How much does it cost to buy a casino

Opening a casino is not an easy business. The costs quickly mount up, and for a project to get cleared by authorities, there needs to be a substantial financial purse waiting. But how much does it cost to open a casino exactly?

The price will vary depending on the size, location, licensing, and much more. The sums that are set out at the beginning of a project are usually estimates, with costs mounting as the project progresses, meaning that a solid financial wiggle room is required.

In raw terms, the cost of opening a casino could vary from $2 million to $5 million for most small casinos, up to $10 million and $20 million for medium-sized ones, and billions worth of dollars for casino resorts that are built and developed by the industry’s biggest names.

Next, see what determines the cost to open a casino and how much it could cost you depending on what you have in mind.

How Much Does It Cost to Open a Casino Determined

There are generally four factors that are considered in calculating the cost of a new casino – this is in general to make the process simpler and easier to understand. Most casino investors will generally try to figure out the costs of the following four expenditures before going into the financial nitty-gritty.

Location

Casino locations are a fiddly matter. Apart from having to offer a lot of money upfront to buy or rent the property, you also need to check in with local regulations and ensure that you respect zoning regulations. Not only that but there are also the NIMBYs who, somewhat justifiably, may not be too keen on the idea of having a casino in their area.

This means that you will accrue additional costs in lobbying or convincing residents that a casino can be a financial boon rather than the source of social ills. The location itself can cost anything from a few hundred thousand to a few million. There is usually no way of knowing until you look on the map, and crunch the numbers based on what the area’s property costs are.

There are ways to limit your costs, of course, but it’s still important to follow the popular real estate adage “location, location, location,” whereby you want to make your casino easily accessible. Prime location is expensive, but you need to make sure that your potential customers won’t end up lost on the way to your casino. Whatever the cost of the casino location, you need to make sure that you are getting your dollar&#;s worth rather than cut shortcuts.

Size

Understandably, size will matter. The bigger the property, the more maintenance, and upfront costs there will be. Are you just talking about a casino here, however, or are you looking at holidaygoers whom you are trying to attract as part of a more attractive experience?

The size of the casino will definitely impact the cost of the project, with each unit and table you add, pushing up that cost, requiring more maintenance and even more staff to manage and ensure that you meet the rather strict regulation that goes hand-in-hand with running a casino. If you want to have a project that aims at something beyond just gambling, you will need to consider adding a hotel and this is where things get very expensive.

An average hotel cost in the United States costs something along the lines of $20 million to $30 million, and this is just to get you started. You may get size at a cheaper rate, but this could lead to a poorer overall experience for customers which will directly impact your ability to generate revenue and ROI.

Apart from paying the upfront costs, a bigger casino will cost you more, especially if you are looking to deck it out with luxurious furniture, equipment, carpets, and tapestry that inspire trust in well-heeled patrons who are willing to part with their money at your property.

There is a lot of fine-tuning and balancing between quality and quantity when it comes to determining how much it costs to open a casino. If you are reading this, it would be fair to say that you aren’t looking at a very big casino to begin with, so anything with slot machines, table games, and up to 45, square feet might actually be your investment projections at the outside.

Equipment

Now, you already know that the construction or renting of a property will already cost you a hefty bit. Once you have calculated these costs – minus or plus a hotel – you will have to take another hard look at the type of equipment you want to put in.

To get a rough idea of how much a slot machine would cost you, just look at market prices which are going from $ to $25, These are the machines that are built for land-based casinos and, frankly, $ is cutting it a little cheap.

Gaming software alone can cost you $3, and you would need to decide what units you want to get. Usually, the better they are, the bigger their ROI is. Suppliers though do charge dearly for the top-of-the-range machines with some even exceeding $25,

Let’s say that you settle for something in the mid-range and are willing to pay $10, per unit for slot cabinets. This is already $1 million worth of expenditure and may not give you an edge. You also need to factor in what other casinos that you are competing against are offering.

On the flip side, the cost of table games is actually a little better. You can buy a professional blackjack or roulette table for anything between $10, and $15, Then, however, you need a person to staff it, and usually two or three croupiers per table.

Some will feature linked jackpots which are a huge draw. Penny and video slots do have a fair ROI but players tend to gravitate towards games that excite them, and there is nothing more exciting than local area jackpots, nationally linked machines, and more to help you elicit a strong response from potential patrons.

Licensing

Obtaining casino licenses is actually not such a big deal if you have a good source of income and a clear legal record. Licensing costs are surprisingly low as well, as most jurisdictions are keen to attract casinos, create jobs, and get the revenue windfall in tax. Therefore, the licensing fee per se isn’t too steep in comparative terms. Opening a Las Vegas casino will of course cost you a lot more – the average licensing fee(s) is about $,, but this is not just applicable to the casino per se, it extends to various other areas of a casino’s operations.

If you want to operate a casino in New York, however, you have to be prepared to cough up anything between $20 million and $50 million in initial licensing fees, according to the American Gaming Association – ouch.

Next, you also have to think ahead and consider the tax. Some jurisdictions will tax slots and table games separately, and some markets will have much steeper taxes than others (New York and Pennsylvania versus Nevada and New Jersey, for example).

What this means is that you usually need to pay a consultant to help you sort the legalese and get a better understanding of how you can move forward with your project. Licensing fees will not only help you figure out the cost of opening a casino but also whether certain markets are feasible to begin with.

Casinos that are thriving will usually be able to generate a strong ROI no matter what the tax base is, but for someone who is operating on a budget and cannot absorb much risk or debt, the process of choosing a lighter licensing and taxation regime could be crucial.

Costs of Opening an Online Casino

The world we live in has indeed changed and there are many people who are looking for more convenient casino options. This has brought around a boom in online casinos, which have been thriving, especially in jurisdictions where they are authorized.

Now, you may be thinking that opening an online casino is rather easy and it is, but the costs of this can start ramping up. Opening even a basic online casino will cost you in the hundreds of thousands. Starting with $, would be pushing your luck in the very best, as you would need a lot of cash on hand to ensure that you can pay out winning customers.

In fact, some online casinos end up going belly up because customers got lucky in the short run, and the casinos did not have sufficient funds to pay out. You do not want this happening to you as it would tank your investment. What is a good amount of money on hand? It will really depend on the jurisdiction.

Basically, casinos must have at least $, &#; $, worth of cash on hand but this amount may have to be increased depending on the type of products they offer and the revenue they generate. Luckily, these days casinos do not need to develop their own marketing solutions or even platforms from scratch.

Many suppliers will provide you with everything you need to run your casino – the entire platform, and even access to games as part of the package you opt for. They will support and maintain everything to ensure that your casino and players have the best possible experience.

This said this service will definitely cost you. The exact costs are usually kept secret by companies and only shared as part of potential deals. In broad strokes, you need to prepare and pay anything between $10, and $20, for a great software platform along with its maintenance, tools, and functionalities, bringing the cost of running a casino to around $, in terms of software costs a year alone. Staff will also cost you, and you will need to be willing to pay at least $, &#; $, a year, depending on where you live, to be sure that your casino is always taken care of and there are responsible individuals in charge of things.

Then, you need to also account for payment processing costs and marketing which would be another $, each.  So, how much does it cost to open an online casino? Well, it will easily be anything between $ million and $2 million – almost as much as a very small land-based casino!

However, the truth is that you will get some of the best-in-class solutions for an online casino whereas this kind of money will only get you so far when looking at land-based casinos.

Costs of Opening a Riverboat Casino

Riverboat casinos are very much in fashion and they bring patrons a slightly different experience. Instead of traveling up and down rivers, most of these facilities are now stationary and easy to find, but they do cost a pretty penny to open.

For one, you need to buy a boat that fits specific standards – both aesthetically and functionally. The venture could easily rake in significant expenses, but yes – it will generally be cheaper to open a riverboat casino than, say, a land-based casino off the highway.

A good estimate of how much money you would need to spend on a moderate to high-end riverboat casino begins with the cost of the facility (the boat itself) along with the necessary repairs you need to affect in order to get it up and running – after all, nobody is really building boat casinos specifically.

In this case, a rough estimate puts the price tag of anything between $10 million and $20 million. This though is not all you will be paying for. Once again, much like with land-based casinos there is the cost of furniture, equipment and even licensing. Licensees for riverboat casinos aren’t too bad, as they are smaller and pull smaller revenue as well, but they are something to take into consideration.

Operational costs would be fairly high and they can easily eat up to two-thirds of a casino&#;s revenue, especially when you have the extra security to account for on the waterfront and the boat.

There is the equipment again, which will arguably be much fewer units. The average size of a riverboat casino is 30, to 40, square feet on the outside, which means you have much less equipment to pay for and maintain. All in all, riverboat casinos are an approachable if somewhat riskier investment.

Most riverboat casinos exist because of a loophole in the law that prohibits a full-blown land-based casino from launching, but this may change as many jurisdictions are more open to the idea of hosting fully-fledged casinos on the land. You need to factor such future legislative changes in your costs of opening a casino on a riverboat as well.

What Casino Should You Open?

What casino you should open will really depend on how risk-averse you are, what your budget is and what the most sensible option for you is. There is plenty to consider here, from convenience to long-term prospects, to whether you can easily invest in the region.

Would you need to travel out of your way, disrupt your other business affairs, or operate in relevant uncertainty? The investment necessary to open a casino is plenty, and if you are here, this means you most likely have the war chest to explore different options.

Time is sometimes of the essence but when it comes to opening a casino, it does pay off to take your time to weigh all the options and open the casino that is most cost-efficient in the long run.

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