The casino business is a lucrative choice—the only thing that outsiders see is money. People know that casinos have a small house edge, but that the house always wins. Such perspective brings people to believe that running an online casino business has little risk.
But are there hidden risks to investing in the online casino business? If so, what are they?
Can I Win Real Money in an Online? Most of the best online casinos offer players the chance to.
These risks are:
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- The world-famous Las Vegas Sands brand of resorts and casinos can be spotted throughout Asia and the United States. And LVS stock was a fairly low-risk investment during times of economic prosperity.
- A secure casino will have an increased number of players. Many gamblers found online gambling to be more secure than the land-based casinos considering the improved innovations and security. With the numerous people trooping into online casinos due to the secure platform, it is very advisable to invest in a web casino. Daily Fantasy Sports.
Security Risks
Bankruptcy Risks
Software Risks
Legal Risks
Today, we will discuss each of this risk and help you understand why these are your top priorities. Before you invest in an online casino business, use these points as reference for validation, and decide if the online casino business is a venture worth taking.
Security Risks
The casino industry is only about one thing—money. Where the money is, the thieves will follow. If you operate an online casino, players expect their data and financial information to be secure. A lot of people who invest in the casino business think that security is an easy aspect of the business to implement. The truth is that it isn’t. Despite all the technology at your disposal, the one key thing that an organization must never forget is to train their employees about security.
The thing with online security is that you can build firewalls and use the most advanced encryption method and yet fail. The failure is not because of a robotic or system issues, but rather because of human error.
Think of building a solid structure—a house or a building. It may be fortified and formidable, but if a person leaves the door open, the culprits can get inside. This is what usually happens in online security breaches. In large corporations, employees are trained never to view any suspicious email. Usually, hacks occur because an innocent employee clicks an email that has a virus embedded in it. Once this happens, the hacker can now plant a seed that will grow inside the system. This virus is now on the inside, and one day, it will open the doors for the hacker to get in and steal information.
Security is a risk that many casino operators take with a grain of salt. People who do not pay attention to this are usually the ones whose casino systems get infiltrated. By the time they realize what happened, it is too late.
Bankruptcy Risks
Money comes and goes in casinos: be it online or a brick-and-mortar gambling facility, there is a huge turnover of cash in any establishment.
The thing with a casino is that all game results are random. What many casino operators do not expect is that one person is always bound to win the jackpot. The number of players has little to do with this. Luck is luck, and you will never really know if someone is going to win. Despite having statistical models that can predict the odds or possibility of a person hitting the jackpot, these are nothing more than numbers on paper.
The risk of a platform running jackpot games is bankruptcy. You are legally obligated to pay the winner a prize. If you do not have the money set aside to pay for it, you are going out of business. To prevent this from happening, you have to stipulate in your Terms and Conditions that a prize that is so abnormally large must be broken down into instalment payments. This provision must be put in place, so you do not run out of money because a court of law stated that you pay.
The good thing about this strategy is that a player who have won millions can be paid on a monthly basis. With this set-up, your casino is earning money monthly, and then you can pay the monthly instalment to that lucky player from these earnings. You can never always claim that the game has malfunctioned. This excuse is not always going to fly, and casino watchdogs are on the prowl, looking for winners you do not want to pay.
Spare yourself the legal trouble. Put a condition in place where you can pay your jackpot winners on a monthly basis. With this approach, you can continue your operation and still keep your gaming community happy.
Software Risks
If you offer free casino games, then you are not in any risk. Demo slots for fun do not bring income for players. But if you operate an online casino for real cash, you have serious dependencies on your game providers.
What is this risk? If casino slots or games break down, players will not be happy. Once they have placed their bets, and there was a malfunction, you are liable to fix that problem and return those bets. If one of your games is down, players cannot access the game, and they might leave. The experience is going to be so bad that they may even consider moving to a new online casino.
The risk here is that your entire operation is dependent on your game developers. As an online casino, you have to aggregate games from software providers. This is the fastest way to put up your online business. This dependency can be addressed if you build your own gaming firm. Such was the approach taken by some casinos where they aggregated hundreds of games from software providers, and yet they built their own team to create exclusive games.
Not only did this mitigate the risk of games going on down time, but it also allowed them to brand their casinos as one that has exclusive game selections.
Legal Risks
Every country or sovereign state has laws around the gambling industry. You are at risk if you operate in a country where you are banned. Governments can sue you, come after you, and even call to your jurisdiction to pay heavy fines or shut you down.
You need an army of legal experts who can help you set-up your business. While it is easy to set up the software, compliance to the law is another thing.
To prevent yourself from getting the heat, make sure you do your due diligence about the following:
Get a license from an established and credible body
Secure your documents from the government of your incorporation
Get a group of lawyers to discuss which countries you can operate in
Set-up a team in charge of compliance with international anti-money laundering laws
As you can see, all of these four points are loopholes where your organization can be charged of fraud or illegal business practices. As an investor, you may not have expertise on all these four aspects. You need to ensure that you have a team knowledgeable enough about what the law is, and how to comply with them.
Conclusion
Launching an online gambling business, or investing in one, is a promising endeavor. After all, an online casino does not need as much money as putting up a physical one. But like any business, there are risks. If you know what these risks are, you can take action and mitigate them. All businesses have risks, but you can significantly reduce these risks from happening if you set-up processes to put them at bay.
While everyone is looking to the renowned stocks that have been in the exchange market for decades, some investors are shifting their focus on the online iGaming industry.
Most of us have by now tried betting on sports or playing online casino games. Recently, this is one of the industries that have been escalating at an alarming rate across the globe.
Besides the level of new gaming technology like mobile casinos, and live dealers giving this industry much support for visibility, the introduction and legalization of gambling in most countries have also contributed to its growth. But have you ever thought of investing in this industry as an investor?
Well, it is quite easy, and online casino is a fast-growing market as more and more countries legalize iGaming on the internet. From Canada, Sweden, China, the US, to the UK, the stocks might turn out to be a good investment. Here are ten iGaming stocks that everyone can invest in (this being intended exclusively for information purposes):
1. Ladbrokes – GP.22
This is another gambling stock that you can invest in that is on the London Stock Exchange. It is a benchmark in the United Kingdom when it comes to online betting. It is one of the most solid companies across the globe in this industry that has made its stocks very stable. After a close analysis of its 10 years in the stock market, experts call it a conservative investment.
2. NetEnt – NETB
This is another high-quality software provider in the virtual casino world. Every tester in Canada, usually go to this company as a quality seal. Although this company joined the gambling sector a little bit late compared to the others, it has been at the forefront when it comes to online casinos and popular slots. Its stocks in the Stockholm Stock Exchange has been doing well after overcoming stiff competition from the other companies in the market.
3. Stars Group – TSGI
Have you ever heard of PokerStars? This is the head and the hub of some of the largest poker sites across the globe. On the internet, it is one of the best gambling companies when it comes to its coverage. With its expertise in the field, it has positioned itself as one of the leading and key players in this industry. But, its stock and shares in the market have been volatile. It is on the Toronto Stock Exchange and it is good for the professional traders.
4. LeoVegas – LEO.ST
Over the past five years, this has been one of the most successful gambling company in Sweden. One of the things that giving LeoVegas a footing in online gambling is its smartphone casinos with the most popular one being Leo Vegas Casino. It has been making it possible for gambling fanatics to play their favorite online slots using their mobile phones. It is on the Nasdaq Stock Exchange.
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5. Kindred Group – KIND-SDB
These stocks and shares from the Kindred Group are on the Stockholm Stock Exchange. It is one of the great companies with various betting sites revolving around sports, online casinos, bingos, and poker. Unibet happens to be the trademark of the Kindred Group which so is the largest betting site in sports globally.
6. Caesars Entertainment Corporation – CZR
For many years, this has been a landmark in the gambling industry. It has recently turned out to be one of the most interesting stocks to put your money. It is one of the leaders in the gambling industry that most investors are watching and aspiring to invest in.
7. MGM Resorts International – MGM
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If you are a conservative investor and don’t want risks around you, then you can decide to go with MGM. It is trying to get to US betting which will definitely spearhead its stocks and entire market share. It is one of the gambling stocks that has a great presence in China and has been doing well from one year to another.
8. Scientific Games – SGMS
It is one of the stocks that have gained online dominance and beat stiff competition around online casino gaming. It has been a significant company in providing digital gaming services, content, and products. As an infrastructure provider, it has all the chances of growth in this market making it a good stock to watch.
9. International Game Technology – IGT
This is another innovative casino gaming company that is increasing and expanding its digital gaming expertise across the globe. Its live streaming avenue of Dynasty Electronic Table Game (ETG) will provide more games for its players like blackjack and the famous baccarat. With such kind of innovations, definitely, its stock will grow to make it a great gambling stock to put your money in.
10. Playtech – PTEC
This Israel based software developer is one of the popular casino software providers across England. It has its stock listed on the London Stock Exchange. Playtech is an expert in online casino gaming has released over 500 games. It uses some of the most advanced technology in virtual casinos. Considering the vast and fast growth of the gambling industry, if you are an active investor, then you can consider one of the above gambling stocks.
DISCLAIMER:
News, data and statement included in this article is intended exclusively for information purposes.
It should not be considered a recommendation for the purchase, retention, or sale of the securities referred to herein.