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Profit Margins of Online Casinos: Key Performance Indicators and Effective Marketing Techniques

Updated 29.04.2020

Online casino’s profit margin increases daily, so various gambling projects are rightfully considered one of the most profitable and promising types of activity. And yet, the organisation of the gambling business is not such simple as it might seem at first glance.

For being able to do this, you need certain knowledge. Specialists of the Smart Money company are ready to offer the best ways to develop a gaming site. Moreover, they provide a full set of tools that allow operators not only to earn good money but also to compete successfully with many projects that have already gained the worldwide fame.

Online Casino’s Profit Margin: Research and Statistics

The research group of H2 Gambling Capital has shown statistics on the increase of profit margins of virtual casino platforms. Unlike land-based locations, online gambling establishments have started to generate revenues since 2010 from 6.24 billion dollars. Last year, the online casino’s profit margin was already 18 billion dollars.

Nevertheless, despite impressive growth data, experts of the Slotegrator company are sure that gambling on the Internet will never reach the status and the level of profit margins of land-based casinos.

The reasons for this paradox:

  • The growth of the casino industry market depends on the development of IT technologies, while land-based locations become rich and expand with the help of new territories and huge zones (Macau, Singapore). Over the past ten years, the profit from Asian casinos has grown almost by 8 times. The total income is 56.6 billion dollars.
  • The size of bets. Regardless of the game offers on online platforms, the size of the turnover is always bigger than in offline gambling establishments.
  • The age of the audience. If there are mostly young people among those who try their luck in online casinos, the decision to go to a land-based casino is a way to emphasise the social status. Most of the visitors to offline locations are wealthy people with the regular income.

The Profitability of Online Casinos: Performance Indicators of the Gambling Business Model

Huge profitability of online casinos

Any entrepreneurial activity is impossible without a set of special metrics that shows the effectiveness of the work and allow you to calculate opportunities for the further development of your business.

These metrics are called KPI — Key Performance Indicators. The parameters are applied to any business activity and visualise the level of profitability of the enterprise.

Gross profit margins of online casinos

Gross Gaming Revenue is the basic indicator in the gambling industry. The medium income of an online casino is calculated according to the following scheme: the number of accepted bets minus payouts to winners. The marker generates the amount of income of the virtual site from the actions of the visitors until the moment of paying off expenses. It is an indicator of the total revenue of the gambling establishment.

The net profit of an online casino

Net Gaming Revenue is the total profit of an online casino after it pays all operating expenses and royalties.

Operating expenses include:

  • bonus coins provided by the gambling establishment;
  • commission fees for payment systems;
  • payments to providers;
  • payments to partners;
  • license fees;
  • tax liabilities, and so on.

The indicator of the net profit of online casinos is an optimal tool for preliminary analysis of the overall effectiveness of the project.

The net profit of online casinos in relation to deposits

The correlation of the marker to the number of deposits shows how much income do online casinos make each month from investments and game deposits. The parameter also shows the capital turnover.

How much does it cost to attract visitors

Cost per Acquisition is a hybrid marker that shows the total sum of expenses of a website to attract one user who has registered and placed a bet. For example, 5000 dollars was spent on the expansion of the audience, and the program has attracted 100 new customers. The cost of the expansion of the audience was 50 dollars for one player.

Online casino’s profit margin from one gambler

Average Revenue per User shows the profit that a casino gets from one visitor who has been on the website for a certain period of time. The calculation formula is the following: profit of an online casino for the covered period divided by the total number of guests who are gambling actively.

The lifetime customer value

Lifetime Value shows the net profit of an online casino from one user during his entire history on the website. The main task of marketing campaigns is to increase this particular indicator. The work is aimed at achieving high lifetime customer values and it is conducted in two directions — the level increase of the player's loyalty (the increase of the probability of his return to the gambling establishment) and the achievements of the maximum average check (the amount of revenues that is brought by a user for one game session).

How to Raise the Profitability of Online Casinos: Tracking and Analysing Indicators

The task of qualified marketers is to interpret all indicators that are mentioned above. But the process of tracking, collecting, and visualising data is a direct function of online casino platforms. The system provides the constant reception of data, transforms the information into an understandable summary that is accessible via the software interface.

You can order an online casino platform and a package of services for the maintenance and promotion of the project from Smart Money. This company will help you to operate the real-time data and get the most accurate information on the income that will be earned.

Marketing Tools for the Promotion of an Online Casino

Marketing services are a large-scale sphere of action, which aim is to manage advertising products, increase traffic, improve performance indicators of the project, monetise virtual sites, and increase sales.

The main stages of the promotion of the gambling establishment

  • The promotion of the website on the Internet. Links in social networks are a popular tool that has repeatedly proven its effectiveness. The publication of news, promotional offers, and other information allow you to attract the attention of the audience very quickly and make the brand recognisable.
  • SEO-optimisation. All actions here are aimed at bringing the project to the top 10 of requests in search engines.
  • SEO-promotion is:
  1. Internal setup of the resource (the development of a map, the integration of keys, the adaptation of content).
  2. Interaction with third-party websites (links from external sources that provide the transfer to the promoted website).
  3. Maintenance of the result and regular improvement of the achieved indicators.
  • Email marketing. It is not expensive but an effective tool. It should not be misunderstood to be a spam since the mailout is sent only to an interested audience that has agreed to receive news.
  • CRM-systems. A multilevel structure of relationships with users that is aimed at improving the quality of operations and simplifying the management of the platform. The tool is used for the ranging of marketing elements and services (for example, the organisation of mailouts and promos, the monitoring of sales, the increase of the efficiency of the operation).
  • Affiliate marketing. Affiliate programs are a convenient way to increase the profit margins of online casinos significantly and in the shortest possible time.
  • Loyalty programs. These are tools that help to keep customers on the resource and make them want to come back over and over again. They should include promos and bonuses available to each registered customer who made the deposit.

One of the most significant opportunities to increase the profit of online casinos is the regular update of the content and the range of games. Despite the presence of a special set of popular solutions for each virtual gaming site, the more is the range of the offered entertainment, the wider is the audience, and the higher is the possible profit of the online gambling establishment.

In an ideal scenario, casinos should have slots from well-known providers and the fresh content with unusual storylines.

How to Increase the Online Casino’s Profit Margin With the Smart Money Company

Increase your profits with Smart Money

Specialists of Smart Money are ready to offer you a full range of marketing tools and advertising solutions for the promotion and development of online casinos and land-based gambling establishments.

Smart Money has 15 years of working experience in the market of the casino industry, round-the-clock technical support, the guaranteed security, and a wide selection of products. The company also offers fully equipped gambling platforms with a full range of functions, the ability to rent or purchase licensed software and hardware for the land-based locations, services for the integration of the software, and the development of the exclusive game content on the basis of unique sketches.

Hans Adrian

Hans Adrian

B2b Gambling Business Advisor & Strategist

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