How Profitable are Online Casinos?

Online Casino

Las Vegas casinos generate over $1 billion per month ($13bn per year), according to Forbes. But how much money do their counterparts make? In this article, we’ll delve into the profitability side of the iGaming business.

Do online casinos make money? How do they make money? Should you invest in a casino site? The short answer is that online casinos are profitable. But before you start your own business, read the following: 

The Top 10 Casino Sites Make $10 Billion Annually

The online casino industry is tremendously competitive. There are over 2000 casino sites online, many of them with valid licenses from the UK, the US, Malta, Curacao, Panama, and Gibraltar. 

The 10 most profitable casino sites produce more than $800M per year each. The top five brands earn over $2 billion each:

  1. Flutter Stars Group: $5.28Bn
  2. GVC Holdings (Coral): $4Bn
  3. Bet365: $3.5Bn
  4. Scientific Games: $3Bn
  5. William Hill: $2Bn

Now, the most profitable casinos aren’t always the best brands. So, which is the best betting site? It depends on what you value the most in a sportsbook. Someone that prioritizes bonuses and odds might pay less attention to payout speed and customer service.

Generally speaking, though, the best gambling brands offer a little bit of everything. They have beautifully, mobile websites. And they offer quality customer service. Additionally, you can play a variety of games and qualify for loads of bonuses.

The iGaming Market is Valued at $60 Billion

The online casino market is huge–$60 billion huge according to research firm, Statista. This figure is projected to hit $95 billion in five years. To provide some comparison, the music industry is valued at $23.1. billion, and everyone listens to music.

Hollywood is valued at $42 billion while Twitter makes $3.72 billion in annual revenues. Facebook, with a fanbase of two billion users in 200+ countries, has a valuation of $85.97 billion.

The bottom line: There’s plenty of money to be made in the casino industry. And some brands know how to best optimize this income. As you’ll discover below, some brands generate over $500M while others are soaking in debt.

The Biggest Brands Own Multiple Casinos

This might come as a surprise to some, but the biggest casino sites in the world own multiple brands. Take 888 Holdings as an example. It has a sportsbook, a poker, bingo, and casino website.

Flutter Stars Group, the biggest online gambling brand, owns Betfair, Paddy Power, PokerStars and Sky Bet. GVC Holdings runs Bwin, Sporting Bet, Gala, Ladbrokes and Foxy Casino. Of course, some brands run a single casino—Bet365. 

Importantly, profitable casinos tend to offer a wide range of gambling products. As mentioned, 888 Holdings offers casino games, sports betting, poker and bingo. Most operators curate their products to one website.

As such, you can play slots, blackjack, roulette, bingo, poker and even bet on sports without leaving your favorite app. 

What are the Biggest Money Makers for Online Casinos?

In Las Vegas, many casinos make their money primarily through non-casino services. Let’s use MGM Grand as an example. In 2016, the casino earned $4Bn from its casino floors. However, it made $6 billion from rooms, food, entertainment, and merchandise.

Online casinos don’t have the privilege of offering room service and live shows. So, how do they make money?

  • Slot Machines

Slot machines produce over 70% of a casino’s income. The explanation is simple: People love slots. These games of chance feature RNG software that runs a series of symbols on 3-7 reels. Then software produces winners and losers randomly.

Slots come in many types, which is probably why there are so popular. You can find games based on sports, TV, film, video games, ancient Egypt, Norse gods, politics, and other innovative themes. Importantly, online slots payout regularly.

On average, online slots payout 95% of gambled money. Progressive slots have lower payouts. But guess what? They could turn you into an overnight millionaire.

  • Table Games

While slots generate up to 80% of a casino’s income, table games bring 5% to 20% of the revenue. This doesn’t mean people dislike poker, blackjack and roulette. Compared to slots, there are fewer table game fans.

That said, some casinos make a lot of money from table games. Take poker sites as an example. These platforms specialize in bringing together poker fans from around the world. And they make most of their money by charging fees and commissions to winners.

Nowadays, the revenues at online table games are soaring. And live casinos are responsible. These new casinos allow people to play baccarat, poker or blackjack through video—you can see and interact with players.

  • Other Games

Games often categorized into “others” include video poker, scratch cards, bingo and Keno. These games have a small fanbase. But they help boost a casino’s profits, nonetheless. Bingo and video poker are pretty popular despite not attracting the same attention as slots.

In fact, bingo is so big it contributes over $1 billion to the UK economy. Topy bingo companies provide varieties of bingo on dedicated websites. On the flip side, video poker is mostly found at regular casino sites. 

  • Sports Betting

Where an online casino owns a sportsbook, there’s a chance it makes more money from sports betting than through its casino games. Sports betting is a multi-billion industry. And it’s one of the reasons 888 Holdings, GVC and Flutter Entertainment make so much money.

In many jurisdictions, you need a license to provide sports betting. If you already own a casino license, that means you have to pay extra for a betting license. In some cases, though, you can apply for a license that covers both casino and sports betting.

Summary

The online casino industry is worth $60 billion. This figure is projected to grow past $90 billion by 2025, surpassing Facebook’s current revenue. Casino sites have loads of ways to generate income from their services.

The biggest brands own multiple casinos and betting websites. But for average casinos, the way to make money is through slots, table games and sports betting.

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