Especially if you go it alone, the costs associated with establishing your own online gambling platform can range from high to astronomical. Even if entering the market at a lower outlay price point, using an online gambling software provider, it's worth considering the realities of making that investment. Perhaps ironically, it is also worth considering your attitude to risk, alongside what success might look like for you, what your most generous timeline might be for it, and how much patience you can afford to have.
These initial costs can blow the unwary or unprepared of the water, and making sure you have enough for this part of things (plus a contingency) is imperative.
Licensing alone can run into the double figure thousands. Getting a bespoke platform up and running, able to handle different device and operating system compatibility seamlessly, will also be a significant cost.
A decent range of titles for your players should also be factored in, as well as the cost of adding to your library at regular intervals.
Now is also not the time to cheap out on any specialist advice - find a lawyer with the relevant gambling expertise, and the right kind of tax specialist, too. A lawyer is especially important if the source of your funds is from investors other than yourself.
Alas, while it might have worked for fantasy baseball fields in the movies, if you build it, they will come is not enough to get your online gambling business off the ground.
Potential customers need to know you're out there, which is where marketing and affiliates step in: boosting awareness of your site and sending potential users your way. This is a vital part of the puzzle, but be prepared for not every single new customer lead to turn out to be red hot. It's possible, based on the kind of deal you have in place, that users from affiliates end up costing you, especially if they are low stakes or infrequent gamblers.
Personnel to staff your frontline customer response, even if outsourced to a cheaper labour market, costs significant amounts. Online gambling platforms obviously operate 24 hours, and support - ideally multilingual - should be available accordingly.
Having access to legal and tax specialists within the field, to keep you on the correct side of changing regulation and legislation, is an outgoing that cannot be scrimped on.
How many bells and whistles do you envisage for your platform? Are there additional functionalities that you want to be able to offer in the future in the hopes of pulling in the punters? How many markets do you hope to expand into?
The cost of vision, whether expanding into adjacent markets or adjacent offerings, can be high.
This will depend on the games you have on the platform and the amount you keep from customer bets on them: these are known as return-to-player (RTP) margins, and they usually sit at around 5-20%. On top of this, the customer base you have plays a crucial role. A few good games, played by a large number of people, could potentially be enough to put you back in the black.
However, it might take time to build up a player base or to be able to capitalise on the fact that a particular game is more popular among mobile gamers rather than desktop users. It definitely pays to have a range of games, playable across platforms, that are likely to appeal to your user demographic.
The big risks are not keeping up-to-date with changes to legislation and regulation, and finding oneself inadvertently outside the law. The cost of not being able to operate or possible fines is higher than the cost of keeping on top of things.
Security is another cost that shouldn't be understated. Keeping your platform updated and secure with the relevant security protocols.
Competition is a real challenge, too, even in a market growing as steadily as online gambling is. Does your offering stand out enough? Are you offering enough discounts, bonuses, and other incentives, or is another similar proposition managing to undercut you? Are you offering too many incentives cutting into your profit margins?
The biggest danger from an investment point of view is that all this outlay is in vain, and nobody really comes. An online gambling proposition cannot be profitable without players.
Success isn't a one-size-fits-all measurement, and fitting your metrics and expectations to the reality of your situation is always advisable. You might use profitability as a blanket measure of success, or revenue above a particular level. You might take breaking even or the number of unique players a week as your standard.
You know what you want to achieve, that there may be milestones worth celebrating on the way. And when is enough enough? When do you draw the line?
Only you know how much you could afford to lose and how long you can afford to wait.