Starting a casino can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful casino.
Importantly, a critical step in starting a casino is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
15 Steps To Start a Casino:
- Choose the Name for Your Casino
- Determine the Type of Casino You Will Launch
- Develop Your Casino Plan
- Choose the Legal Structure for Your Casino
- Secure Startup Funding for Your Casino (If Needed)
- Secure a Location for Your Business
- Register Your Casino with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Casino
- Buy or Lease the Right Casino Equipment
- Develop Your Casino Marketing Materials
- Purchase and Setup the Software Needed to Run Your Casino
- Open for Business
1. Choose the Name for Your Casino
The first step to starting a casino is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your casino:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your casino.
2. Determine the Type of Casino You Will Launch
The next step is to determine the type of casino you will launch. The four main types of casinos are:
- Casino Resorts: These casinos are connected to hotels and resorts. These resorts usually have places to eat, spas, shopping, golf and entertainment options.
- Online Casinos: These are virtual casinos that can be accessed through a web browser or mobile app.
- Sports Books: These websites allow users to place bets on sporting events.
- Riverboat Casino: Riverboat casinos are actual boats containing a casino. The riverboat casino is usually on a paddleboat.
3. Develop Your Casino Business Plan
One of the most important steps in starting a casino is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your casino.
- Company Overview – this section tells the reader about the history of your casino and what type of casino you operate. For example, are you a resort casino or an online casino?
- Industry Analysis – here you will document key information about the casino industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your casino? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your casino make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
4. Choose the Legal Structure for Your Casino
Next you need to choose a legal structure for your casino and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the casino and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a casino together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a casino include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a casino is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your casino, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
5. Secure Startup Funding for Your Casino (If Needed)
In developing your casino business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a casino to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a casino that they believe has high potential for growth.
6. Secure a Location for Your Business
Having the right space can be important for your casino. Before you make any decisions, research potential locations and their associated costs. Consider how accessible the location is to customers, how it will fit into your budget and how much space you need for gaming tables and machines.
To find the right space, consider:
- Driving around to find the right areas while looking for “for lease” signs
- Contacting a commercial real estate agent
- Doing commercial real estate searches online
- Telling others about your needs and seeing if someone in your network has a connection that can help you find the right space
7. Register Your Casino with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
8. Open a Business Bank Account
It is important to establish a bank account in your casino’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
9. Get a Business Credit Card
You should get a business credit card for your casino to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
10. Get the Required Business Licenses and Permits
In order to operate a casino, you will need to acquire a number of licenses and permits. The types of licenses and permits you will need will vary depending on your location. However, some of the most common licenses and permits include:
- Licenses from the state gaming commission – In order to operate a casino, you will need to obtain a license from the state gaming commission. This license will allow you to operate your casino in accordance with state law.
- Business licenses – You may need to obtain business licenses from various agencies, such as the city or county in which your casino is located, in order to conduct business in that jurisdiction.
- Tax permits – You will likely need to obtain tax permits from the IRS and/or the state in which your casino is located in order to collect and pay taxes on your income and/or sales.
Nearly all states, counties and/or cities have license requirements including:
- Sales Tax License or Seller’s Permit: for selling products
- Zoning Approval: typically at the city or county level, this provides authorization for construction or use of a building or land for a particular purpose
- Food Service, Processing and/or Warehouse Licensing: to ensure safe food preparation
- Fire Department Approval: a process by which the local fire department reviews and approves the installation of a fire alarm system.
Depending on the type of casino you launch, you will have to obtain the necessary state, county and/or city licenses.
11. Get Business Insurance for Your Casino
When starting a casino, you will need to have business insurance. This will protect you in the event that something goes wrong and your casino is sued. Some of the most common types of business insurance include:
- General liability insurance – This insurance will protect you from lawsuits filed against your casino for things such as personal injury or property damage.
- Casino liability insurance – This insurance will protect you from lawsuits filed against your casino for injuries or damages caused by gambling-related activities.
- Liquor liability insurance – This insurance will protect you from lawsuits filed against your casino for injuries or damages caused by liquor-related activities.
- Employment liability insurance – This insurance will protect you from lawsuits filed against your casino for wrongful termination, sexual harassment, or other employment-related issues.
Other business insurance policies that you should consider for your casino include:
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
12. Buy or Lease the Right Casino Equipment
When starting a casino, you will need to purchase or lease the right casino equipment. This includes things such as slot machines, gaming tables, and cash registers. You will also need to purchase or lease a building or property to house your casino.
When leasing equipment, be sure to read the fine print. Some leases require you to return the equipment at the end of the lease term, while others allow you to purchase the equipment at a discounted price.
When purchasing equipment, be sure to buy from a reputable dealer. Ask for references and contact those references to find out how satisfied they were with the products and service they received.
Here are some of the most common pieces of casino equipment:
- Slot machines: These are gambling devices that use symbols on spinning reels to award payouts.
- Gaming tables: These include blackjack, roulette, craps, and baccarat tables.
- Cash registers: These keep track of all transactions made in your casino.
- Security cameras: These keep an eye on everything that goes on in your casino.
- Staff uniforms: Make sure your employees look professional with uniforms that match your casino’s branding.
It’s important to research what type of casino equipment is best for your specific business. Talk to other casino owners and industry experts to get their recommendations.
13. Develop Your Casino Marketing Materials
Marketing materials will be required to attract and retain customers to your casino.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your casino. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional casino website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your casino.
14. Purchase and Setup the Software Needed to Run Your Casino
To run a casino, you will need software that can handle all of the transactions and track the casino’s finances. This software is essential to running efficiently, so it’s important to do your research and find the right program for your business.
There are a number of different software programs available, but the most popular ones are CasinoVendor and Casino Technology. These programs offer a wide range of features, including:
- Slot machine management
- Table game management
- Financial reporting
- Player tracking
- Marketing tools
Both CasinoVendor and Casino Technology offer demos of their software so that you can try them out before making a purchase. Be sure to ask other casino owners about their experience with different software programs to see which one is the best fit for your business.
Research the software that best suits your needs, purchase it, and set it up.
15. Open for Business
You are now ready to open your casino. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start a Casino FAQs
If you're not familiar with the casino industry, it might be wise to consult with an industry expert before getting started. With careful planning and preparation, however, starting a casino can be a lucrative endeavor.
There is no one-size-fits-all answer to this question, as the ease or difficulty of starting a casino will vary depending on your skills, experience, and resources. However, if you follow the steps above, you should be able to start your casino without too much difficulty.
Most casinos are profitable when they offer a variety of games, including slots, table games, and poker.
It's also important to consider your customer base when deciding what type of casino to open. For instance, a casino that caters to high rollers will be more profitable than one that caters to casual players.
So, what type of casino is most profitable? The answer to this question depends on a variety of factors, so it's important to do your research before making any decisions.
The startup costs for a casino range between $50,000 and $2 million depending on the size and scope of your project. This includes costs associated with purchasing/leasing property, obtaining licenses and permits, purchasing equipment and furniture, and hiring staff. Additionally, you may need to budget for marketing costs or legal fees associated with setting up your business.
It can be costly to start a casino, but there are many ways to offset those costs. For instance, you can solicit investors or line up partners who can help you get started. You can also look for grants and loans that are available specifically for small businesses.
The ongoing expenses for a casino will vary depending on the type of casino you operate. However, they range between a few thousand dollars per month and up to $50,000 or more. The most common expenses include rent or mortgage payments, utilities, employee salaries, and advertising or marketing costs.
It's important to budget for these expenses so that you can maintain a healthy cash flow and remain profitable. You may also want to consider setting up a reserve fund to cover any unexpected costs.
Casinos make money by charging a fee for each game that is played. They also make money by taking a commission on each bet that is placed. In addition, casinos earn revenue from hotel stays, restaurant meals, and other services that they offer.
Casinos can be quite profitable, but it's important to remember that there are many expenses associated with running one. In order to be successful, you'll need to make sure that your business is well-organized and that you're able to stay on top of your expenses. You'll also need to be prepared to invest in marketing and advertising in order to attract new clients.
Some of the key things you can do to make your casino more profitable include:
- Offering competitive pricing
- Providing high quality services
- Investing in marketing and advertising
- Offering customer loyalty programs
- Maintaining a high level of customer service
- Focusing on the latest industry trends and technologies
- Narrowing your focus to a specific niche market
- Offering add-on services that complement your main offering
- Optimizing your website for SEO to increase online visibility
- Creating a unique selling proposition
There are a number of reasons why casinos may fail, including the following:
- Lack of planning and organization
- Poor marketing and advertising efforts
- Lack of customer service
- High overhead costs
- Infighting among casino owners
- Financial difficulties
- Failure to keep up with industry trends
One of the main reasons that casinos fail is a lack of planning. This can include not having a detailed business plan, not doing research on the industry, and not targeting the right customers.
Another reason is a lack of marketing and sales skills. This can include not creating a sales process and not have a clear and strong value proposition.
The last main reason is a lack of financial management skills. This can include not having a realistic budget, not tracking expenses, and not investing in the business.
The casino market is made up of a variety of different players, including small businesses, large enterprises, and even individuals.
Some of the key players in the market include:
- Caesars Entertainment
- MGM Resorts International
- Las Vegas Sands Corporation
- Wynn Resorts
- Station Casinos
- Pinnacle Entertainment
However, there are many other players in your specific target market, and it is important to research the market to identify the key players that may have the most direct influence on the success of your business.
Casino fees can vary depending on the type of Casino services being offered, as well as the size and scope of the project.
However, some common casino fees include:
- Craps with bets between $1 to $3 per bet
- Roulette with bets between $5 to $25 per bet
- Poker games with pots between $10 to $100 per pot
- Slots for $0.25 to $1 per spin
The best way to determine the right fee for your casino services is to research the rates of similar businesses in your industry, and to also consider the value that you will be providing to the client.