The top 7 things NOT to do when starting online gambling business
Do you want to start online gambling business?
Many people who start online gambling business don’t have any chance for success, because they do it for the wrong reasons. They want to get rich quick and they believe that this is the industry to make easy money.
Those who are lucky learn that 80% of the information is just a “buzz”. They learn the basics to get started on the right foot.
Others – people who will not listen – make their own mistakes and lose.
This list is not about the technical part of the business. It is easy to learn which platforms and software providers to use.
It is a collection of advice from several successful online gambling entrepreneurs and people in the industry.
Instead, it’s a collection of advice from several successful online gambling entrepreneurs and people in the industry.
1. Do not start online gambling business with a wrong mindset
There is no money on the ground and you will have to work hard to build your empire.
Just because online gambling is a booming industry does not mean you can just set up a website and the money will flow.
To become a bookie or an online casino operator, you need to know your customers really well in order to attract them.
Do you know their pains, pleasures, dreams, desires, fears and frustrations?
Do you respect your customers enough?
Ask yourself an honest question: would you pay $20,000 to someone who just used your free spins and got lucky? It can be painful (especially in the beginning), but you risk losing your license if you make a bad decision.
This is what usually happens to operators – they get in without certain rules and conditions, get unlucky and end up in a similar situation. Only when they lose a significant amount, they really start to think strategically about the bonus system.
Even if the house always “wins” over a long period of time – you can also have bad luck within a short period of time.
You need to realize from the very beginning that any online gambling is a business that involves not only profit, but also risk.
Make sure you have everything you need to run the business and realize that it is not about “get rich quick”. Having the right expectations will give you an edge in overcoming challenges.
2. Do not start your business without understanding the market – bookmakers, casinos, lotto, fantasy games are all different fields
These are different niches that you can focus on. But each niche is an inch wide and a mile deep. Understanding the niche is a must.
Also, there are different trends in each market. The market in the U.S. is completely different than the European or Asian market. There are different licenses and also different cultures.
For example, in the US, online gambling is illegal in most states. In some states, the license is so expensive that it would be insurmountable for a new company.
A license in Pennsylvania costs – $4 million*.
A license in New Jersey costs – $400,000*.
A license in Delaware costs – $50,000*.
Asian culture is different, and this is reflected in their games. Gold attracts wealth, and that’s why the user interface of Asian games is so different.
Make sure you have everything you need to run the business and realize that it is not about “get rich quick”. Having the right expectations will give you an edge in overcoming challenges.
3. Don’t start without right licenses, banks and payment systems
This is no joke. If you do not understand this, it can lead to criminal charges, license revocation, and other complications.
I mean, people sometimes make bad decisions based on information they find on Google. Like for example – getting a license for Curacao and accepting customers from the US or EU. You can lose a lot of money and get yourself in trouble if you ignore that. You can learn more about the licenses here.
There are problems with opening bank accounts for high-risk companies. In practice, you have several options to open bank accounts with different licenses. Contact one of our consultants to learn more.
Looking for a license that fits your business? In this post, we compare the top 4 most popular gaming licenses.
4. Don’t think you can do everything on your own!
There are plenty of events to meet people and make contacts. Sigma, London ICE, iGB events are held around the world. Toronto, Dubai, London ICE, Amsterdam, Belgrade, Malta.
The community is very welcoming and large.
Networking is the key! You can meet everyone you need in your business by attending some of these events.
Software providers, payment system providers, banks, legal and accounting firms.
Affiliates attend these events to network, meet new partners, do business and have a good time. So if you are looking for affiliates to talk to about traffic opportunities, these events are a good place to go.
5. Don’t start without understand the business
Do you know the marketing? What will your customer acquisition process look like? What channels will you use to target new prospects? What channels exist in your market today?
Some markets are highly regulated, and space for content is becoming increasingly scarce. What was available yesterday in some countries may not be available tomorrow due to new regulations.
How will you attract new customers and generate profits for your business? A good idea of what your Customer Journey will look like is a must before you start a gambling business, any business.
6. Do not get involved if you are desperate and it’s your last few hundred dollars
I know a lot of people say “get in and figure it out”.
However, it does not work that way. You are going to have to invest in software and marketing.
You will also need to support yourself and your family. It will take some time for you to reach critical mass and the break-even point.
This is not a business for the desperate, because even before you start your business, you will need to invest in things that are critical to the business.
7. Do not think that you can provide a bad service
It is a real business with all the differences in different countries. You need to convince your customers and earn your name. Otherwise, you risk making a bad name for yourself on askgamblers.
In this world where you can leave feedback, your name can be easily destroyed.
Remember that the house always wins. People do not pay you because you take their money and can never pay them back.
Provide a good service, a good experience so they will be happy to come back.
Do not play the new customer acquisition game. Play a customer retention game.
If you make one bad move against someone, you are out of the party.
A proven way to lose your gambling license
I received an email from a poor guy who had just won $317,000 with a local operator when his account was finally suspended.
The fake documents the operator presented made it clear that he was trying to scam a customer and avoid a payout. (screenshots contain some sensitive information, so I will avoid posting it)
Boldness of many operators is overwhelming. They falsify responses from Gambling commissions to rationalize their actions ad avoid payouts.
The only proper way to deal with such a situation is to pay the full amount. Since they chose another way, it is very likely that they will lose their license.
Conclusion:
Anyone can start an online gambling business. You can start online casino or a small sportsbook website in a relatively short time. However, keep seven simple rules in mind:
- Mindset is crucial, because any business is anything but simple.
- Understanding the market is paramount to your success.
- Get your online gambling license right. Check out these posts for more information on Curacao, Kahnawake, Isle of Man or Maltese licenses.
- Network and make valuable contacts.
- Get to know your customers really well and develop a viable customer acquisition strategy.
- Do not open an online gambling business if you are desperate.
- Provide great service to your customers! Remember two things: the house always wins, but it’s easier than ever to gamble away your reputation.
*Approximate cost in 2022. Excluding taxes and duties.
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