What Leads Casinos To Fail?

Launching a new casino is difficult. In fact, it’s one of the hardest jobs anyone will ever do. Getting the balance right between a fun, attractive casino and an asset to the local community is tricky – and this goes for online casinos too.

Whether it’s a famous highstreet gambling house, or one of the best online casinos in the UK, the path to success is long and arduous. Some achieve it and become household names. Others fall by the wayside.

In fact, most casinos fold. The UK has seen a 4.6% decrease in active gambling licences in the past year, while new verified online mobile casinos have tapered off in recent years too.

The reason? One argument is it’s an over-saturation of the market. Or maybe it’s savvy players knowing which casino to choose, and sticking with their choice.

Of course, there are also big barriers in the way of new casinos that are trying to make an impact in the UK. To become a top live casino with elite-level tables and a regular clientele takes time, effort, money and a good dose of luck.

Here at Top Mobile Casino we deal with these successful establishments. Our independent reviews take a look at each online casino and figure out why they’re so good. Likewise, other review sites do the same for highstreet casinos, so you can be sure to pick the right one when seeking to place a bet.

London’s Hippodrome is perfectly placed to attract casino-goers

But what about the ones that fold early? Here are the obstacles casinos face when deciding to launch in the UK…

Start-up Costs

The bill for setting up a highstreet casino runs into tens of millions of pounds, and research from TMC has found it costs around £1.9m to launch an online casino and run it for a year. That’s a lot of money. Founders need to get investment from the beginning and promise a healthy return. This isn’t an easy sell – after all, gambling is dominated by big firms in London, Vegas and Macau, so how will you compete with them?

The answer: start small and don’t go all-in. Even a single small casino needs money though, and a new establishment also must have a buffer in case they lose big. What if a gambler comes in and wipes the house clean? That’s the risk casinos cannot afford to take.

But it’s not only the cost of serving bets, and subsequent tax, that new casinos need to worry about. Building a casino is costly, and fitting it out even more so. That’s why so many casinos form part of a hotel resort – but if you’re thinking of building a hotel and casino then it’ll likely cost you £200m, plus land acquisition.

And that’s all before the first roulette wheel is spun!

From a financial aspect, many casinos never truly achieve their potential and end up folding. You can go bust if the bank decides it wants its money back, or if a player hits the jackpot, and so the gamble for casinos never truly goes away.

Marketing

American online sports betting brands will tell you that marketing is the costliest part of their trade. Over in the United States the land grab for market supremacy in New York, New Jersey and Michigan has cost sportsbooks billions of dollars.

If you’re building a online casino from scratch, or plan to launch an online casino, then you perhaps won’t need as much money as FanDuel or Caesars. But an effective marketing strategy does cost a lot.

We’re talking millions of pounds in TV, online and newspaper advertising. Paying celebrities to endorse your casino on social media. Launching marketing campaigns. Getting attention in any way possible.

Fail to grab attention and you don’t get customers. If no-one comes to your casino or downloads your casino app, you won’t make money. And very soon you can fold. This is what happened to Sunbets, which lasted barely a year before shutting down in 2018. No-one took interest and it lost a lot of money.

Location

A successful land-based casino needs to be in a prominent location – and there are two types. One is the out-of-town mega resort common in America or off the Las Vegas strip, where people drive to the casino and spend a week enjoying all the other entertainment facilities too.

The other is on a busy highstreet, such as off Leicester Square in London or along the Atlantic City boardwalk. Here you’ll likely attract dedicated casino-goers and tourists, and potentially build an impressive clientele.

But get the location wrong and no-one will turn up. Genting opened a casino in Torquay but found it impossible to attract enough players, as the site was too far away from the main town. The casino closed in 2021 when the Covid-19 crisis made it an even more unavailable investment for the casino chain.

Law

Running a casino business is fraught with legal issues. For a start, you need to make sure you get a casino operating licence and are permitted to host the games you want in your establishment.

This requires a lot of work, manpower and money to get right. Once you have your licence you’ll be checked regularly to ensure you’re not breaching the terms. Any breaches can lead to fines and, in the worst cases, having a licence revoked.

Scores of new sites fall foul of the UK Gambling Commission. In fact, the UKGC has issued £160m worth of fines since 2016. Many others toe a tight line and are occasionally wrapped on the knuckles.

Governments can also change their legislation and decide they don’t want a casino industry anymore. If this happens you might have no other choice but to close – even if you’ve spent millions of pounds preparing your casino for the grand opening. This is the risk casino operators in Macau are dealing with right now. If they don’t bow to China’s new licensing laws then they’ll lose their property – a threat that has led many to pledge more than $1bn in investments over the coming decade.

Criminality

Part of the issue around the legality of casinos is the criminality which the industry can sometimes attract. A new gambling website is particularly suspect to criminal attention because safeguarding processes are new, and possibly untested.

New gambling sites therefore need to be vigilant to prevent money launderers and other criminals from infiltrating their establishment. It’s a headache some Australian casinos are currently suffering.

Otherwise they could gain a reputation of being a crime centre – and that will deter normal players from gambling at their premises.

Societal Change

Societies change and sometimes a local community just doesn’t want a new casino. We saw this recently in Canada, when the Alberta Gaming, Liquor and Cannabis Commission decided against Capital City Casino’s application to open in Edmonton, thanks to local opposition and a lack of positive interest.

If a casino wins a licence to set up in a town, but the locals don’t want it, then said casino could be short-lived. New online casinos therefore spend a lot of time and energy getting to know local populations, pledging to give to local charities and causes, and showcasing why they can be a force for good in the community.

Would You Go All-In?

So, here we have it – a fair few good reasons why casinos fold early in their lifetimes. But that doesn’t mean every casino goes bust. In fact, some of the most successful casinos of the modern era only launched a few years ago. Just look at FanDuel and Entain!

The rise in available online new casinos has transformed the industry, and casino gameplay is now more popular than ever. This means new operators have a real chance to thrive as players are keen to see what they have to offer – so long as they get the basics right. Budget, location, marketing and legals all need to be conquered. Do this, and you stand a chance.

Still interested in the casino industry? Check out and play popular casino games from TMC’s trusted partners today, and see what you’re missing!