If you’ve been thinking about jumping on the white label gaming business bandwagon, you’re not alone. Hundreds of new online casinos, online sportsbooks and online poker rooms launch every year. If you’re brand is among those start-ups that manage to nail an effective business strategy, there is huge potential for you to run a profitable operation long term. However, the reality is that it is easy to make common mistakes that can see your business fail before it even gets off the ground. Avoiding these pitfalls is essential if you want to run a lucrative white label brand.
In part one of our white label iGaming guide, we’ll focus on the pre-launch phase of an iGaming business operation and explore the key components that are needed to build a solid foundation so that you can start your brand off on the right track.
You’re a Small Fish in a Big Pond
The first aspect you need to understand about launching white label software for online casinos, or any iGaming white label operation, is that you are up against some hefty competition. This includes both newcomers like yourself as well as existing big-name brands that have successfully secured a strong foothold in the market. Assuming that you can simply launch an operation, expect immediate success and watch the money role in, is a misconception.
The industry isn’t short on iGaming brands. In fact, there are more than 4,000 active white label competitors, all with identical or similar content from the same providers. To put this into greater perspective, in terms of just online casinos, it is estimated that about 200 new casino sites launch every year. Every one of these sites typically focus on the same markets and use similar strategies to attract and retain customers.
However, half of the online casinos that launch each year will fold before they reach the end of their first year.
Why do so many iGaming brands go bust? Some reasons may include these or other operational mistakes:
- Lack of technical platform knowledge
- Not enough customers
- Poor user retention rates
- Poor customer support
- Long withdrawal processing times
Knowing what you’re doing and having the support of the appropriate experts along the way can help you run a smooth and effective operation. As such, when you are planning your iGaming project, make sure you choose the business model that is the most sensible for your goals.
Choose What Works for You
What type of an online gambling business investor do you want to be? Do you have a greater passion for running a white label online casino, sportsbook or poker room? Typically, most iGaming business start-ups gravitate toward online sports betting, which accounts for nearly half of the market. The second most popular are online casinos, which makes up nearly a quarter of the market.
As for online poker, this is currently the least popular of the bunch. One of the reasons is that new products, such as eSports and daily fantasy sports – which are commonly offered by many sportsbooks – target the same market that’s also attracted to poker. What’s more, a minimum audience of 10,000 active players is required for both cash and tournament poker, in order to be able to cover the expenses of the poker platform and operation. This doesn’t mean to say that starting a white label online poker business is a bad idea. It simply further emphasises how crucial it is to choose the iGaming strategy that makes the most sense to your endeavors, to understand your competition and know what is necessary to be able to turn a profit.
Additionally, keep in mind that once you choose your core product, you can still integrate additional products to complement it, to boost your brand’s appeal to reach a larger audience.
For instance, beyond offering the standard online casino entertainment of slots, table games, live casino games, etc., other complementary products that you can add into the mix include:
It’s common practice for iGaming platform providers, such as those TCS reviews, to offer all or a variety of product verticals as part of their casino or sportsbook selections. This gives you the opportunity to begin in one central area before expanding your revenue growth with complementary products, services and features.
Ultimately, you need to think about what products will work best for the business you want to run.
Pick a Target Market
Of course, there’s more to starting white label casinos and sportsbooks than simply choosing the ideal platform provider and niche. You also need to think about who your target market will be. Since there is so much active competition, this decision must be made with care.
Although you may feel inclined to immediately choose the biggest or most lucrative market based on stats, it may work more in your favour to choose a market with which you are familiar or – at the very least – one to which you have a strong attraction. If you are not sure what market would be best to target or you lack the local knowledge to make an informed decision, educate yourself.
A common mistake made by white label gaming sites that tank within their first year, is that they fail to carry out an in-depth analysis of the market they are targeting before they launch. A thorough understanding of the market you pick and why you picked it, should be among the very first actions you take when it comes to building your brand’s long-term product marketing strategy.
Obtain the Appropriate License
To operate a legitimate online gambling brand, white label or otherwise, you need to have a license. Providers of white label gaming platforms typically have either a license from the Malta Gaming Authority (MGA) or a Curaçao license. In other words, if you intend to launch a white label brand, you can expect to have one of these licenses. That being said, you should know that while these are both valid licenses, they are not created equally, nor are they equally respected across the board.
What’s the main differences between a Curaçao and Malta license?
On the whole, while the Curaçao license is the most popular (due to it usually being the least costly and fastest to obtain), the primary issue is that licensees have a hard time proving their credibility to players and affiliates. One of the reasons is that the Curaçao government has not imposed strict licensing rules, which makes it possible for game providers that lack certification to easily secure licenses to offer their subpar (i.e. lack of security, lack of fairness, etc.) products.
Another reason is that, over the years, several white label Curaçao license holders have launched quickly only to close in a few short months, making it a challenge for customers to get their funds returned and affiliates to get their owed commissions.
With that said, this doesn’t mean that having a Curaçao license is bad, it does open you up to several markets. You will simply need to work harder to convince your audience that you’ve built a trusted brand.
As for Malta, the MGA is a leader in the industry and is highly regarded among both players and affiliates. This regulator is far stricter with its applicants and monitors the licensee’s market(s) to ensure that certified payment systems are used, responsible gambling protocols are in place, and what is being offered is fully compliant with data protection laws. Moreover, operating as a sub-licensee of a white label provider’s MGA license is easier, allowing for faster growth and greater sustainability.
What it all comes down to is choosing the most appropriate license for the market you are targeting. Never make assumptions about online gambling laws and rules. Being fully compliant is a must if you want to stick around for the long haul.
Get Ready to Go Live
With a primary product offering, a target market and the proper license, you can start planning your launch. However, once you go live, you’ll be faced with a new plethora of challenges as you go toe to toe with your thousands of competitors. It will then be vital for you to find exciting and unique strategies to draw in players and give them a reason to return again and again.
In the next part of this white label gaming guide, we’ll take a look at how you can make your operation stand out from the crowd and give your target market a reason to choose you over the competition to improve player lifetime value.