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Thread: Interested in opening an online casino.. Advice needed

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    Interested in opening an online casino.. Advice needed

    Hello,

    As my topic describes I am looking to open an online casino and then a book. Ill explain who I am before moving into my plan and questions, to hopefully save your time to the best of my ability.

    I own one of the top ranking online marketing firms, and we have businesses in many different markets; From manufacturing to video gaming services.

    Were US based, so as I understand it, we can't take US players. We can incorporate in Costa Rica, process payments in Antigua.

    I don't understand fully which licenses we would need, from who and why. I also don't fully understand the way the software developers operate in this market. It appears that they are more involved then just selling a price of software and also take a % of gross profit? Any clarification and explanation would be greatly appreciated.

    I was thinking Casino first and after that's running efficiently, sportsbook, followed by poker last.

    Financially we can launch this venture in house with no debts or issues with payments. I understand the landscape with fly by night cons and I know from a service standpoint my experiences will be focused on using the legitimacy and transparency as a selling point.

    Any assistance would be greatly appreciated, and in return any advice I can give on the marketing front for your companies look at as compensation.

    Best
    Ryan

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    To be blatantly honest - setting up a Costa Rica based casino that doesn't take US players on-board is financial suicide, the players that could play will stick to Gibraltar, Malta, IoM, UK, Nordic / Scandinavian etc based casino's, my apologies if I seem harsh, but I fail to see where your player base would come from.

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    Thank you for your reply.

    I'm confused why where a casino is legally established would effect player base?

    Could you please explain that, I may be overlooking something.

    We will rank on search engines for all the competitive casino terms, aiming at national markets in Europe, as our broader campaign solidifies us for the overall global rankings.

    That's where our expertise lies; while this is a very high value competitive market, so is adult, so is various industries that we have no issues with maintaining top placements.

    The affiliate systems seem interesting, but I have not researched that yet.

    As it stands I need to understand the licensing and software landscape before I can handle the next two concerns hehe

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    Licensing has become far more complicated in recent times - especially in Europe, where countries have realised the tax revenue possibilitities of regulating and licensing online gambling operators and have developed their own regimes, or sewn up the national market to keep foreign companies out. The issue of compliance with EU principles and the engagement of the European Commission is also something to consider carefully, and I would recommend you do some reading on that.

    Despite assurances that they are there for the player, in my experience most licensing jurisdictions appear to be in it for the money, and display little concern over the welfare of the player and intervening effectively when disputes between operator and player arise. The LGA in Malta springs to mind as an illustration of this cavalier attitude toward the punter. Search on Purple Lounge Poker as just one recent example of how ineffective the licensing authority turned out to be.

    The British market is about to undergo an important internet gambling transformation next year when new laws come into effect making access to the British market conditional on paying UK taxes and taking out a licence - even if the operator already has one from another jurisdiction.

    Costa Rica is famous for being a shell as a licensor, although many operators have made that country their base. Despite years of promises, there is no specific online gambling licence, and operators have data or business bits of paper, which many try to pass off as a real gambling licence. There's a reason Costa Rica is so popular, and it's because there is little practical enforcement. Most experienced players regard "licensing" from that jurisdiction as something of a joke.

    If you're going to get into the operator business, be very careful about which software provider/s you choose. There are literally dozens, but some are way more established, innovative and professional than others and can make both the quality of the gambling you offer your punters and the marketability of your casino better. Experienced players are usually very well informed on these companies, and will often allocate their business accordingly.

    These days providers do not insist on exclusive agreements, and many operators now offer games from several providers. Another big advantage of the major providers is that they have the contacts and the experience to make entry into the market a less arduous process for the prospective operator. They're generally more expensive in terms of royalties, but they provide ace technical services 24/7, businessand compliance advice and regular issues of new, quality games. Going cheap on software is not recommended.

    If you can maintain fast pay-outs, truly good customer response and service, and run a professional outfit, there is still space in this market for that sort of operator. Unfortunately the rogues, villains and not-that-good operators tend to outnumber the really good sites.

    If you want to study top operators I would suggest you search on 32Red, Club World and 3Dice, who to my mind tend to stand out.
    jetset

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    Thank you very much, genuinely and truly.

    The high end players seem to be particular as you said to specific software. I was thinking mg or playtech were the two highest regarded from my initial information gathering.

    So licensing seems silly then, which is how it initially sounded. I couldn't logically workout how regulating would work.

    I'm going to look for a legal consult with experience in the online gaming industry this week. Ill report what I learn in regards to pending legislations in developed markets.

    Best
    Ryan

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    Never a bad idea to explore your intentions with the right legal people.

    BTW, another source of up-to-date industry information is on this site under the "News" tab on the landing page.

    MGS
    and Playtech are probably the industry leaders at present, but there are others you could consider as well to ensure you have a broad choice and balance. I'm sure you have already found them.

    RTG
    , for example is well established, has generally good product, and has a slew of licensees out there; unfortunately a disproportionate number of them appear to be questionable when it comes to dealing with players, which
    imo
    detracts somewhat from their reputation.

    BTW in fairness I should add to my previous post by mentioning one licensing jurisdiction that has come a long way in making itself more player-sensitive
    imo
    . The Kahnawake Gaming Commission has over the past two years really pulled its socks up and now attends diligently to player complaints, using a highly experienced mediator to investigate and rule on disputes and generally police that jurisdiction's many licensees. Not everyone will agree with this assessment - especially players who have been ruled against - but in my personal experience they are now much improved and respond to players' complaints - not many jurisdictions bother to even do that!
    jetset

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    Quote Originally Posted by Ryan13 View Post
    I was thinking mg or playtech were the two highest regarded from my initial information gathering.
    Don't forget NetEnt: right now the demand for this software seems to be high while the number of casinos offering it is considerably low. If you were going to open a
    MG
    casino, you'd be going head to head with well established big monsters such as 32Red, it wouldn't be easy. It's always a smart thing to look at the market first
    IMO
    . Supply and demand.

    My 2 cents.

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    Hi Ryan,

    The importance of the igaming license is for the following reasons:

    1. Tax implications - some jurisdictions will offer a more favourable tax rate.
    2. Regulatory compliance - dealing with players' complaints.
    3. Players who see an official license will be more likely to initially play on the site - its an initial indicator that the company has passed some form of financial 'checking' by the licensing board.

    Software companies:

    Companies like
    MG
    , playtech etc, will generally take a % of gaming revenue - roughly between 15-20% with %s decreasing as revenues increase i.e. tiered bands. Also these companies will ask for an initial 'opening fee'- 20-75k GBP (Net Ent most expensive) / monthly payment fee, off the top of my head around 5kGBP / month. Also they might charge for additional services i.e. if you want a downloaded casino / poker site available in specific languages - handy if you are targetting a specific non english speaking market i.e. Hungary.

    You can also do a white label solution whereby you have another company who has the license and software in place and you just add your website etc and they will relabel their product for you - and if you like, run it for you initially.

    Ryan,

    Seeing as the poker base takes longer to build than say casino, I would advise launching both together.

    Hope this helps,

    Regards,

    Daz

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    Quote Originally Posted by Ryan13 View Post

    Any assistance would be greatly appreciated, and in return any advice
    I say save your money and invest elsewhere. The industry is saturated, many ongoing complications and a U.S. facing market that will emerge somewhat in 2013 and continue to grow moving forward.

    Too many big boys are going to be into this at some point and will continue to drive the little guy out of business.

    As always, just my opinion..
    Last edited by P.V.; 7th January 2013 at 10:36 AM. Reason: sp
    I love blackjack but I'm not addicted to gambling. I'm addicted to sitting in a semi circle.

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    Take a bit of your cash and spend it on flights and a hotel in London for ICE.
    All the answers to all your questions and everyone you need to speak to, all under one roof.

    http://www.icetotallygaming.com/

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