Online casino franchise: is it real to start a new online casino with franchise?

If you’re questioning yourself about an online casino franchise, you might be one of the two categories of businessmen. The first has been already for a while in the business and, knowing its hidden secrets, he would like to start an online casino, reasonably believing in a good outcome. The second is a new guy to the industry and is exploring ways to expand on the territory, which is “terra incognita” for him. Luckily for both types, there is such a thing as a franchise online casino – an easy way to make a brand new casino up and running. 

We’re exploring some must-know things about it in the article.

What is an online casino franchise?

Pretty much just like with any other franchise, an online casino franchise is a document coupled with know-how and the set of business approaches and techniques that would allow to quickly start a new business by copy-pasting the existing one. Imagine McDonald’s (which also works by the franchise, by the way) – you might spend 20 million dollars to open a restaurant like that from scratch, spending years to develop procedures and menu. But you could spend just months and 10 times less money to walk step-by-step according to some ‘franchise handbook 101’ to make it up and running from the ground to the point of opening doors to the first hamburger lover.

The same is with the online casino franchise: the entire scope of business, ways of doing it, and the principles of earning on it are described in some ‘handbook 101’, which you use to start a new casino. The elaborated ‘handbook’ usually includes such descriptions:

• business model
• requirements for a website and how to start one 
• licensing model
• legal issues
• payment issues
• operational model
• financial model
• client attraction model
• remuneration and cash flow model
• initial cost and a recurring licensing fee (‘royalty’).

Within this scope, you get a full explanation of the business and spend much lesser time and money than you’d otherwise spend by doing everything on your own.

What you should think of before jumping into it

Although there are a number of casinos selling their franchises, there are several issues a businessman has to ponder about before enrolling.

1. How secure and reliable the name of the franchise seller is? It has to have an established name and a good reputation to estimate the quality of the franchise itself. Also think of the business ethics, within which this casino operates to understand whether it is a fraudulent gaming house or a reliable future business partner for you. Studying the market will wipe many offers with a bad ratio of quality/price off the table.
2. How costly and risky an offered franchise is? Any businessman has to think about return on investment (ROI), so you have to understand how fully and clearly a franchise is elaborated in the model: finances, cash flow, client attraction, and retention schemes, guarantees of cash flow, operational costs, and the rest of things, which are the most essential. At this stage, you will also filter off some of the online casino franchise offers, which are too vague or too optimistic.
3. Will you hire dedicated personnel to run and develop your online gaming house or will do everything on your own? If you’re a busy man, option 1 is preferential. So, recalculate your operational model given the personnel salary.
4. Is a franchise a turnkey offer? If you’re given the instructions and left without any practical help or assistance, this is no good. A good franchise seller has to walk all the steps with you, practically guiding your hand from zero to ‘door opening’, also being actively assisting during the first several months of your work. Only with such attention, you can be sure you’re safe in the business and can focus on revenue growth, not on handling day-to-day mundane issues.

Pros and cons of an online casino franchise

Pros:

1. Thoroughly elaborated documentation, containing a description of the business essence, model, and practices.
2. You don’t have to think about the hardest things: licensing (as you join an already existing license), legal and payment parts, connecting game providers to your website, IT system of control, management, and tracking (as copies of everything are delivered to you by a franchise seller).
3. You only pay a fraction of the cost of starting everything from scratch. Depending on your desires and the essence of the franchise, this can be from several thousand dollars to several hundred thousand dollars. 
4. The same as the previous, only a fraction of time and effort is spent to start a new casino – usually not longer than 2 months.
5. You risk less money and generally have a better recoupment term.

Cons:

1. You will be responsible for client attraction and promotion since it is the biggest part of the business, which stays uncovered by a franchise. So either you have to be experienced in that, or you’ll have to hire some person or company to provide traffic to your website. 
2. The same goes for the variable parts of your business. For instance, what if you want to launch more games? Change texts on your website? Reconsider some of the rules? Change a web design?… These and much more issues would have to be handled by you, at your expense.
3. You won’t get a full sum of earning from profits – as a rule, it’s gonna be anything between 20% and 50% of net profits that you’ll make through your web casino. The deductions include many paragraphs but let’s generalize them by naming ‘royalty’.
4. You have to weed off all the vague offers of the market, having left only several good ones. Are you experienced enough to do that?

Opportunities that an online casino franchise gives to a businessman

A franchise is the simplest way today to start a completely new business, which you don’t know at all or know too little to effectively start it from scratch. Thanks to a significantly lowered threshold of market entrance using a franchise, you risk less money (which is always a big plus for an expedient businessman). If you find a franchise seller, who will guide you through the entire process to make it seamless for you to start it, you can consider yourself a lucky man. And you’ll have more chances to happy completion – fast and effective ROI.

Online gambling is a growing business globally, especially during pandemics when many people reconsider their entertainment and working habits. Growth as a factor itself is one of the guarantors of a lesser risk of failure. If you follow the process given in a business model (and listen to your franchise mentor), you can completely eliminate the risk of failure of your new enterprise.

Before jumping into it, however, you have to define for yourself such important questions as in which countries you will work, what payment channels you will use, and what exactly franchise you will buy – these define the daily scope of your activities and revenue. For instance, it is inadvisable to go to shrinking markets, like the one in Australia. They might be also very challenging or costly. Skip the UK since it is too costly and regulated. Look at Canada, Russia, Africa, or ‘North bloc’ – Scandinavian countries.

Also, one general piece of advice is that it is reasonable to consider stepping into this market if you envision it as auxiliary income, in addition to some other businesses you’re already running. Otherwise, if you’re thinking of buying an online casino franchise to make it your first and only business, you have to think of this step very cold-headed.

Conclusion on the franchise online casino

Starting an online casino as a business is much simpler with a franchise. If you follow our recommendations on selecting a good offer and buy it from a loud-named well-established brand, then this should be a good idea with an appealing ROI.