Costs and Revenues Stemming from Online Casino Operations

posted by Chris Valentine

Online casinos’ monthly revenues differ significantly but it is possible to make some average assumptions just for the sake of fun and math. It is important to note that all numbers within this article are an assumption.

The Costs of Operating an Online Casino

In order to calculate the monthly revenues, it is logical to start by understanding the monthly maintenance costs. For starters, best online casino UK don’t develop their own software but they lease it from software providers and they are costly. Good software providers charge around $12k monthly and also take 15% of the casinos’ winnings.

Cost of Affiliate Programmes

Additionally, most online casino operators have affiliate programs to drive more clients to their website. An affiliate program means that a person or a company advertises the casino on their website and gets a commission from every player that arrives via their affiliate link. There are two types of commissions, cost per acquisition (CPA) and revenue sharing.

CPA means that the affiliate gets a one-time payment for every player that signs up and makes a deposit. These rates go from $25-500.

Revenue sharing means that the affiliate gets a percentage of the losses for all of the players that came from their link. An average is around 25%. But the catch here is that if a player wins, this negatively impacts the affiliate too. This is how a casino ensures that like wins, losses are also shared.

The Costs

Let’s say that $12k monthly goes for software alongside 40% of revenue going to affiliates and the software provider. Additionally, online casinos pay for hosting services as well as customer service. Let’s assume that both of these amounts to approximately $8000 monthly with $6000 for customer service and the rest for hosting.

The size of the online casino market is approximately $40 billion which is around $4 billion monthly.  There are around 4 thousand online casinos worldwide and if we divide the two, we get a monthly revenue of $1 million per casino.

This is probably not the case since according to the Pareto principle, the top 20% always earn around 80% of the revenues. Still, even if we take that each earns $1 million, we start by removing 40% as specified above which leaves $600k and around half a million of dollars monthly once other costs are removed. Still, add the employees and the cost will lower.

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