“When would an online gambling website become profitable?” is a typical question for many beginners of the online gambling business. It is important to say that all depends on many circumstances. Anyway, a good marketing strategy is the best way to success.
Online poker rooms and online casinos make money differently, for that reason the expected return on investment terms should be calculated by different methods.
Casino ROI Estimations
Online casinos make money on gamblers losses. Since a gambler plays against the house, a casino keeps the money they lost. The scheme of casino money making is as simple as that.
The more players gamble in your casino the higher is your profit. As mentioned above, correct marketing strategy is a key to success. Internet traffic attraction is the point of prior importance when starting a new online casino. One should always remember that to make money it is important to firstly spend money. When starting your own online casino business you should consider that an adequate online marketing campaign will require approximately $300,000-400,000. If you have chosen a correct marketing direction you can expect the return on investment in about 6 months. Anyway, much depends on luck, occasion and deep knowledge of online gamblers motivation. If you are lucky and wise enough, you can return your investment in very short terms. It is important to know that some online gambling operators spent over 1 million USD per year for marketing and advertising, though earning over 1 million USD in profits.
Poker Room ROI Estimations
Poker rooms generate revenue by 3 main ways:
- Rake collecting from every game pot. In most cases rake percent does not exceed 3-5%. In any case rake structure can be different in various poker rooms.
- Charging a monthly membership. This money is converted into a definite amount of virtual chips which is renewed every month in case the entry fee is paid.
- Collecting entry fee for pre-scheduled multi-table tournaments.
Research shows that the average player plays 40-70 hands per hour. Rake amount ranges usually ranges from $1 to $3 per pot. Usually the amount depends on the number of players at a table, game limits and game variant. It means that in case you have only 20 simultaneous players during one hour every day, you will make your income from over one thousand pots played by only those players.
The main concern you should have is attracting players to your poker room. Not always aggressive advertising is demanded. You can adjust your marketing strategy to your needs and budget. In case you bring 100 players to your poker room the average profit for every player will be around $50, which means earning 5 thousand USD for the first months of your poker room functioning. If we keep in mind that the average retention ratio is 75% for every new member, by the end of the fourth month of your poker room receiving wagers your profits might be as large as 13,000 USD per month.