This is a question that gets asked a lot. To answer this question fully, we must boil down the answer into a few sections. The truth is, it varies for each casino. Some casinos like gclub make significantly more than others. There are ways to calculate it out. Some of this may be a combination of both assumption and fact. Either way, you will get some idea of how the answer is supposed to go.
The Cost To Run A Casino
The main expense here is the software. Most of the sites you play are getting their licenses from either Playtech, Microgaming, or Net Entertainment. These are the 3 big ones. These 3 are the most reliable and trustworthy when it comes to the software.
There are many who say that these 3 sites alone power about 60% of all the casino sites online. This is a big number. These 3 alone will charge between $11,000-12,000 a pop for their software. This number is at the lower end of the spectrum. Take into account that these casinos require a 15% cut upfront from all profits. 15% may not seem like a lot, but it is a big chunk of change.
The Affiliate Programs
This is the other big expense that most casinos have to deal with. They need these programs to help drive business.
How does it work?
The “webmaster” runs a site that contains information. People sign up. He then runs advertising. He gets a 15% cut from each player that is registered. This is his fee for advertising and running the affiliate program.
There are two ways this commission can happen. It can be done by CPA. This is a Cost Per Acquisition. He can also get his commission through Revenue Sharing. This is called Revshare.
This guy is doing the casino a favor. He is not doing this to be generous. One way or another he will get paid. Each casino that does this has to pay up.
The CPA Agreement
This is a flat rate. The casino pays the affiliate this amount for each player that signs up and deposits money into their account. This fee is usually between $25-500. It depends on how much business the casino site will get in. The higher the traffic, the more the CPA fee will be.
The only downside to this agreement is that the casino ends up risking more than say a player who loses a big hand. It does even out in the end. When the casino takes a look at how many players are being drawn in, they can get a good idea of how much their payoff will be.
How much is the gambler worth to the casino and the affiliate?
On average, each player is worth about $1,000. This takes into account the high rollers who only put in $25.
The casino pays out to the affiliate a percent of what the player loses in a lifetime. The amount will vary. On average it about 25% for the cut. The bigger the casino and the demand, the higher the cut may be. Say a player deposits and loses $10,000 a month. The affiliate will take about $2500 for their cut.