose the payment system to work with. The choice of a payment solution will directly influence the number of people trusting you and your services. A reliable payment solution provider can increase conversion and user satisfaction and ensure regulatory compliance.
Crucial factors to consider before choosing payment solutions.
Definitely, the choice will depend on the scale of your online gambling business, the region you operate in, the peculiarities of your business model, user preferences, and more. Here is the list of the factors to consider when making such a choice:
Fees and related expenses
To start your own online gambling business with no damage to the budget, consider fees and related expenses of using payment solutions. They typically charge payment processing fees. These are the fees businesses pay for the opportunity to receive money from their clients. Payment processing fees can be charged monthly or per transaction. These can be fixed price fees or a percentage of the payment sum.
To select the best payment gateway for your gambling website, explore the most popular service providers in your region. Choose the one that offers all the necessary features and an affordable pricing model.
Payment method variety
To start an online gambling business that pays off, you should provide a payment method variety for users. Your potential provider of the payment solution should support a variety of payment methods to give your clients enough flexibility. The more payment methods are supported by the service provider, the better. The must-have payment options include credit and debit cards, bank transfers, e-wallets, mobile payments, etc.
In this context, mobile payments are of particular importance. In 2022, mobile payments accounted for almost half of all online transactions worldwide. The popularity of mobile payments grows because of the user convenience, time efficiency, and security they offer. This should be taken into account when choosing the best payment solution with a focus on mobile.
Solution security
The more secure your payment solution is, the more chances that your users will eagerly invest your money in your gambling business. When choosing between popular payment solution providers, do not forget to dive into the security aspect. Discover the measures they take to offer the security of transactions for their clients.
Try to find a payment solution provider implementing advanced security measures. For example, data encryption, payment fraud prevention measures, compliance with industry standards, etc.
Compliance
The reliability of your payment service provider will have an influence on your reputation among clients. This is why you need to choose a compliant service provider and make sure that they follow the relevant regulations in their area. For instance, such regulations include KYC (know-your-customer), AML (anti-money-laundering), and others.
Integration ease
To start a gambling business, you need to make sure that the payment solution of your choice can be easily integrated with your website or application. This will reduce the development and integration effort and cut the costs involved in building a gambling site. The best scenario is when your payment solution provider offers integration tools like software development kits, plugins, or APIs, which can streamline the integration process.
Client support
Your payment solution provider should also offer reliable client support. Anytime you and your clients should have the chance to refer to them for help. The provider should be responsive and offer user guidance on their website. By choosing a trusted solution provider, you will make sure that your users get only a positive impression of making payments on your site and have the chance to resolve any issues quickly.
How much does it cost to start a gambling business?
The costs of starting such a business depend on a range of factors, including project scope, budget, project timeframe, location, licensing, compliance costs, etc. Establishing an offline business is always more costly compared to starting an online gambling business. Apart from the factors mentioned above, you will also have to buy equipment, rent premises, hire more people, and more.
When it comes to online gambling, it also requires profound investments, but such a business is more efficient and easier to manage. The biggest part of the funds is spent on hiring a tech team and creating a website. The rest of the expenses are related to marketing and promotion.
In both cases, you will have to invest money in regulatory compliance. The costs depend on the location of your business and the country in which you operate. Your software development partner will help you estimate the expenses and optimize the process of setting up a new business, considering all your limitations and capabilities.
Want to start your own online gambling business?
In this article, we discussed the essence of gambling and the process of gambling website creation. Basically, you will need the following:
- A good plan and project idea
- An expert gambling software provider
- A gambling license
- A merchant account
Before starting an online gambling business, you will likely refer for help to the online casino software providers that have essential expertise in product development. Together, you will plan out and implement the project considering the regulations, compliance, budget, and business goals.
If you are determined to enter the gambling industry and want to facilitate your effort with an experienced software development and design team, we will gladly help. Contact us for a free introductory consultation where we will meet each other and explore your business concept.