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How to Establish a Profitable White Label Casino Business with Smart Money

2021/06/14

Today, we are going to tell you about an excellent way to quickly launch a successful gambling project with a relatively low budget. Operators get access to prestigious licensed markets and modern solutions from the best software vendors.

White Label casino business in 2021

Order the White Label casino from Smart Money! We offer no commissions, lump-sum fees or additional expenses — just an honest and prosperous business with excellent growth prospects.

What Is a White Label Scheme: The History of the Project

Such a concept appeared in the early 1990s in the music business:

  • Major labels sent copies of new soundtracks to famous DJs before the official release of the compositions. This was done for advertising purposes, in order to spark the public’s interest and assess the revenues from future sales.
  • Vinyl records that producers sent to the musicians were painted white, which is why they were called “White Label”.

A little later, manufacturers of consumer goods successfully applied the White Label concept to sales. They produced a certain category of products (electronics, food, construction materials) and transferred it to subsidiaries who sold them under their brands.

In the early 2000s, the American operator, Casino Share, funded several White Label subsidiaries with cutting-edge slot machines from Microgaming.

Benefits of Buying White Label Solutions in 2021

Today, cooperation under the White Label scheme is considered a popular way to establish an iGaming business. More and more operators are purchasing such programs from parent companies, noting the high level of security and quality of the solution.

According to this agreement, the parent brand provides the subsidiary with a gambling platform and a wide range of entertainment, financial modules, and CRM system. The task of entrepreneurs is to create a design and promote their companies, making them recognisable and popular.

Among the strengths of the White Label program, we can name:

Low barrier of entry into the market

The creation of an online casino is contingent on solid investment (operators will need 50–60 thousand dollars).

The decision to start an iGaming project under a White Label agreement allows you to minimise costs. The price of this solution varies between 5–15 thousand dollars

Possession of a licence

The main argument for the White Label scheme is that entrepreneurs receive a gambling platform with a permit issued by a prestigious jurisdiction. As a rule, subsidiary brands operate under a sublicence that was earlier obtained by the parent company.

The possession of a licence significantly reduces the time for launching a gaming site and cuts the budget

Modern casino software

The world’s best providers of gambling entertainment often do not want to work with beginning operators but they willingly cooperate with reliable companies

For an entrepreneur, this is a good opportunity to connect in-demand content from Microgaming, NetEnt, Amatic, and other developers who have gained the confidence of users

Jackpot payout guarantees

One of the reasons why businessmen do not dare to independently enter the gambling market is the insufficient financial guarantee for paying jackpots.

This problem is solved by choosing the White Label scheme. The parent company pays all big prizes, partially relieving casino operators of their responsibility

Nuances of Cooperation under the White Label Agreement

White Label agreement: nuances of cooperation

The average cost of the program is 5–15 thousand dollars. This sum may vary (much depends on the platform configuration, the prestige of a parent company, and the agreement terms).

By purchasing the White Label solution, operators receive the following components:

  1. The licence of a prestigious jurisdiction. Entrepreneurs will work under a B2B permit, and the parent company will be responsible for such aspects as the prolongation of the document or payment of licence fees.
  2. Gambling platform. Powerful backend with a large selection of in-game and administrative settings. Businessmen will get the best software in the industry. The ready-made program guarantees a seamless operation of the iGaming platform even during critical loads on its IT infrastructure.
  3. Catalogue of video games. It includes popular slots, lotteries, bingo, live games, and mobile solutions from such trusted software vendors as Endorphina, Tom Horn, Quickspin, Gaminator, and other developers.
  4. Payment service. Multicurrency financial aggregators are integrated into the White Label project. These are Visa and MasterCard popular international systems, as well as current local products: Paycos, Finstrum, and Paytm. It is also possible to connect services to support transactions in digital currency.

The parent company provides all technical support for gamblers, including legal advice. The requests of users are automatically redirected to the franchisor's call centre, saving operators from the costs related to the maintenance of staff.

Operating Expenses of a Subsidiary

As a rule, the franchisee transfers to the parent company 30–40% of the GGR (gross gaming revenue) every month. This parameter is calculated as the sum of all bets placed by gamblers minus the money that they won. The White Label agreement specifies the threshold value of winnings: large sums are paid by the franchisor and small amounts — by the casino operator.

From the received income, entrepreneurs should:

  • pay commissions to the providers of payment systems;
  • redirect part of the funds to the promotional marketing of their iGaming platforms.

The remaining money is called the net profit (NGR). From this amount of money, casino owners pay income tax (as a rule, 2–20%, depending on the jurisdiction in which the parent company obtained a B2B licence).

Features of Choosing a White Label Project in 2021

As it turned out, at the beginning of the year, more than 4 thousand operators were working in the gambling industry under a White Label agreement. Therefore, in order to create a successful casino website, entrepreneurs need to pay attention to competitive and viable projects.

Searching for the Optimal Business Area

The lion's share of businessmen is thinking of buying online casinos and bookmaker projects. This choice is quite logical, given that 74% of the total iGaming market capitalisation is accounted for by these 2 areas.

The profit of gaming sites is 24% of the total income of the gambling sector, and the profit of betting projects is 48%.

By choosing the main business area, White Label operators can improve their portfolios by purchasing the following products:

  • lottery drawings,
  • bingo;
  • keno;
  • live games;
  • eSports bets;
  • fantasy sports betting.

Thus, bookmaker’s bets perfectly interact with cyber and fantasy sports. Online casino operators can also connect lottery and bingo software or integrate a betting line into their gaming sites.

Selection of Promising Sales Markets

It is difficult for beginning entrepreneurs to compete with experienced gambling companies in several countries at once. It is much easier and more effective to choose one or two sales markets, and then gradually solidify your presence in the international iGaming space.

The best regions for White Label casinos in 2021:

  1. Southeast Asia. Locals love games with live dealers, so businessmen should focus on the development of live casinos. The range of products here is standard: Dragon Tiger, Sic Bo, baccarat, blackjack, and several types of roulette. It is also possible to add side bets on the outcomes, which will help you to build internet traffic.
  2. Northern Europe. Players with high lifetime customer value (LTV) mostly live in Sweden, Norway, and Finland. Those operators who were able to attract the target audience will make good profits for many years. Moreover, the region has a loyal attitude towards online gambling. Users can visit gaming sites with a .com domain address.

How to Increase the Level of Profitability of White Label Casinos

White Label casino profitability: how to increase

The profitability of iGaming projects is affected by many factors: from seasonal fluctuations in the gambling market to the volume of targeted internet traffic attracted in a particular month.

Let us take a look at the operating costs that can be reduced to make your project more profitable:

  1. Income tax. The main fiscal burden consists of income tax. The best way to reduce the tax burden is to choose a jurisdiction with low tax rates. For example, in such offshore zones as Malta and Curacao, operators pay only 2–5% of their profit.
  2. Commission to the providers of payment systems. Entrepreneurs can make users cover this type of expenses. An excellent solution is to make an agreement on preferential cooperation conditions with an aggregator or become a B2B distributor of payment products.
  3. Marketing costs. Interaction with affiliated companies significantly reduces the advertising costs of casino owners. The fact is that operators pay only for the final and measurable result — the attracted traffic — and bypasses the additional costs of SMM and SEO promotion.

The Main Things about the Launch of an Online Casino in 2021

Order a successful gambling project from Smart Money! We offer a powerful platform, a catalogue of modern video slots, and multi-currency financial tools.

The Smart Money company operates in the world’s leading jurisdictions and provides the best cooperation conditions.

  • The White Label scheme can boast of a low barrier of entry into the iGaming market, a prestigious licence, and access to modern games and software.
  • The obligations of the parties to this type of agreement are clearly regulated. The provider supplies a ready-made gambling platform along with a permit and is also responsible for accounting, as well as technical and legal support. The task of operators is to create and promote their brands, attracting the target audience.
  • To start a White Label casino in 2021, entrepreneurs need to determine the prospects for development and sales markets and stick to a plan of reducing operating costs.

If you are interested in launching a gambling project under the White Label scheme, just contact our managers and get a free demo version of the product!

Hans Adrian

B2b Gambling Business Advisor & Strategist

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