How to start an online casino? White label vs turkey solutions, licences, team and cost to start

This article and video is for those who want to try to launch an online casinos of the own, a choice that boils down to answering several key questions:

1. What kind of platforms are there, and what are they about in general?
2. What online casino platform to choose?
3. How to do licensing and setting up a company?
4. What kind of team do you have?
5. What budget must you allocate to start an online casino?

These are the biggest questions that arise in connection with a determination to start an online casino. First of all, I must say that the online casino business is still a business of newcomers. Despite the recent developments [with more regulated markets coming in where newcomers are not welcome], on the whole the global online casino market is “young” and dominated by venture capitalists that want to have a greater than average return on their investments. It means that there is a great demand for solutions for “not-clients”, i.e. solutions that help to make an easy start.  

What we commence with is discussing the two principal roads that a business owner may take when setting up an online casino:

• Go for a White label casino solution or
• Acquire a Turn-key casino 

Likewise, the things that I discuss here -- White label casino (WLC) and a Turnkey casino (TKC) -- both are ready made solutions referred to as Casino Platform. Let’s discuss what’s actually included in every casino platform or a solution? Likewise, if you search Google for such terms like online casino platforms / solution providers, white label online casino, turnkey online casino providers, etc you will find yourself in a company of 20-30 enterprises that call themselves platforms. So, what is actually a platform? What do they do? 

What is an online casino platform?

Online Casino Platform is a Software as service (SaaS) that’s licensed to a user and means that at the end of the day you will have a number of modules that refer to different activities of online casino operations, which you can have separately or all together in one box. 

In the old days, if you wanted to start a casino, you must hire developers, have them build back-end and fron-end, integrate each game content provider separately and also build gateways to each single payment provider. So, it will normally take 9-12 months to be done and a team of 12-15 people (for a smaller scale production). Apart from requiring a considerable amount of investments, it would require understanding of the development process on the part of the business owner. 

Now, the whole thing has been already built and is now supplied as an out of the box solution which can be licensed for use (or, simply, rented) in the form of Software as a service (SaaS) in exchange for paying a Royalty fee. It makes life much easier. So, every platform, be it White Label Casino or a Turn-key casino solution, involves the core services that relate to Casino operations, the first of which is the very Casino Core. 

Casino Core includes: 

• Player Account Management (called PAM or, often, also referred to as CRM),
• Anti-Fraud
• Game Management and Games’ Representation
• Online casino site’s Front-End
• Wallet
• Business Intelligence (BI)
• Content Management System (CMS)

Regarding the fourth principal core, it is a Casino Affiliate Marketing Management. Most of the time, platforms would integrate one of the well-known 3rd party affiliate management software for you to use. Once you subscribe to the platform you are given access to this Affiliate Marketing solution for you in order to attract traffic and get it turned into casino players. 

AS WE’VE DISCUSSED, in simplest terms, every platform, be it white label, turnkey or on-demand, etc includes a group of modules THAT WOULD respond to the Key or Core objectives of your business:

1. Casino-related modules
2. Games-related modules
3. Bonuses-related ones and 
4. Affiliate Marketing related modules

 The most important of them are: PAM, CMS, BI, Front-End and Bonus-related modules.

These are the elements that make up the substance of the solution you acquire to start off your own online casino. Now, what are the principal points of difference and advantages (risks) of WLS as compared to the Turn-key casino?

What is the difference by White label casino and a Turnkey casino? 

The principal difference between them is that White label casino not only includes the code and the necessary Modules, but also: 

• A Company,
• A Licence,
• Agreements with Game Content Providers as well as
• Merchant Accounts. 

Therefore, you just “unbox” this offer and go attract potential players. Obviously, it comes for a fee, but it’s a good way to start.

Let’s say it again: the white label casino is a solution when your business 

1. operates under a master licence of a platform company, 
2. use their company name and payment requisites, 
3. their merchant accounts to process deposits and withdrawals as well as 
4. the provider company’s agreements with casino games’ providers.  

It means that white label casino is when you run a business by using someone else's business entity that has already got all set in terms of licence, legal issues as well as ongoing agreements. 

The Turn-key solution, by contrast, requires that you have a company already established, that you apply by yourself to get a licence that you need, and you make all the contracts with payment providers by yourself. Also, you may integrate with game providers individually or rather have them from an aggregated pool. The principal difference is with White label casinos that with the former you don’t have to acquire a licence and may operate under a master licence of the platform provider, and in the case with a Turn-key casino, you have to do this yourself. 

Let’s say it again: likewise, the turnkey casino is a licence (a right) to use casino platform’s software whereas you have to start a company, obtain an online casino licence as well as set-up a merchant account with payment providers by yourself. You may apply for legal support with the platform but ultimately you will run a business under your own legal entity. So, what you get with a turnkey casino is a software, i.e. a number of modules to onboard players and enabling them afterwards.

What is the practical difference in operating under a sub-license and going for a stand-alone licence? Except for money consideration (sub-lince that comes as a part of a package is much more expensive at the end of the day), there are several risks that you must not overlook.

Risks of using a White Label Casino

1. Risk of bakrupcy of a white label provider
2. Risk that a licence might be revoked.
3. Risk of fialure of marchant accounts.  

First, an obvious risk of bankruptcy on the part of the platform provider. When you have a “white label” from a casino platform you operate under her licence, her company, her already established contracts with game providers as well as through her merchant accounts. In a way, you don’t even exist as a separate business... Your operations are disguised inside the “dossier” of operations of the licence holder company. In case something happens with your platform provident, it means that you are down also.

Second, there is a risk that the platform provider’s licence might be revoked for reasons of misconduct, etc. For example, if by misconduct of another licensee, the licence is revoked from the platform provider, you are at a clear risk of losing an ability to normally operate a business, etc.     

Third, there’s a risk of failure of operations of merchant account(s). If something happens between Visa, etc and the platform itself, it may result in a stop of processing certain payment methods (at least for a while). In this case, you are affected even though you are not a part of the problem yourself..

So, it means that either you are independent, or you are under the umbrella of the bigger one and obviously share some risks too.

Advantages of White Label Casino as Compared to the Turn-key solutions

1. Faster Time to Money
2. Cost saving on web design and front-end development
3. Reliance on already existing integration of games and payment providers 
4. Costs savings on IT infrastructure

Likewise, you pay a certain amount upfront (I will cover it in greater details later on), but you get to money, presumably, faster if you don’t waste your time. It means you don’t have to hassle with development as you might have had before, you may have everything provided in a single pack, you don’t have to wait for decision of a licensing body and spend about 12 to 15 weeks to get your licence ready, you don’t have to set-up a company and incur a legal fees and so on. So, these are all the implications of faster time to money. 

Another thing is that WLC has a minimal requirement for development on your part. If you are an investor and you want to start a casino to only make money and you don’t have much expertise with managing developers yourself, it’s a good way to start because you neither employ and manage developers, nor spend money on it. Likewise, you may choose yours from a library of ready templates or, if you like, have the platform provider make a unique design for you (for a fee).   

The third point is you rely on the existing integrations of the white label provider. It means you don't have to build business relations from zero. You’ll have all the integration in place: every game provider that’s on the portfolio of the platform provider is yours too. So, you don’t need additional people or time to build these integrations ,etc. 

And also, you will obviously have some cost savings on the IT infrastructure because everything is hosted and maintained by the platform provider in the location where they have been licensed.  

These four arguments in favour of WLC may lead to a thought that it’s practically a good solution if you are just starting up and you don’t have much time, money and expertise in web development. So, let’s move closer to licences then. What licences are about? Why, in the end, are WLC popular and ubiquitous now? And does it have to do with aspects of licensing too? Because actually licences are a very important part of business now. Apart from allocating time and money to getting them, there are certain things that you simply must distinguish. So, let’s probably start from a silly question: Why actually you might need a licence to run an online casino?

What is a licence for an online casino? Why do you actually need it?

Apart from all the talk that you can find on the Internet, a licence is important due to two things.

1. Online Casino licence enables you to have a merchant account with payment providers.
2. Casino licence allows you to get online casino games providers onboard your casino.  

So, a licence is a way to have a merchant account. You can never have a merchant account with Neteller, Skrill, Visa and any other reputable payment solution if you don’t have a licence for running a casino business. Simply put, you can’t use payment methods like these (except for crypto) if you are unable to demonstrate your licence. 

The second idea is that in order to be able to sign contracts with game providers (since you’d obviously want to have games in your online casino), you must have a licence.

What kind of licences are there?

What is the landscape of available online casino licences on the global scale? Despite being obviously a topic of whole another discussion, most of the time when you start an online casino you would choose between the Curacao licence and Malta licence (Malta Gambling Commission or MGA). For the sake of interest I would recommend adding to your consideration an Isle of Man licence, a territory that belongs to Great Britain and lies in the Irish Sea between England and Ireland. Yet, the biggest ones are Curacao and Malta.

The whole idea of licensing of online casino activities probably started with the Isle of Man licence in 2001, so it’s more than 20 years ago already. And the idea was simple: to be able to audit the fairness of game providers and soundness of the online casino software. Likewise, if you have at least some licence, it means that some regulator body would monitor:

• How does your casino IT infrastructure work? 
• What kind of games do you supply for your players? and 
• Do these games have a certificate for being dependent on the Random Number Generator (RNG) engine?

This is practically all. After that the licences have become more complicated but the core of their activity stays the same. What has been added ever since is Dispute Resolution option and Anti-money laundering clauses, etc. So what is important for now?

In order to address issues of 1) Whether or not you want to go go for WLC or TKC and/or 2) What licence for you online casino you might need specifically you may want to answer yourself to four principal questions as follows:

1. Cost of licence itself
2. Taxation of the country of licence and overall cost of doing business there
3. Easiness of application and registration
4. Regulatory Scrutiny and Compliance within a country of licence.

Importantly, the licence comes first, the company comes second. If you decide to apply for a Curacao casino licence you will need to incorporate a company there and also host the IT infrastructure (including players data) there. Not the vice versa. So, setting a company goes after you decide where to apply for a licence. 

What about the cost of a licence?

The overall idea of deciding what licence for an online casino to choose boils down to 2 blocks of questions:

1. Cost of licence and running a business
2. What you can do with a licence.

Every licence has its geo-limitations, so it is not universal. No matter what licence you’d have, you can’t lawfully accept traffic from everywhere: some countries will restrict online gambling on their territories, like, for example, France, Afghanistan, Australia, certain U.S. states, etc. And they would only allow state owned enterprises run lotteries or collect sport bets, or allow land based casinos only. Some countries all over Europe would allow online casino gambling but only with the casino operators that have received a national licence, not that of Curacao or Malta. 

So, the rules of the games change all the time but on the general plan, if you plan to target the European (EU) players, you may want to go for an MGA licence. By contrast, if you want to target the Rest of the World (RoW) countries, you select the Curacao one. 

You may obviously target the EU players with a casino under the Curacao licence but with a certain implications: when a country that expressly prohibit offshore gambling without a national licence, like the Netherlands, will cover you up and, make a ruling against your company and establish a jurisdiction of their authority upon your case, you will have a heavy fine that’s hard to evade (once a jurisdiction has been established).

For example, owners of Curacao license do not generally accept users from the United States of America and its territories, United Kingdom, France and its territories, Netherlands and its territories (and countries that form the Kingdom of Netherlands, including Bonaire, Sint Eustatius, Saba, Aruba, Curaçao and Sint Maarten), Belize, Costa Rica, Cyprus, Antigua & Barbuda, Comoros, Liechtenstein, Iceland, Isle of Man, Malta, Mauritius, Denmark, Georgia, Poland, Switzerland, United Arab Emirates, New Zealand, Spain and Uruguay. Likewise, the Curacao license does not expressly prohibit to target players from Australia: one good example is https://www.rickycasino.com/en-AU/ that is SOFTSWISS white label casino with a Curacao license, which targets AU.

Some countries give you fines, some countries will physically restrict access to your property from their respective territories. Anyway, if you start up a new casino it’s necessary to settle for a licence or acquire it as a part of the deal with the white label provider.

Let’s make a quick comparison between licences in terms of option and costs of company incorporation implications… Likewise, every licence may have:

1. Application fee (not returnable)
2. Yearly licence fee
3. Audits fee
4. Compliance duty

Curacao online casino licence cost

1. Application fee (not returnable): €2’500
2. Licence fee: €10’000
3. Audits fee: NO
4. Compliance duty: NO

TOTAL: €12’500.

Curacao taxes applicable to online casino gambling business

1. 2% tax of net gains
2. NO VAT
3. NO capital requirements of a company

Cost of setting up a company, other legal: €1’500 - €2’500.

TOTAL COSTS TO START: €15’000

Malta online casino licence cost

1. Application fee (not returnable): €5’000
2. Licence fee: €25’000
3. Audits fee: Ad hoc
4. Compliance duty: 1.25% of GGR, €15’000 Minimum 

TOTAL: €30’000.

Malta taxes applicable to online casino gambling business

1. 5% final corporate tax for a Holding Company
2. 18% VAT rate
3. €100’000 paid share capital requirements of a company

Cost of setting up a company, other legal: €2’500 - €4’000.

TOTAL COSTS TO START: €34’000 (plus €100,000 of paid share capital). 

Isle of Man online casino licence cost

1. Application fee (not returnable): £5’000
2. Licence fee: £35’000
3. Audits fee: NO
4. 0.1% to 1.5% on gross gaming yield (based on profit, not turnover)

TOTAL: £40’000.

Isle of Man taxes applicable to online casino gambling business

1. 0% corporate tax 
2. 20% VAT rate
3. €1 paid share capital requirements of a company

Cost of setting up a company, other legal: €2’175

TOTAL COSTS TO START: €42’175 (plus €100,000 of paid share capital).

So, the Curacao online gambling licence and the cost of running is the cheapest one. Malta is more than twice as expensive to start an online casino business in, but you must allocate (pay) €100,000 as a share capital for an online casino company, which, however, will be distributed back to shareholders when the company is closed down. Isle of Man online casino will cost you 40% more than that of Malta to start-off with, but there’s no corporate tax whatsoever for offshore companies.  

As regards the ease of application and registration, Curacao takes the lead here also. The Isle of Man is also very competitive, whereas Malta can be the most bureaucratic and time consuming. So, overall, you must allow 12 weeks to finalise this process. Scrutiny and compliance procedures look mild (at least so far) in Curacao, whereas Malta is reported to also be quite relaxed in terms of anti-money laundering issues and overall regulatory oversight. Obviously, the Isle of Man is the most demanding jurisdiction from the list. 

Now that we have discussed the costs and application easiness with 3 popular online casino licence destinations, let’s turn our eyes to what you can do with these licences. 

Comparison of Curacao, Malta and the Isle of Man online casino licences in terms of geo-targeting options 

So, actually, the Isle of Man is by far the best destination thereto, in terms of that you can target virtually every geography on earth, you can even target the United Kingdom. What’s left for you to check is if a specific country does not prohibit gambling and has the power to actually prosecute you over violation of its internal rules (like the United States or the Netherlands). 

In case the Malta licence is more or less the same, the only principal difference is that the Malta Gambling Authority (MGA) already has a list of blacklisted countries (where gambling is not allowed for the holders of the MGA licence). In other words, the Malta licence provider expressly prohibits you to go hunting players in certain jurisdictions, otherwise, you may be fined. Whereas the Isle of Man licence doesn't expressly geo-restrain you, that’s your thing, and your (as a company) relations with respective national enforcement bodies. Curacao licensing bodies also have such a list, but it's rather small and the ball is on your side: you still have to make sure that you comply and don;t break the law on a case by case basis. 

In fact, this also has to do with licences that a casino game providers have: if you - as a casino operator - don’t block a player form a specific geo, the game vendor may do it their side. So, effectively, a player may not be able to play a game by a specific provider too…. It means there are actually 2 check-points: first on a casino operator side (you, a respective licence holder) and the second is on the game vendor side. 

Effectively, in either case, be it white label casino solution or a turnkey casino, you may want to select your licence provider, and make a choice, presumably, between Curacao, Malta and the Isle of Man. 

An Online Casino Team: minimum requirements

Now, let’s talk about team requirements: what kind of team you might need to start an online casino? I have a special report and a video on setting up the marketing function in an online casino, but in terms of the first part of the team to start with, you have to hire a Director, CRM / PAM specialist (a person who will analyse players behaviour and trey to activate / reactivate them) and also Anti-Fraud specialist who will analyse the possible fraud suggestion of the casino platform itself and decide whether or not to flag players. So, three roles are minimum to hire in order to start operations: Director, CRM manager and Anti-Fraud specialist. 

An Online Casino Sign-up Budget Simulations

Let’s go down to the budget now. If you decide between a White label and the Turnkey casino, you must understand that in either case you will have a Sign-up budget, i.e. money you’d pay upfront before you go into operations. In the case of WLC, the sign-up budget may range from €15’000 - €20’000 to €50’ 000 depending on the licence that you want to have. Likewise, it may be close to €15 '000 - €20' 000 in the case of Curacao licence and closer to €50 '000 in case of Malta or the Isle of Man. So, these are amounts of a sign-up that you will allocate as a downpayment in order to start with a casino platform provider, but also you must pay a monthly royalty fee for the exploitation of the casino platform. 

The royalty fee is actually a painful thing because you’d give away a portion of your money yield in exchange for the options and abilities a platform provides. In the case of WLC, it probably will amount to around 20% of your Gross Gaming Revenue or Yield (GGR / GGY). So, if you earn €100 from your operation, it means that before you even think about any other expenses, you will have to give away €20, in some cases, up to €25 of your earnings to a platform provider. In case your White label solution consists not only of online casino modules, but also, for example, sportsbook, be sure to pay closer to 25% of your GGR. Where only a casino is concerned, the actual amount will depend on the configuration of modules that you’d require, but in any case, it is expensive. 

So, you have to pay €15’ 000-€50’ 000 upfront fee and 20-25% of your Sales (GGR) in royalty fees in case of White Label. Where you’d choose a Turnkey company and use your already established company, etc your upfront fee is lower: for example, the set-up cost is €5’000-€10' 000 and the royalty fee is going to be closer to 18-20% of GGR. 

Obviously, the difference between WLC and the Turnkey casino is in the amount of set-up fee, which is considerably lower in the latter case: minimum of €15’000 as compared to a minimum of €5’000, and also in the percentage of your GGR that’s paid as a royalty fee: up to 25% in case of WLC and closer to 18-20% with a Turnkey solution. 

Finally, let’s revoke the cost of getting a licence and setting up a company, for example, in Curacao. If you go to Curacao, you must plan for €15 '000 of expenses altogether and it will take some time too: from 8 to 12 weeks to start off. But you have a whole company of your own and you can build from here. 

Conclusion

So, this is actually what it takes to find out how to start an online casino using a casino platform provider's services. What we have discussed is that there are two principal options: White Label Solution or a Turnkey casino solution. In either of these cases, you’d use a Software as Service, i.e. rent the platform that consists of core modules that will enable you to run an online casino. In exchange for using this software you’d pay a royalty fee that’s calculated as a percentage of your Sales, Turnover -or- GGR (all the terms mean the same here). 

So, you’ll pay from 18% to 25% of your Sales as a royalty fee for using this platform. In most of the cases, the White Label casino options goes out of the box, i.e. prepacked with options and the actual assortment thereof is not negotiable. In the case of Turnkey casinos you are given more freedom in choosing options by all means. 

White label solutions might be good for those who treasure Time to Money, so if you have doubts that it’s worthwhile to wait 2-3 months (and even more if somethings goes wrong), and also if you don’t want to mess with legal things and set-up your own company and just want to try the water, so in this case, may be, White Label Solution is great for you. If it goes fine, the next year you may nicely take your time and apply for a licence, start your company and just switch from White Label solution to, for example, the Turnkey one. 

Likewise, the White label is a common and normal way to go: you can have quite a decent selection of platforms that offer great services too. In either case, you may want to decide which licence you’d have: choose from Curacao, Malta and the Isle of Man. We have discussed some strong and weak points of each of them, starting from the cost of licence, cost of doing business and cost of incorporating a company in these jurisdictions, and also the options that each licence would actually provide, in terms of what kind of geos you will be able to target, etc. So, once you have decided on what it’s going to be a White label or a Turnkey, what licence you will have, you then must think of making a small team to start a casino. The team may consist of a Director, CRM manager as well as Anti-Fraud responsible. After that, you go to have a full fledged marketing team. Also, I predicted a budget for starting an online casino: it’s €15’ 000 to €50’ 000 as a sign-up fee paid upfront plus 20% to 25% of your GGR as a royalty fee. In case of a less expensive Turnkey casino solution it can be €5,000 of upfront fee + 18% GGR as a royalty payment.