Closed or Bankrupt Casinos
Online casinos are constantly competing with each other for new clients and new casinos come to the market every week. The competition is fierce. At the same time, many casinos do not do proper marketing and go bankrupt or close their doors or alternatively get acquired by another company. Other casinos simply run out of money, some have a weak business model or poor business execution. There are also those which just have problems with their sites or customers. Casinos go bankrupt every month and this is normal, but we want to stress that the right way for a casino to close its doors is to warn players and partners in advance, but many casinos have closed their doors without any notice to anyone.
Recently Closed or Bankrupt Casinos
Here you will find the casinos that have run out of business. The Control-Freak Mamma advises our players to avoid playing on them:
Closed or Bankrupt Casinos – News and Artiles
The proper way of closing an online casino
Once the casino realizes that it is losing money and will have to close its doors as a result, the right decision is to warn both players and affiliates quickly, preferably a few months in advance. It is very important that they inform their players and give them enough time to take their money away. For example, the image below shows an email received by players from the closed Triple Aces casino, where the information was received in advance of the end of the operation, giving everyone plenty of time to withdraw their cash.
On the other side, we have also seen and heard of many cases where casinos close their doors without any warnings. They just declare bankruptcy and hardly allow players to withdraw their cash. We recommend that you only play at trusted and recommended providers.
Why Do Online Casinos go Bankrupt?
The most obvious reason, of course, is that they don’t have enough money to pay players and this is mainly because they have failed in attracting new players. Let’s take a brief look at the total cost of starting and running an online casino.
What does it cost to start an online casino?
Each of us can start an online casino these days and of course many are dreaming to do so. So what are the total costs you may wonder? In general, to start a decent-sized online casino, an investor is expected to have a budget of around € 2.5-3 million. In general, business models are designed so that the return on investment and profits start after around 2 years. The key to a successful online casino is to attract enough new players to play at the casino and often this is a goal that is difficult to achieve in today’s highly competitive market. Here is a breakdown:
The casino license
It is important that the appropriate license is selected. You can check more about the different Casino Licensing location, but in general, the most popular places are Malta, Curacao, Gibraltar and the UK. Malta’s annual cost, excluding taxes, is around € 50,000. You must also register the company and own the business address. This will set you back with another € 5,000 for a standard office.
The most popular Casino Licensing Locations
Choosing the proper Software
For an online casino to be attractive to players, it has to start with a good selection of games. The games offer reliability and choice, so a good casino needs an excellent combination of the latest slot machines, blackjack, bingo, poker, roulette, baccarat, Caribbean poker, and scratch games from the best game developers like Microgaming, NetEnt or Playtech. The acquisition costs of these companies are approximately EUR 200,000. Of course, software developers charge a percentage of profits during operations, which range from 20% to 40%. The price of a high-quality slot game is about 3,000–5,000 euros. This means that the best titles are actually quite expensive.
There is another important point here. There are some progressive jackpot slots that are connected to a centralized jackpot that is shared with many other onlines casinos. So if someone wins a super jackpot from your casino, you have to pay the full amount. Online slot and software providers require maintaining a serious cash stack (often around half a million euros) to ensure that winners are paid. For example, Microgaming requires casinos to maintain a reserve of between $ 300,000 and $ 500,000 for payouts.
Building an Appealing and Quality Website!
There are, of course, different models for casino operators that only require casino operators to submit their offer logo, color chart, and proper graphics, but in reality, this makes the casino almost similar to most others on the market. All in all, this costs around € 5,000 to € 10,000. A more advanced website can, of course, have a lot more resources to build, especially game elements that require serious final programming.
Marketing and Getting players to the new casino!
Getting new players is not as easy as it sounds. Acquiring new players is expensive and requires a lot of investment. Some online casinos hire specialized companies (affiliates) to help in the promotion. But many new entrants to the industry are starting massive advertising campaigns.
Note that when you start an online casino, you need to compete with some large and experienced companies with massive marketing departments. Let’s have a look at Global Gaming’s Q1 annual report about the famous Ninja Casino.
Ninja Casino spent about 7 million Euros on marketing campaigns, television ads, radio, and digital media! They are serious competition indeed. Smaller casinos will be under a lot of pressure to compete with this.
Outsourcing and Hiring Staff
A successful online casino thrives on a good support staff that can work around the clock and help players. This requires having an office, hiring and managing staff. The alternative is to use companies that offer online support as an outsourced service, which is in fact a quite popular option these days.
In addition, programmers, service providers, designers, and marketers need to be also present to make sure everything works, looks good and is familiar and intuitive to potential players. Of course, the casino site must always be online. If sites go down or require maintenance, this will cost a lot. Players don’t like this and they quickly go to another casino.
The more deposit and withdrawal available at the casino, the more players you will get. But there is a cost involved, you have to deposit enough money in each one, so that you can send your players their winnings quickly. For example, if you offer PayPal as a payment method, you will need to deposit some considerable amount in available cash.
You can also outsource payments to a payment processor with whom you have agreed to process all payment methods. New casinos want this option because it saves them time and effort. This is will set you back with another $ 15,000 to $ 40,000 per month.
Here is the breakdown:
|Cash balance requirement||$500,000|
|Marketing budget (moderate)||$600,000|
|Total cost per year||$1,785,000|
Well, there you go. Now you know how much it costs to start an online casino. Online casinos go bankrupt because they work poorly, they don’t have enough money to run the casino anymore, or they simply cannot compete with others.
Mergers and acquisitions
There are also those casinos that get bough off by a bigger company. The online casino industry makes a lot of mergers and acquisitions. As a casino becomes big and popular, it will become a very interesting acquisition destination for large companies. One recent example of such acquisition is William Hill’s high-quality Green Casino.
On the other hand, when a casino loses money or cash starts to run out, its owners often try to simply reduce losses and just get rid of the casino, but there are no buyers. This was the case in early 2018, when the popular Larry Casino suddenly went bankrupt. This came as a surprise as we thought that the casino had a great and fun design, in fact we were pretty much fans of the original Larry game.
How can I be sure that a casino is reputable?
This is easy. Read our articles, reviews, tips, and take in mind our recommendations. You can even contact us if you feel like you need any help. Our team features great gambling enthusiasts who have many years of experience in the industry.