A Look into the iGaming Industry Featuring Types of Business Models
When we talk about companies in the iGaming sector, we don’t just mean online platform operators. There are several types of iGaming business models that provide services to the online gambling industry.
A business model is an outline of how an iGaming company plans to make money with its product and player base in online gambling market. At its core, a business model explains four things:
- What kinds of online gaming product or service an online gaming operator will offer?
- How it intends to market that iGaming product or service?
- What kind of expenses it will face for iGaming platform operation?
- How it expects to turn around profit for your iGaming business?
Some of these business models will require a license to operate while others will not. The gambling sector is booming, and so to are opportunities for success. If you are considering a move into the online gambling industry, here are some of the most common types of business models in iGaming sector.
Latest iGaming Developers
There are multiple types of business models that iGaming business use to operate and make their revenue. This article will be listing the top most used types of online gaming business models as well as identifying the difference between a revenue and a business model.
However, the names/terms for the online gambling business models may vary from one region to another.
The type of business models in online gambling industry you will be most familiar with is the platform operator. This is a kind of business models that operates online gambling websites and/or applications. Typically, they will provide games like slots, casino games, live dealer games, lotto, bingo, and scratchers. It also applies to sports betting, fantasy sports, and e-Sports platforms.
To operate a gambling platform, you will need a company and a license from a jurisdiction that allows online gambling. At Fast Offshore, we recommend opting for an offshore jurisdiction such as Kahnawake, Malta, or the Isle of Man for your company and online gambling license.
iGaming Software Developer
Another type of B2B & B2C business model in online gaming sector is an iGaming software developer or game studio. These companies design and create games used by online gambling companies. These games could include roulette and blackjack, video slots, or live dealer poker games. It could also include online lotteries, bingo games, or even digital scratch cards.
iGaming software developers aim to create a game that works well, looks good, and is enjoyable. Of course, it should make money for the platform as well! Games are then licensed to online gambling platforms that integrate them into their sites.
Competition is fierce in the game development industry as studios compete to create the best, most innovative, and lucrative gambling options. A license is not generally needed for iGaming software developers, although some countries are mulling options in the future.
White Label Platform Supplier
Unlike an iGaming software developer, a white label platform supplier is a type of business models that offers other gaming products to operators.
Online casinos and betting sites have different needs, including CRM, databases, payment processing and accounts, marketing management and analytics, and of course, the software in which licensed games operate.
Additionally, some software system focuses on random number generation, provably fair, and even compliance! There is a multitude of options. Some companies tailor make software for the iGaming industry, while others have one-size-fits-all approaches.
Online gaming sites need fast, secure and simple ways to make deposits and withdrawals for their players. You should provide this by connecting your online gaming platform system with a payment processing gateway that accepts credit cards and other payment methods that you allow.
If your online gambling site allows gaming in multiple currencies, then the gaming payment gateway must handle these without requiring expensive currency exchanges. As well, the gaming payment gateway should support all of the languages that your gambling interface offers to players.
The integration with your own gaming system needs to be fully automated, with transactions between you and the players not requiring any manual intervention. This will reduce the risks of fraud both for you and for your players.
iGaming Merchant Accounts Provider
iGaming companies operating an online casino need a merchant account in order to accept payments from their players. As iGaming operations are considered high risk they are often rejected by banks and instead owners have to work with a high risk payment processor that is familiar with the online gaming industry and already provides gaming merchant services.
With the ever increasing popularity of paid online gambling and the increased number of iGaming website companies the need for iGaming payment processors to support the online gaming industry has also increased. It is vital for gaming businesses to have the right payment solutions for their players.
When it comes to a type of iGaming operator, gambling affiliates are some of the most integral. Affiliates drive traffic to gambling operators and are an essential revenue stream. They are crucial to operators and command significant commissions for their work.
Affiliates work with three main business models. These include rev share, an ongoing partnership where they continually receive money as players continue playing. Another type is CPA or cost per acquisition. This is where sites pay a flat rate for each customer that deposits. The last type is a hybrid deal, which combines the previous two. You don’t need to be licensed to offer affiliate services.
At the end of the day, there is no perfect way to decide your business model in iGaming sector, it entirely depends on the scope of your operations and the costs you may incur along the way.
In addition, it may be helpful to research other businesses that are similar to yours (especially competitors) and see how they’ve structured their operations for iGaming business. This information will be able to inform your business model generation, as well as suggest avenues you can take to differentiate your business from others out there.