Whitelabel Online Casino vs a Turnkey. Don’t start a white label casino in 2023. Final Warning
Want to start your own white label online casino business?
First, you need to understand the difference between a white label casino and a turnkey casino.
Here’s one of the myths that many people believe: white label casino providers give you a sublicense so that you can operate worldwide.
This is far from the truth.
When you decide to set up a white label casino, you operate under the platform provider’s license.
It’s their license and the only thing you own is the domain they insert into the hierarchy.
You only get the right to direct traffic to your own domain.
Your whole job is marketing! You’re supposed to attract visitors and generate revenue. All the money is accumulated in accounts of payment system providers that belong to the casino platform provider.
You own the domain of your whitelabel online casino! And nothing else…
That’s right… You don’t own the platform or the accounts with the payment providers.
You have no control over cash flow and only get paid when the platform has paid out all your clients.
And here’s why…
On the biggest platforms, several hundred white-label online casino operators operate under the same license.
- The platform loses the license, the owner gets blacklisted.
- Hundreds of operators (like your casino) are then immediately out of business.
The risk is high, because the consequences are severe
Nobody wants that!
The only way to control the risks is, of course, to control the flow of money and make sure that everyone follows the rules.
This means several things:
- Your customers must be paid first, before anyone else.
- You keep a rolling reserve fee with the platform to cover any profits your clients make and other fees.
- You don’t get paid until the revenue share deal is deducted. (For white label, revenue share can be as high as 15%, GGR)
- You get your paycheck only after everyone has gotten their piece of the pie. That’s, of course, if there’s anything left over.
Remember! White label online casino providers want you to have a rolling reserve to handle any risks
The more the GGR, the more you’ve to keep in rolling reserve.
The platforms want you to guarantee between 15% and 25% of your customer’s balance.
So if you made $1,000,000 last month on GGR, your payouts were $700,000, and players keep $300,000 of that with you, your rolling reserve is between $45,000 and $75,000.
And if all your customers want to cash out today, you’ll have to pay them out of your pocket.
The rolling fee usually remains for one month and is then recalculated.
If your revenues increase and your GGR grows, the rolling fee practically increases as well, because the balances of your players go up.
- You also have to pay a revenue share to the platform. (can be 15%, GGR)
- Also you have to pay out all bonuses to your customers.
- You also have to pay salaries, marketing and fees for payment providers.
If you plan to invest your earnings in marketing, you should think again.
Because most of your money stays on the platform.
These aren’t the only limitations of the white label model.
The list of countries you can work with for your white label casino is limited
Gaming platform providers have to remove many countries from the list of allowed countries because licensors force them to do so.
You heard it right!
Countries that are allowed under your turnkey solution can be blocked by white label casino providers.
For example, you may not be allowed to work in Mexico. Your competitors who run their business turnkey may not have any restrictions at all.
Imagine dozens of different white label operators operating under the same gambling license in Curacao. If one of them breaks the rules, all of them will suffer.
You won’t be able to operate in many countries because they’ve been banned by the licensor.
Want more casino games or payment methods for your white label casino?
All major gaming platform providers have a list of online casino software that they offer as part of their game aggregation platform. They also have dozens of payment systems integrated for all online casino operators.
- You won’t be able to embed additional casino games.
- You won’t be able to add additional payment methods and negotiate fees.
- You’ll not be able to customize the design of your online casino.
You get what you get, and you have to accept it and deal with it. Or die.
There are no customization options because you’re too small. Dozens of game providers are constantly looking for platform integration. Even if they say they consider your games to be integrated, don’t expect that to happen anytime soon.
So how does a white label casino work?
The reason why the white label casino model became so popular was because of the time it took to organize the entire setup.
It looks simple!
They say you can have all the online casino software, the games, and a sportsbook offering much faster and cheaper off the shelf.
Take the white label casino software package, pay a relatively small setup fee and you can have a business!
The gaming platform providers provide you with the platform, the software providers (Evolution Gaming, NetEnt, EvoPlay, iSoftBet games, etc.) and they already have payment system providers that they simply rent to you.
“All you to do is send traffic and make money.”
So you end up competing against hundreds of entrepreneurs who, just like you, want to “test the waters” first.
Ask yourself a question: do you really want to test the market or are you just investing all the money you have?
Because the platforms own the license, they want to control your business to eliminate risk
Because the platform providers bear all the risk, they also want to control every whitelabel casino. Just as if it were their own.
They control your entire revenue stream and only pay you the net profit that your casino generates.
You get paid once a month (instead of paying yourself)
How much money do you need to run your business for a month?
You need to pay your people, cover marketing and operating costs.
All out of your pocket…
You also have to pay start-up fees and build up a running reserve.
Most companies don’t get any money at all for several months because they have to leave all their money with the platform.
They also have to keep investing in marketing. Out of their own pocket.
What looks like a good deal in the beginning becomes a rat race that you can’t escape without taking extra steps.
You can’t customize your design (and make it look like stake.com or any other design of your choice)
You’ll get a list of about ten templates you can use for your site. That’s it.
A cookie-cutter approach to make sure you don’t show things that aren’t allowed on your homepage.
Because if you do, the licensor mightn’t like it and the platform will lose its license.
So if you want to look different, choose a turnkey solution instead.
Why is a white label casino not a sustainable business model?
Like it or not, the days of the “white label” will be over sooner or later. Regulated markers and Tier 1 licenses like the Maltese MGA and the Isle of Man gambling license don’t allow this business model at all.
The Curacao gaming license is the last to offer such a possibility. The model has been put to the test every day for several years.
The licensors in Curacao aren’t happy about the challenges they face to make this model work.
The bottom line is that you take an uncertain risk when you choose a white label casino platform.
Make sure you know all the pros and cons and that you the capital to switch to a turnkey system if needed.
The TOP 3 white label casino platforms according to License Gentlemen:
- SoftSwiss – one of the market leaders with more than 1400 employees around the world. They offer both turnkey and white label solution. If you want to learn more about SoftSwiss – click here.
- BlueOcean Gaming – they have several products including turnkey, gamehub and whitelabel. If you want to learn more about BlueOcean Gaming – click here.
- SoftGamings – just like previous companies, SoftGamings offers both white-label and turnkey solutions. If you want to learn more about SoftGamings – click here.
When should you choose white label casino solution instead of turnkey?
The speed and cost of building a business is usually a reason why operators choose to white label. That’s the way it should be… theoretically.
In practice, the difference is about a month to the cost of not having control of your business.
You risk losing all your money and getting a significantly worse deal because you don’t want to wait around four weeks.
The turnkey model allows you to work on multiple processes at once
This way you can save a lot of time.
This is the timeline of a real project for one of our customers.
It took only three months, from the moment they’d nothing to the moment they went live.
If you’re an entrepreneur and you’re just starting out, you might think that the license is the first step before you can move on.
Before you can set up the platform, connect games, and connect payment systems.
That’s why, for some businesses, it can take twelve months or more to get your business up and running.Not good for a startup that needs money to pay bills!
You can get your turnkey online casino in three to four months
You don’t have to wait. Rather, you need to work on several things at once to make money within 3-4 months.
Do you want to start your turnkey online casino?
We’ve written a separate article on “How to successfully open an online casino in Asia”. It’s a practical guide, in which we also provide information about the necessary budget for the start.
Most people do this step wrong and therefore get stuck and never get going.
You need to have a plan and a schedule to take advantage of Turnkey.
This is exactly what professionals do – they start projects left and right. You should have the same mindset.
Otherwise, you’ll always be behind and take forever to start a casino.
Do you want to find the fastest way to start your online casino?Contact Us
When should you go for a turnkey project?
The “turnkey casino” option is ideal when you’re serious about your business. If you’re building it to sell, or if you want to make more money by reducing revenue share expenses. And most importantly, if you want to keep control of your business.
Usually, anyone who starts as a white label becomes a turnkey online casino operator because they realize how much more money they can make and time they can save.
This only applies to companies that have enough capital to make a transition.
Don’t count on your profits to be reinvested, because you’ll leave most of your money hanging with the platform.
A turnkey casino means you have your own egaming license (an asset you can sell)
You also have a bank account, accounts with payment systems and agreements between online casino software providers.
Compare the Top-4 most popular international gambling licenses for your turnkey casino in this post here.
With a white label, you’ve to settle for what they give you and wait for the design team to customize the look of your site.
You still have to rent an igaming platform though.
The setup fee you pay for turnkey casino software may be higher than the setup fee for a white label online casino.
However, the revenue share is always lower. Much lower.
You don’t have to keep any rolling reserve fees and you can reinvest all your money in marketing and staff.
Opt for white label if you want to test things out quickly. Have a one-time deal on traffic? Get a white label platform, make your money and forget about it. Or take your loss and forget about it.
The risk of opening something that soon won’t exist is too great if you’re building a business that’s going to last for years.
How much does a turnkey solution cost compared to a white label solution?
You can get a good turnkey platform for a one-time setup fee of 30,000 EUR and a revenue share of 5% or less.
A white label solution can cost you around 10,000 EUR for setup and up to 15% revenue share.
Sooner or later, your turnkey system will be much cheaper to maintain than a white label.
10.000 + 0.15x = 30,000 + 0.05x
Here is how much you need to earn to make your turnkey casino decision pay off…
So you only need to earn about 200,000 EUR on GGR to break even. With the turnkey online casino model, you save a lot of money on everything you earn after that.
Take a look now at what happens when the total bets of your players are $1,000,000
For example, the winnings of your players can be $920,000
You pay 15% for your white label platform – $12,000
If your player’s actual balance is $300,000 and the rolling fee is 20%, you must leave the rolling reserve fee – $60,000 for the platform.
When the dust settles, you will end up paying $2,000 out of your pocket. Do not forget that you will still have marketing costs.
For your turnkey business you will earn $58,000
That’s a sum you can invest in marketing or hiring new employees to grow your business.
- Many white label casino providers today offer both turnkey online casinos and white label solutions. You can download an ultimate list of platforms here.
- The white label online casino model is a dying option and you risk losing your entire investment.
- The time difference between setting up a turnkey and a white label casino solution is negligible.
- With Turnkey, you’ve your own designer at your disposal to customize the design of your website. You can create any proven design and use it for your turnkey casino. With your white label casino, you don’t have the same choice. You get a default template and it’s up to the gaming platform owners to decide whether they’ll work on your design in the future.
- Almost every business that starts with a white-label casino eventually moves to a turnkey system. The transition can take several months and isn’t cheap.
- You cannot add more games or payment systems to your white label casino. This feature is customizable only for turnkey casinos.
- You are better off having a turnkey business because you’ve control over your business without having to rely on anyone. With any white label casino solution, it only takes one click to shut down your entire business (and say goodbye to your investment).