How Do You Open A Casino – The Complete Guide

How do you open a casino?

Owning a casino is the ultimate goal for many gambling enthusiasts. However, we all know that becoming an owner of a gambling establishment and opening a casino is a bit of a complicated and complex procedure. Despite this, it is not as impossible as one may think. Starting a casino is actually much easier than the industry wants us to believe, especially in this era of online gambling where online casinos dominate the gambling market. So, how do you open a casino? 

Well, owning a casino requires money, an impeccable business plan, and plenty of hard work. In order to build a casino from the ground up, you first need to learn several key points that are crucial in your journey to owning a casino. From knowing how much does it cost to open a casino to understanding the gambling laws and regulations in your jurisdiction, these are the most important factors you should take into account before starting a casino.

How much does it cost to open a casino?

As you probably already know, owning a casino is not a cheap venture. Especially if you are planning to own a land-based casino establishment. Before starting your own casino business, you first need to determine what type of gambling services you want to provide: physical or online. This is very important, as depending on what type of casino you wish to own will determine the costs of your new casino business venture.

Online Casino Costs

Let’s say that you decided that you want to open an online casino. The first thing you need to do is learn how much would it cost you to launch your casino website. The costs of opening a casino on the Internet will depend on several key factors, but the biggest factor of them all is the jurisdiction in which you wish to provide your services. This is why it is imperative to decide which countries you want to have access to your casino website, as different jurisdictions will be charged different fees from your licensing provider.

License

Assuming that you want to run a properly licensed and regulated online casino platform, as you should, the costs of the casino license will vary depending on the jurisdiction you are going to operate in. There are three most widely-used online casino licenses in the industry, and these are the Malta Gaming Authority, the UK Gambling Commission, and the Curacao license, some of the world’s most reputable online gambling authorities.

With that being said, let’s take a look at the cost of these three licenses and how much it would set you back if you decided to go for one of the three most popular gambling seals.

• Curacao – $18,000 – $23,000

• UK Gambling Commission – $29,000 – $239,000

• Malta Gaming Authority – $20,000 – $300,000

The pricing of these licenses varies from several thousand dollars to up to several hundred thousand, and this is not by accident. Licenses from Malta and the United Kingdom are more expensive as they carry more value and are harder to obtain, as well as harder to maintain. Reputable gambling operators such as the MGA and the UKGC require strict and complex screening processes prior to issuing a license, but at the same time, make your online casino more reputable. This is why it is very important to set a huge chunk of your budget and obtain a proper online casino license.

Expenses

Now that you decided which type of online gambling license you want to use to launch your online casino, you should learn how much would it actually cost you to launch an online casino. Given that all prices are variable and depend on different factors, we will make an estimate of all costs that you need to take into account prior to starting a casino. 

• Website: $5,000 – $50,000; from simple to complex and fully customized 

• License and legal fees: $20,000 – $500,000; legal compliance and jurisdiction fees

• Hosting services: $300 – $2,000/month; depends on traffic volume

• Game software: $10,000 – $150,000; costs for third-party software providers or building in-house entertainment software

• Payment providers: $1,000 – $5,000; payment getaways, merchant accounts, etc.

• Security: $1,000 – $10,000; SSL encryption, firewalls, etc.

• Affiliate software: $1500+/month; depends on traffic volume

• Customer support: $3,000 – $10,000/month; costs for customer support agents or outsourcing support

• Marketing and advertising: $10,000 – $200,000/month; PPC, SEO, social media, ads, etc.

• Miscellaneous: $2,000 – $10,000; miscellaneous costs such as plugins, additional software, etc.

From here, we can see that the total initial cost to start an online casino, per our estimate, is between $200,000-$1,000,000. And this is without mentioning the salary costs that you are obliged to pay your employees on a monthly/annual basis. 

Salaries

Assuming that you are the CEO and Founder of the casino, your annual salary would vary between $100,000-$200,000, and your responsibilities would include overseeing business strategies and operations.  

With that being said, let’s have a look at the types of employees you need to effectively manage your online casino, as well as how much would it cost you to pay them an annual salary. 

• CTO: $90,000 – $150,000;  in charge of tech-related matters and software

• CFO: $80,000 – $130,000; in charge of finances

• CMO: $80,000 – $120,000; in charge of marketing

• Legal Advisor: $70,000 – $120,000; in charge of the legal department

• Game Developers: $60,000 – $120,000; maintain and develop gaming software

• Programmers: $50,000 – $105,000; maintain operating systems and software

• Security Analyst: $60,000 – $110,000; handles security risks and breaches

• SEO/SEM Specialists: $50,000 – $90,000; in charge of online visibility and ad campaigns 

• Graphic Designer: $40,000 – $75,000; handles visual elements, ads, game graphics, etc.

• HR Manager: $60,000 – $90,000; handles employee relations, recruiting, training, etc.

• Data Analyst: $60,000 – $90,000; handles analyzing market trends, player data, etc.

• Accounting: $40,000 – $60,000; handles taxes, payroll, financial records, etc.

Keep in mind that the salaries we presented above are approximations, and as such, they can vary depending on several factors such as experience, location, etc. Consequently, this estimate will help you get a better idea of how much your total cost of starting a casino website would be, as well as how much would it cost you to maintain your online casino business annually.  

Or if we go into more detail, the numbers above show that you would pay roughly $900,000 in salaries per year, or about $74,000 per month. Again, this is variable, as these numbers will mostly depend on how the factors that we mentioned above.

Land-Based Casino Costs

Now, if you think that starting a casino website is expensive, wait till you see the costs of opening a physical casino establishment. Just as you would expect, starting a casino on the ground is a bit more expensive than opening a casino on the internet. For starters, just as with the online casino, the costs of your physical online casino business will depend on several key factors such as:

• Budget
• Location
• Laws and Regulations
• Games
• Technology
• Marketing

From here, you should know that small physical casino establishments can cost up to $5 million, while medium-sized physical casinos may cost up to $20 million. The cost of large physical casinos can vary from $20 million to up to several billions of dollars.

With that being said, let’s have a look at the estimated cost of some of Las Vegas’s most popular casinos:

• MGM Grand – $1 billion

• Wynn Las Vegas – $2.7 billion

• Red Rock Casino – $925 million

• Paris Las Vegas – $785 million

How much does it cost to build a casino?

One of the most important factors you need to consider before you build a casino is the location. Finding the right location is imperative, as there are countries that mandate building retail casinos in designated areas that are usually located outside major cities. This is very important as the location of your land-based casino will dictate the traffic and how many visitors your casino will have. Naturally, it would cost you more to build a casino within and around big cities than it would cost you to build one in rural areas. 

Moreover, you need to take into account important logistic factors such as transportation, as you want your casino establishment to be accessible via at least several means of transport.

Las Vegas is a great example of a city that is strategically impeccable when it comes to accessibility and location, as you can access it by three means of transportation, including by plane, car, or train. Remember, location is everything when you start a new business, especially when you build a casino.

Now, let’s assume that money isn’t an object and that you want to build a casino that is just as big and captivating as those Las Vegas casinos, and let’s say that you want to build this behemoth in Las Vegas, Nevada. Well, the most expensive casino ever at one point was the Wynn Las Vegas, and it cost a whopping $4 billion to construct. For comparison, if you want to build a casino that is smaller and save money, it would cost you around $950 million on average.

The reason why most Las Vegas hotels are so expensive to build is that they have a long list of amenities such as thousands of hotel rooms, concert halls, multiple restaurants, nightclubs, amusement parks, pools, etc. This means that if you want to give those hotels a run for their money, you simply have to offer the full spectrum of services and build a casino that can compete with all of those behemoths.

From here, let’s say that you want to open a casino in Las Vegas that will feature 3,000 slot machines and 50+ table games. The cost of this would amount to around $2.2 billion, to say the least, with the full breakdown going something like this:

• $100 million for staff

• $125 million for game providers

• $770,680 for licensing fees

• $2 billion for a hotel facility in Las Vegas

If spending $2.2 billion seems like too much and you want to build a casino with a more reasonable budget, then you be happy to hear that the average cost of a hotel with a casino in the United States is around $23 million. It is true that if you add a hotel to your land-based casino your costs will be higher, but keep in mind that opening a hotel next to your casino is another stream of profit since reports show that many gamblers and casino visitors prefer to stay the night if they have an option to do so. 

The average value of US casino hotels:

• 4-7 story hotel – $24 million

• US hotel – $23 million

Keep in mind that construction costs will also depend on the type of building materials (light or heavy), as well as the location that you selected to build your casino. This will include several crucial logistical factors such as transportation of the construction materials, transportation of the workers, site accessibility, time of the year, etc.

Casino Entertainment

Owning a physical casino means that you have to provide your customers with diverse casino entertainment. Unlike online casinos where one software provider can “lend” you hundreds of games, land-based casinos work a bit differently. This is because the cost of setting up casino games in your land-based casino establishment will be far greater than doing so in an online casino. 

From here, you should know that most casinos offer:

• Video poker
• Roulette
• Blackjack
• Slots
• Craps

On the other hand, bigger casinos also offer:

• Sports betting
• Live poker
• Baccarat
• Keno

Now, it is essential to decide what type of entertainment you want to dominate your casino hall. On average, slots occupy around 70% of the floor, where the rest is reserved for casino tables for casino games such as blackjack, roulette, or craps.

This is an important decision, as the costs of each type of entertainment vary depending on what you want to offer. The reason why most casinos decide to go for slots is because slot machines come with a significantly smaller RTP (return to player), which in other words means that they have the biggest house edge.

Let’s have a look at the most popular casino games as well as their setup costs, revenue, and house edge fees:

Video Poker

• Cost: $500 – $10,000
• House Edge: 0.46%
• Revenue: $60,000 per year

Slot Machines

• Cost: $15,000 – $30,000
• House Edge: 2% – 15%
• Revenue: 70% – 90%

Blackjack Table

• Cost: $4,000 – $20,000
• House Edge: 0.5%
• Revenue: $10,000 per day (rates vary per casino)

Poker Table

• Cost: $15 – $10,000
• House Edge: 0.46%
• Revenue: 5% – 10% of the pot

Baccarat Table

• Cost: $4000 
• House Edge: 1% – 15%
• Revenue: 88% 

Craps Table

• Cost: $5,000 -$10,000
• House edge: 0.0% – 16.67%
• Revenue: $447.2 million

Chips

In addition, you need to take into account the cost of the chips. In order to cover a variety of denominations, you will need to purchase up to millions of chips, as well as chip cases to organize and hold all of those chips. The cost of the chips will depend on several factors such as the material that they are made of, and whether you are going to customize the chips with the logo of your casino.

On average, one hundred chips in different denominations will cost you between $5-$15, whereas for customizable chips that are made of a better material you will pay anywhere between $30-$200. To sum it all up, you should set aside a budget of $20,000+ for the chips and the chip cases alone. In other words the bigger your casino, the bigger the expenses for the chips.

Operational Costs

Another important factor to take into account when you build a casino is operating costs. More specifically, operating costs will include expenses such as water, electricity, heating and air systems, security, and staffing costs. Needless to say, the cost of your operating expenditure will depend on two important factors: the size of your casino, and the location of your casino. Naturally, the bigger the casino, the bigger your operating costs. 

Also, another factor that will determine your operating cost is the location of your casino, I.e. which state or country you are planning to open. This is because the price of everything that we mentioned above, including the salaries, varies from one country to another and from state to another. This is why it is imperative to make an impeccable business plan prior to opening a casino and do thorough research on the market where you are planning to build.

Staff

A crucial segment of running a casino is staffing. Similar to online casino businesses, physical casinos require even a longer list of employees from different sectors and departments. In addition to employing a management team that includes representatives from the legal, financial, marketing, and other upper-echelon departments, your casino establishment will require you to employ individuals who will take care of day-to-day activities and obligations.

This includes a range of job openings, and we can divide them into two categories: gaming and maintenance.

The gaming jobs will require:

• Security
• Cashiers
• Dealers
• Pit managers
• Pit bosses
• Customer service representatives

The maintenance jobs will require:

• Hotel personnel
• Human Resources
• Cleaning crew
• Waitstaff
• Cooks

Now, your expenses for wages in both of these departments will depend on how many people you employ. Some of the biggest casinos employ up to 3000 people, while smaller casinos have around 50-200 employees. It all depends on the size of your casino. 

How much you will pay on salaries will depend on how many hourly and salaried employees you have working for you. On average, hourly casino employees earn between $10-$20 per hour, and this is excluding tips.

Salaried casino employees, such as pit bosses and management, earn between $50,000-$100,000 per year, depending on their duties and obligations. Again, it all depends on the size of your casino, which will dictate how many employees you will have working for you.

Licensing

Opening a casino also means that you are going to have to apply for a gambling license, also known as a license permit. Regulated online casinos, regardless of which part of the world you are planning to start a casino, require a license in order to get the “blessing” from the government or local jurisdiction to operate. Moreover, be prepared, as the license approval is a long and extensive procedure that may subjugate you to a list of legal obligations, including:

• Screening of the owners
• Background checks
• Methods and procedures audit
• Proof that the entertainment is random and fair

The license fee will depend on the state or country you are planning to open your casino, being that different jurisdictions have different laws and legal requirements. For the most part, land-based licensing permits are more expensive than online casino licenses as retail casinos come with a whole new set of regulatory and logistical challenges, including an alcohol permit, self-exclusion laws, etc.

From here, it is clear that the license permit fees for land-based casinos are different from one state to another, not to mention from one continent to another. 

• European Union: $300,000-$1,000,000

• Offshore: $100-$300,000

• Downstate: $500,000-$1,000,000

The last thing you need to know about the license permits is that they also require annual renewal fees. How much you will pay for the renewal fee, and how frequently you will have to get a renewal of your gambling license permit depends on the country/state that your casino operates in. 

Also, keep in mind that the tax that you are going to pay for running your casino will depend on your revenue. This is fairly simple mathematics, as the more money your casino makes, the bigger the tax on your revenue. It is a good idea to check the taxation for games of chance in the location where you are planning to open your casino, as the tax varies from one state to another.

Key Takeaway

Now that you know how to open a casino, and most importantly, how to own a casino, let’s put everything that we covered into several simple, yet key points. This will help you get a better mental image of what steps you will have to take before opening a casino from scratch.

• Casino Type – first, you need to decide what type of casino establishment you want to open, land-based, or online.

• Legal Structure – decide whether you want your casino to be a sole proprietorship, a partnership, a limited liability company, or a corporation.

• Check Regulations – you must learn the local laws and regulations in your country, as this will tell you whether it is actually possible to start a casino.

• Choose a Name – choose a name and create unique branding that will distinguish your casino business the most and that will separate you from the competition.

• Business Plan – create an in-depth, long-term business plan with the help of expert financial advisors to determine the costs of starting a casino.

• License – whether it is an online casino or a retail casino obtaining a valid license is crucial for the success and reputation of your casino.

• Software/Entertainment – explore the market to see what type of entertainment you are going to provide to your customers.

• Marketing – create a marketing campaign to promote your newly established casino brand and boost visibility.

Final Thoughts

Now that you know everything that there is about opening a casino, you are ready for the next part of your journey toward owning a casino. Just remember, starting a casino requires a lot of time, dedication, hard work, and finances. Don’t be discouraged by the pricing of owning a casino, as the return on your investment will be far greater if your plan is successful. Good luck! 

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