It’s not simple to start a casino. Costs frequently escalate, and a sizable cash reserve must be ready in order for a project to be approved by authorities. But how much does it really cost to launch a casino?
Size, location, licensing, and many other factors will affect the cost. The initial quantities that are budgeted for a project are typically approximations, and as the project moves forward, costs rise, necessitating a substantial financial buffer.
Raw costs for starting a casino can range from $2 million to $5 million for the majority of small casinos, up to $10 million and $20 million for medium-sized ones, and billions of dollars for casino resorts planned and built by the greatest names in the sector.
Next, find out how much it would cost to start a casino and how much it would cost you based on your plans.
How Much Does It Cost to Open a Casino Determined
In order to make the procedure clearer and simpler to understand, the cost of a new casino is typically determined by taking into account four elements. Before getting into the financial details, the majority of casino investors would usually try to estimate the costs of the following four expenses.
Location
It can be tricky to find a casino. In addition to paying a sizable amount of money up front to buy or rent the land, you must also confirm local laws and follow zoning restrictions. Additionally, there are the NIMBYs, who may be partially justified in their opposition to the idea of a casino in their neighborhood.
This means that you will incur more expenditures when pushing for legislation or persuading locals that a casino may be a source of financial benefit rather than social problems. The location itself may cost several hundred thousand to several million dollars. Usually, there is no way to know until you look at a map and do some math based on the cost of real estate in the area.
Naturally, there are ways to cut costs, but it’s still critical to go by the real estate maxim “location, location, location,” according to which you want to make your casino simple to find. Although a prime location is pricey, you must make sure that potential consumers won’t get lost when traveling to your casino. No matter how expensive the casino location is, you should make sure you get your money’s worth rather than taking quick corners.
Size
Naturally, size will be important. There would be higher maintenance and up-front fees for larger properties. But are you only referring to a casino here, or are you also considering tourists that you want to draw in as part of a more alluring experience?
The scale of the casino will unquestionably have an impact on the project’s cost, with each additional unit and table driving up that cost, necessitating more maintenance and additional people to oversee and maintain compliance with the relatively rigorous regulations that go along with operating a casino. A hotel will need to be considered if you want to create a project that goes beyond merely offering gambling, and this is when things start to get very pricey.
In the United States, the cost of a typical hotel is from $20 million to $30 million, and this is only to get you started. Size may be more affordable, but it may also result in a worse client experience, which will negatively affect your capacity to produce revenue and ROI.
A larger casino will cost you more money in addition to the upfront fees, particularly if you want to furnish it with opulent furnishings, accessories, carpets, and tapestries that encourage wealthy visitors to part with their cash at your establishment.
When estimating the price to open a casino, there is a lot of fine-tuning and balance between quality and quantity. Any casino with 100–500 slot machines, 10–20 table games, and up to 45,000 square feet might actually be your investment predictions at the outside if you are reading this, since it is likely that you aren’t looking at a very large casino to begin with.
Equipment
You already know that building or renting a property will cost you a significant amount of money. You will need to take another close look at the type of equipment you wish to install after you have estimated these prices, minus or plus a hotel.
Look at market prices, which range from $500 to $25,000, to get an approximate sense of how much a slot machine would cost you. Since they are the machines designed for physical casinos, $500 is a little on the cheap.
You would need to choose what equipment you want to buy and the cost of the gaming software alone may be $3,000 or more. Typically, their ROI increases with improvement. However, premium machines are expensive, with some suppliers even charging more than $25,000.
Let’s imagine you choose something in the middle and are prepared to shell out $10,000 for 100 slot cabinets each unit. This already costs $1 million and might not offer you an advantage. You must also take into account the promotions that other casinos have to offer.
On the other hand, table games have slightly better prices. A professional blackjack table or roulette table can be purchased for between $10,000 and $15,000. But after that, you need someone to staff it; often, there are two or three croupiers each table.
Some of them will have linked jackpots, which are very popular. Although penny and video slots provide a respectable return on investment (ROI), players want to play games that thrill them. Local area jackpots, nationally linked machines, and other exciting features can help you get a positive response from potential customers.
Licensing
If you have a reliable source of revenue and a spotless legal history, getting casino licenses is actually not that difficult. Since the majority of authorities are eager to draw casinos, generate employment, and collect the tax bonanza, licensing fees are also surprisingly inexpensive. In light of this, the licensing fee itself isn’t excessively high. It goes without saying that starting a casino in Las Vegas will cost you far more money. The typical licensing fee(s) is/are roughly $770,000, but this applies to more than just the casino itself.
According to the American Gaming Association, however, you must be ready to fork over anywhere between $20 million and $50 million in initial license fees if you want to run a casino in New York.
Next, you must plan ahead and take taxes into account. Slot machines and table games may be taxed individually in some jurisdictions, and some markets may have substantially higher taxes than others (such as New York and Pennsylvania against Nevada and New Jersey).
This means that hiring a consultant to help you sort through the legalese and gain a better knowledge of how to proceed with your project is typically necessary. In addition to assisting you in estimating the price of operating a casino, licensing costs can also be used to determine whether particular markets are initially viable.
A successful casino will typically be able to provide a high return on investment regardless of the tax base, but for someone on a tight budget who cannot take on a lot of risk or debt, the process of selecting a less onerous licensing and taxing system could be vital.
Costs of Opening an Online Casino
The environment in which we live has undoubtedly evolved, and many people are seeking more practical casino solutions. Online casinos have seen a rise as a result, and they are especially successful in countries where they are legal.
You may believe that starting an online casino is simple, and although this is true, the costs can quickly add up. You will need hundreds of thousands of dollars to launch even a simple internet casino. Starting with $100,000 would be stretching your luck to the absolute limit because you’d need to have a lot of cash on hand to guarantee that you could pay out winning consumers.
In fact, some internet casinos fail because their patrons had a brief run of luck and the casinos lacked the money to pay out. Because it would ruin your investment, you don’t want this to happen to you. What is a reasonable sum of cash on hand? It will mostly depend on the legal system.
Generally speaking, casinos must have $200,000 to $500,000 in cash on hand, though this amount may need to be adjusted depending on the products they sell and the amount of revenue they bring in. Fortunately, casinos don’t have to create their own platforms or marketing strategies from start anymore.
Many vendors will give you everything you require to operate your casino, including the whole platform and game access, as part of the package you select. To guarantee that your casino and players have the greatest experience possible, they will support and maintain everything.
This stated that you will undoubtedly pay for this service. Companies typically don’t disclose specific expenses and only include them in potential offers. In general, you need to budget and spend somewhere between $10,000 and $20,000 for a fantastic software platform, along with its upkeep, resources, and features, bringing the total cost of operating a casino to about $150,000 in software costs per year. You will also need to pay for staff, and depending on where you live, you will need to be prepared to spend at least $150,000 to $250,000 annually to ensure that your casino is always taken care of and that there are responsible personnel in control of things.
Then, you must include in the costs of payment processing and promotion, which would total an additional $100,000 each. What does it cost to launch an online casino then? It will most likely cost somewhere between $1.5 million and $2 million, which is almost as much as a tiny land-based casino!
However, the truth is that an online casino will offer some of the best-in-class options, whilst a land-based casino would only allow you to go so far with this amount of cash.
Costs of Opening a Riverboat Casino
Riverboat casinos are quite popular and provide customers a little bit of a different experience. Most of these facilities no longer move up and down rivers; instead, they are now permanent, easily accessible, and expensive to open.
One requirement is that the yacht you purchase must adhere to certain aesthetic and practical requirements. Yes, opening a riverboat casino will often be less expensive than, say, a land-based casino off the highway, despite the fact that the business might potentially rack up large costs.
Since nobody is really building boat casinos specifically, a good estimate of how much money you would need to spend on a moderate to high-end riverboat casino starts with the cost of the facility (the boat itself) along with the necessary repairs you need to make in order to get it up and running.
An educated guess places the cost of this litigation anywhere between $10 million and $20 million. However, this is not the only thing you’ll be paying for. There are costs associated with furnishings, equipment, and even license, much like in traditional land-based casinos. Riverboat casino licensees aren’t too bad because they’re smaller and generate less money, but they should still be taken into account.
Given the added security on the waterfront and the boat, operational costs would be fairly significant and could easily consume up to two thirds of a casino’s earnings.
Once again, there is the equipment, presumably in much smaller numbers. A riverboat casino typically has an exterior area of 30,000 to 40,000 square feet, which means there is far less equipment to buy and maintain. Overall, riverboat casinos are a manageable, albeit slightly riskier, venture.
The majority of riverboat casinos exist as a result of a legal loophole that makes it illegal for a full-fledged land-based casino to open, but this may change as more governments become receptive to the notion of hosting casinos on the ground. The costs associated with starting a casino on a riverboat must also take into account any legal changes of this nature.
What Casino Should You Open?
What kind of casino you should start actually depends on how risk-averse you are, how much money you have to work with, and what is the best course of action for you. There are many factors to take into account in this situation, including ease of investment, long-term prospects, and convenience.
Would you have to make unusual travel arrangements, interfere with other company plans, or work in a potentially uncertain environment? It takes a lot of money to start a casino, so if you are here, you probably have the cash on hand to investigate your alternatives.
When it comes to creating a casino, it does pay off to take your time, consider all your options, and choose the casino that will be the most cost-effective in the long run.