Many people considering starting a business this year could be tempted to launch a new online casino, with the gambling industry continuing to expand.
Globally, the gambling and iGaming market is said to be worth around $500 billion a year now, with this number expected to keep growing in the coming years.
However, like a lot of industries, the gambling sector faces extreme challenges in 2020. A lot of brick-and-mortar casinos, for example, have their futures in doubt due to the coronavirus crisis.
As a result, playing at online casinos has become more common. With this trend unlikely to lose momentum, starting a new online casino might just prove to be a smart move.
But this is not something possible to do on the cheap. Indeed, some estimates claim it can cost in excess of $1 million to start a new online casino from scratch. So what are the options you need to consider to raise some funds so you can go into this business?
Crowdfunding
Over the last few years, crowdfunding has become one of the top ways to raise money through the internet. The public has shown a willingness to contribute to elite business ideas.
Sites such as Kickstarter have had a high number of success stories recently, with all types of products and businesses raising large amounts of money through the site.
Kickstarter is not the only major crowdfunding website out there either, with plenty of choices available for anyone considering going down this road to fund starting a new online casino.
However, it is arguable that an online casino might not be a good fit for crowdfunding. After all, members of the public do not seem likely to donate cash for a site where they might ultimately end up losing more money than they can win.
Without a truly unique selling point, an online casino Crowdfunder feels unlikely to be a winner.
Find an investor
Perhaps the most obvious option when trying to fund a business is to find an investor. Someone with a proven track record of involvement in the gambling world could prove to be a major asset.
First, though, you will need to come up with a viable business plan. As Angie Harper from Flashcasino says: “Make sure to understand the ins and outs of the iGaming industry and have a clear plan on how you are going to achieve goals and what you need to achieve this.”
Without these building blocks in place, it is highly unlikely you will be able to convince an investor to sign a check and get on board with your new online casino business. Investors can also include banks, but they may be unwilling to loan money for a venture like an online casino.
The gambling sector is a proven market that makes a lot of money. What this means is that the industry can be a very appealing move for investors who do not mind taking on a bit of risk. The flip side is that nowadays there is a huge amount of competition in the online casino world too.
New sites are being launched on a regular basis and all the top gambling companies in the world have either moved into the sector already or are in the process of doing so in the near future.
Seed capital
Similar to finding an investor, seed capital can be a good option for starting a new online casino.
Seed capital is defined as the money that has been raised in order for an entrepreneur to be able to begin the development of an idea for a business or product.
In the business world, acquiring seed financing is seen as a stepping stone for new businesses to go through so that they can approach venture capitalists to receive additional financing.
Seed capital often comes from people close to the founders of a new company. This could be friends, family, acquaintances or business contacts. In exchange for seed funding, investors will usually be given some equity in the business, or sometimes a share of future profits.
Businesses rely on seed capital to give them a kickstart when they need a large amount of money to get up and running. As a result, seed capital might be a great option for starting a new online casino in 2020.
