Casino Business Plan

Business Plan Articles

If you are starting a casino, it is likely that you will require a business plan at some point. The experts at Pro Business Plans have extensive experience working with online and offline casinos to prepare plans for investment and strategy. This article provides information on what is included in the plan and how it is structured.

Casino Business Plan

There are several things to consider when planning for a new casino including the location, business model, and other supporting amenities. For instance, a casino with a hotel and live entertainment would be strikingly different than one that operates exclusively online. While both may be equally lucrative, there are unique risks and benefits associated with each business model that investors will consider. The purpose of the plan is to organize information related to the unique aspects of your Casino as reflected in the business model and estimated in the financial projections.

Business Model

The business model for a casino is based upon several factors. It is not always about the payout ratio for casinos, as some drive visitors in with other amenities such as a fun atmosphere, elegant perks, and outstanding live entertainment. Others may operate a leaner business model to in fact focus on the payout levels. Online casinos for instance, have much lower overhead and can afford to adjust their payouts to have the same margins as illustrious brick & mortar casinos, in order to generate higher visitor returns.


Positioning

The positioning of a casino can vary wildly and the importance of its positioning depends upon the competition. For instance, a casino that operates in Las Vegas will need outstanding positioning due to the highly competitive nature of the market. In contrast, a casino that is the first within a metropolitan area, may only need to have a full gaming operation in order to be successful. Nonetheless, there are many cross-selling opportunities for casinos that are included into the positioning. Popular revenue streams include entertainment, food & beverage, lodging, and souvenirs.


Location

When it comes to a brick & mortar casino in a competitive environment, few things can overshadow the importance of a great location. The difference of having a beach front casino and hotel relative to one located in a working class residential area can be substantial. Therefore, it is critical that the location balance price and accessibility with some degree of luxury and prestige. Purchasing the most expensive building will require low payouts and be high risk, so finding an appropriate balance is almost always the optimum solution.


Marketing Plan

The marketing plan of a casino must be very careful to not violate policies and laws depending on the state that it operates in. For instance, Google AdWords and Facebook PPC prohibit advertisements related to gambling. Promoting any online gaming can also be problematic of gambling is prohibited within a certain area by online users. Because of this, many casinos are very careful about how they promote and where they promote as to not cause conflict and avoid tension with regulators. Regardless, a plethora of marketing options exist for casinos that remain within their arsenal for implementation. Investors will want to know what marketing channels are being utilized and have confidence that none are in violation of state or national regulations.


Mass Marketing

Many casinos, due to their large budgets, often promote using mass marketing on regional television channels and billboards. Some may also form strategic partnerships with travel agents and tourism agencies. The nature of a mass marketing campaign depends upon if the casino is targeting regional companies or if it targeting tourists. For instance, the casino may place billboard advertisements along a major highway going into the city that suburban residents commute on. However, it may target placement of brochures in hotels and concierge services if it is targeting the tourist demographic.


Digital Marketing

The digital marketing a casino can always be a bit tricky. Most online advertising is done through platforms like Google AdWords, Facebook, and Bing advertising programs. However, these platforms have policies in place that restrict promotions related to gambling. Even so, there are many companies that may be approached directly and are very receptive to promoting gambling. Websites such as these must be approached directly with deals negotiated with the internal market teams opposed to intermediate marketing platforms in order to avoid compliance issues.


Financial Projections

The financial forecasts for a casino will essentially diverge under two circumstances based on whether the casino is online or offline. If it is offline, its size will be shaped by its location and capacity. Once this has been determined, the most effective way to form financial projections is based upon prior operation history with an analysis of comparable casinos. For instance, if you have 100 slot machines and 600 hotel rooms, the financial performance of similar sized casinos would be analyzed in order to form an estimation.


Revenue Projections

The revenue projections for a casino can be based on a variety of detailed assumptions including the revenue per customer, the payouts of the machines, and the forecasted annual visitor demand levels. If there are multiple revenue streams such as entertainment, gaming, and lodging, then it is conservative to separate these forecasts in order to demonstrate their individual cost of goods sold.


Budget Forecasts

The budgeting for a casino can depend upon many factors. If the casino is new and needs to be built-out or acquired, then using quotes from reliable third party construction and real estate appraisal firms will be most advantageous. Most investors will either determine the appropriateness of the budget based upon the acquisition of quotes by third parties or based on a comparable analysis of the cost to construct other casinos. The specific details of the budget depend upon several factors that you will need to consider and be very conservative about such that you strike a balance between having adequate capital, but not asking for far too much than is relevant.


What is Included in Our Custom Casino Business Plan?


  • Marketing Plan
  • SWOT Analysis
  • Competitive Analysis
  • Profitability Analysis
  • Personnel Plan
  • Organizational Chart
  • Company Valuation
  • Executive Summary
  • Company Description
  • Keys to Success
  • Three Year Objectives
  • Product or Service Description
  • Market Research
  • Fundraising Support
  • 12 Month & 3 Year Profit & Loss
  • 3 Year Balance Sheet
  • 12 Month & 3 Year Sales Forecast
  • 12 Month & 3 Year Cash Flows
  • Break-Even Analysis
  • Financial Ratio Analysis
  • Management Team

Speak With An Expert advisor about your plan at (877) 810 - 4172