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Why Do iGaming Start-ups Fail?

Like in every sector, numerous iGaming start-ups fail every year. From the outside, launching an online casino or sportsbook business seems straightforward, particularly given that several white-label operators give companies a market-ready platform.

Yet failures are common, so we wanted to dig a little deeper to learn about the biggest mistakes many people make.


We spoke to IGAMINGHUNT CEO Tanya Shevchuk for insight into what causes iGaming start-ups to fail, and she was happy to share the following revelations.


Underestimating total costs

Budget planning and cost management are central to any start-up, and iGaming firms are no exception. Founders often miscalculate the cost of launching an online casino, and unexpected costs crop up in the initial stages of the launch.

The costs associated with building the platform, assembling a qualified and highly skilled team, player acquisition and retention, legal costs, content, and much more must be considered.


Shevchuk explains: “We had two clients who ran into significant financial trouble because they focused too much on creating attractive designs and new features, neglecting to allocate sufficient funds for marketing and building traffic.

The result? They ended up with a beautifully designed product but almost no users, first- time depositors, or revenue. To keep the project afloat, they had to sell 50% of their stake to external investors to secure the necessary funds.”


Undervaluing the importance of qualified team members

Some new online gambling firms attempt to cut costs by hiring inexperienced staff who don’t have a track record of delivering at the required levels. The results are usually dire when start-ups put their faith in junior staff to perform senior roles.

While it can seem daunting to allocate a significant proportion of your initial budget to staff costs, undervaluing the importance of qualified team members is a mistake many iGaming start-ups don’t recover from.

Though the initial cost of recruiting junior, inexperienced staff is lower, the long-term costs can be up to three times as high, given that you will spend a lot of time and money trying to fix mistakes that could have been avoided in the first place.


The resources required to train, educate, and eventually replace your junior employees are another thing you should think about if you’re considering cutting corners at the start of your journey.


As Shevchuk says from experience: “In the long run, it’s more cost-effective to hire professionals at market rates to ensure high-quality results.”


This issue especially applies to the iGaming sector, which requires extensive specialist knowledge across product, marketing, and regulatory functions.


Pursuing perfection

Another mistake many start-ups make is aiming for perfection right out of the gate rather than testing, reviewing, and evolving their operating model. The most successful firms embrace lean start-up methods and tactics, acknowledging that a company’s first iteration will likely be far from perfect.

Rather than spending years and tens of thousands of dollars preparing a product for launch, it’s much better to get a “lite” product off the ground and into the market, which you can test and refine as you receive customer feedback.


You can also use revenue generated from the site while it’s live to invest in further improvements, which will drive your iGaming start-up forward in the long run. Shevchuk warns: “Perfection is irrelevant if no one is using your product and it’s generating zero revenue.”


Spreading too thin

Also common within the sector is that companies spread themselves too thin. Undoubtedly, there are many potential strings to an online gambling site’s bow, including an RNG casino, live casino, sportsbook, affiliate program, and numerous other income-generating opportunities.


While creating numerous revenue streams is a positive step for established companies, focusing on too many options from the start spreads new iGaming firms too thin, causing them to fail with their core offering.


As Shevchuk points out: “We’ve seen this first-hand with three clients who learned this lesson the hard way and eventually decided to focus on making one product successful before expanding.”


The idea of concept dilution is worth considering here. Rather than diluting your initial offering with several ideas to grow your business quickly, focus on what makes your concept unique and valuable. Growing your company’s concept and cementing your place within the sector is crucial as a starting point, and you can always add more revenue streams as your company grows.


Lack of industry knowledge

From the outside looking in, opening an online casino seems straightforward. Many investors outside of the igaming industry often think they can throw a relatively small amount of money, perhaps $50,000, at a white-label casino and sit back to watch the profits roll in. The reality is that this lack of industry knowledge causes so many online casino start- ups to fail.


Without sufficient knowledge of the sector's complexities, regulations, rules, and requirements, it’s extremely difficult for a casino or sportsbook to rise to the top of the pile. Shevchuk expands on this point: “Without a deep understanding of the industry, its rules, competitors, and trends, and without proper planning, they risk throwing their money away.

In truth, you need much more than $50K to make it in the iGaming world.”


Conclusion

The iGaming sector is undeniably an attractive segment of the gambling market to get into, with many countries and states adopting favourable laws and regulations to support the establishment of online casinos and sportsbooks.

But as Tanya Shevchuk warns, if you want your website to be successful, you must avoid the all-too-common pitfalls that many start-ups fall into.

For more tips on how to get started in the world of iGaming and for support with recruitment and talent acquisition, contact IGAMINGHUNT today.

Why Do iGaming Start-ups Fail?

By IGG • August 27, 2024
Like in every sector, numerous iGaming start-ups fail every year. From the outside, launching an online casino or sportsbook business seems straightforward, particularly given that several white-label operators give companies a market-ready platform. Yet failures are common, so we wanted to dig a little deeper to learn about the biggest mistakes many people make. We spoke to IGAMINGHUNT CEO Tanya Shevchuk for insight into what causes iGaming start-ups to fail, and she was happy to share the following revelations. Underestimating total costs Budget planning and cost management are central to any start-up, and iGaming firms are no exception. Founders often miscalculate the cost of launching an online casino, and unexpected costs crop up in the initial stages of the launch. The costs associated with building the platform, assembling a qualified and highly skilled team, player acquisition and retention, legal costs, content, and much more must be considered. Shevchuk explains: “ We had two clients who ran into significant financial trouble because they focused too much on creating attractive designs and new features, neglecting to allocate sufficient funds for marketing and building traffic. The result? They ended up with a beautifully designed product but almost no users, first- time depositors, or revenue. To keep the project afloat, they had to sell 50% of their stake to external investors to secure the necessary funds. ” Undervaluing the importance of qualified team members Some new online gambling firms attempt to cut costs by hiring inexperienced staff who don’t have a track record of delivering at the required levels. The results are usually dire when start-ups put their faith in junior staff to perform senior roles. While it can seem daunting to allocate a significant proportion of your initial budget to staff costs, undervaluing the importance of qualified team members is a mistake many iGaming start-ups don’t recover from. Though the initial cost of recruiting junior, inexperienced staff is lower, the long-term costs can be up to three times as high, given that you will spend a lot of time and money trying to fix mistakes that could have been avoided in the first place. The resources required to train, educate, and eventually replace your junior employees are another thing you should think about if you’re considering cutting corners at the start of your journey. As Shevchuk says from experience: “ In the long run, it’s more cost-effective to hire professionals at market rates to ensure high-quality results. ” This issue especially applies to the iGaming sector, which requires extensive specialist knowledge across product, marketing, and regulatory functions. Pursuing perfection Another mistake many start-ups make is aiming for perfection right out of the gate rather than testing, reviewing, and evolving their operating model. The most successful firms embrace lean start-up methods and tactics, acknowledging that a company’s first iteration will likely be far from perfect. Rather than spending years and tens of thousands of dollars preparing a product for launch, it’s much better to get a “lite” product off the ground and into the market, which you can test and refine as you receive customer feedback. You can also use revenue generated from the site while it’s live to invest in further improvements, which will drive your iGaming start-up forward in the long run. Shevchuk warns: “ Perfection is irrelevant if no one is using your product and it’s generating zero revenue. ” Spreading too thin Also common within the sector is that companies spread themselves too thin. Undoubtedly, there are many potential strings to an online gambling site’s bow, including an RNG casino, live casino, sportsbook, affiliate program, and numerous other income-generating opportunities. While creating numerous revenue streams is a positive step for established companies, focusing on too many options from the start spreads new iGaming firms too thin, causing them to fail with their core offering. As Shevchuk points out: “ We’ve seen this first-hand with three clients who learned this lesson the hard way and eventually decided to focus on making one product successful before expanding. ” The idea of concept dilution is worth considering here. Rather than diluting your initial offering with several ideas to grow your business quickly, focus on what makes your concept unique and valuable. Growing your company’s concept and cementing your place within the sector is crucial as a starting point, and you can always add more revenue streams as your company grows. Lack of industry knowledge From the outside looking in, opening an online casino seems straightforward. Many investors outside of the igaming industry often think they can throw a relatively small amount of money, perhaps $50,000, at a white-label casino and sit back to watch the profits roll in. The reality is that this lack of industry knowledge causes so many online casino start- ups to fail. Without sufficient knowledge of the sector's complexities, regulations, rules, and requirements, it’s extremely difficult for a casino or sportsbook to rise to the top of the pile. Shevchuk expands on this point: “ Without a deep understanding of the industry, its rules, competitors, and trends, and without proper planning, they risk throwing their money away. In truth, you need much more than $50K to make it in the iGaming world. ” Conclusion The iGaming sector is undeniably an attractive segment of the gambling market to get into, with many countries and states adopting favourable laws and regulations to support the establishment of online casinos and sportsbooks. But as Tanya Shevchuk warns, if you want your website to be successful, you must avoid the all-too-common pitfalls that many start-ups fall into.  For more tips on how to get started in the world of iGaming and for support with recruitment and talent acquisition, contact IGAMINGHUNT today.

What are the most wanted jobs in UAE’s iGaming sector?

By IGH • July 2, 2024
Many iGaming firms now see the UAE as the ideal location for operations. The standard of living, tax benefits, and employment perks attract top talent worldwide willing to relocate for highly paid roles in the sun. To understand the evolving and blossoming online gambling sector in the UAE, we asked Anna Bezsmertna, the Head of Recruitment at IGAMINGHUNT , to offer their expert opinion by giving detailed answers to the following questions. What are the main iGaming roles available in the UAE? Among the most sought-after roles in the UAE’s iGaming sector are those related to marketing activities , mainly targeting Middle Eastern markets. As the iGaming market expands, companies need strong marketers to navigate competitive landscapes and devise effective campaigns that resonate with local audiences. Expertise in digital marketing, market research, and consumer behaviour is crucial for driving growth, which is why Heads of Marketing and Marketing Managers are in demand. Affiliate marketing is a cornerstone of the iGaming industry’s customer acquisition strategy. Affiliate professionals must identify and partner with key influencers and websites that can bring in high-quality traffic, making this role critical for business expansion. Sales Managers are crucial in expanding market reach and securing new business opportunities. Their ability to negotiate and close deals directly impacts the company’s bottom line, making them indispensable in a competitive market. Understanding regional nuances is vital as the industry grows in the Middle East. Country Managers bring local expertise, helping companies navigate cultural and regulatory landscapes while driving regional growth. Strong client relationships are fundamental to business success. Account Managers ensure customer satisfaction and loyalty, essential for long-term growth and stability in the iGaming sector. With sports betting being a significant component of iGaming, knowledgeable Sportsbook Managers are important for developing competitive and engaging betting options. Sports betting is widely popular in Indian and African markets, contributing to the high demand for these specialists in the UAE. Their expertise is crucial in ensuring that the sportsbook remains attractive to users and profitable for operators. Why is hiring in the UAE attractive for the iGaming sector? The UAE’s geographical position is a strategic “middle point” for African and Asian countries, including India. This makes it an ideal hub for businesses keen to tap into these growing markets. The connectivity and ease of travel between these regions facilitate smoother operations and business expansions. Most iGaming companies prefer to establish their base in Dubai , thanks to its advanced infrastructure, business-friendly policies, and cosmopolitan lifestyle. Dubai offers a vibrant, innovative atmosphere that attracts top talent from around the globe. While Dubai remains a focal point, Abu Dhabi also presents significant opportunities. The capital city offers a less congested environment with excellent facilities, making it an attractive alternative for companies and professionals seeking a more balanced lifestyle. One of the most compelling reasons professionals are drawn to the UAE is the absence of personal income tax . This allows employees to maximise earnings, a significant lure for top talent, particularly in high-paying sectors like iGaming. The UAE’s Golden Visa program offers long-term residency options for skilled professionals, investors, and entrepreneurs. This initiative provides stability and security, encouraging top-tier talent to relocate and commit to long-term careers in the region. The Golden Visa also improves the UAE’s appeal as a career advancement and personal growth destination. The UAE is known for its diverse and inclusive workforce , which brings together professionals from various cultural and professional backgrounds. This diversity fosters creativity, innovation, and a dynamic work environment, essential for the fast-paced iGaming industry. Each of the Emirates boasts state-of-the-art infrastructure , including high-speed internet, modern office spaces, and excellent transportation networks. These facilities support efficient business operations and enhance overall productivity. The UAE also offers an exceptional quality of life , with luxurious housing options, top-tier healthcare, international schools, and a wide range of leisure activities. The attractive lifestyle is significant in drawing skilled professionals to the region. Finally, the UAE government has implemented various pro-business regulations and incentives to attract foreign investment. These policies provide a stable and supportive environment for iGaming companies to thrive and expand their operations. What bonuses do iGaming companies offer in the UAE? The incentives offered to iGaming employees in the UAE go beyond just a competitive salary; they create a comprehensive package designed to improve employees’ overall well-being and job satisfaction. Anna reveals some of the bonuses iGaming employees can access: Many iGaming companies provide a generous accommodation allowance , helping employees cover the cost of living in the UAE. This benefit alleviates the financial burden of housing, making it easier for expatriates to settle in and focus on their professional responsibilities. To facilitate a smooth transition for international hires, iGaming companies often assist with obtaining relocation visas . This support includes handling the necessary paperwork and covering the associated costs, ensuring new employees can relocate with minimal hassle and start their new roles promptly. Providing comprehensive healthcare benefits is a standard practice among iGaming companies in the UAE. These benefits typically cover medical, dental, and sometimes optical expenses, ensuring employees and their families can access quality healthcare services. Many companies also offer coverage for transportation expenses , whether through monthly allowances or company-provided transport. This perk reduces commuting costs and improves convenience, improving employees’ work-life balance. Attractive bonus schemes based on company performance are also a significant draw for professionals in the iGaming sector. These bonuses reward employees for contributing to the company’s success, fostering a culture of achievement and motivation. Performance-based bonuses can significantly boost overall compensation, aligning employees’ goals with the company’s objectives. Although base salaries in the UAE’s iGaming sector align with current recruitment trends and market realities, they remain appealing. While not as high as in previous years, these salaries are still competitive , especially when supplemented with comprehensive benefits packages and the region’s significant tax benefits. This combination of wages and perks makes employment in the UAE’s iGaming industry highly attractive for professionals seeking a rewarding career. Beyond the standard bonuses, many iGaming companies provide additional perks such as gym memberships, wellness programs, and professional development opportunities. These benefits contribute to a healthier and more balanced lifestyle, promoting long-term employee satisfaction and retention. Is iGaming regulated in the UAE? The UAE is poised for a significant transformation in the gaming industry. New regulations to formalise and govern online gaming activities will likely be introduced soon. This regulatory framework will create a more structured and secure environment for operators and players, improving trust and credibility within the market. Upon accepting these regulations, the UAE’s iGaming market will see heightened demand for new specialists, particularly in legal and compliance roles. This presents a tremendous opportunity for professionals in these fields to contribute to and shape the burgeoning sector. As the UAE positions itself as a hub for technological innovation, investment funds increasingly view it as a promising destination for their capital. Over the next five years, many start-ups are anticipated to be launched in the online gaming, Web3, crypto, and blockchain spaces. These start-ups will leverage cutting-edge technologies to improve gaming experiences and contribute to diversifying the UAE’s economy. What are the particulars of employment within iGaming in the UAE? Many companies operate on a six-day workweek , typically with Friday (the holy day in Islam) being a half-day or the day off and Saturday being a regular working day. That said, some companies have adopted a five-day workweek , often from Monday to Friday, aligning more with Western practices. The standard working hours are eight hours per day, 48 hours per week. During Ramadan, working hours are reduced by two hours per day. The COVID-19 pandemic accelerated the adoption of remote work policies ; however, most companies now prefer to return to office work or offer hybrid work arrangements. Employees who complete one year of service are entitled to 30 calendar days of annual leave. Those with less than one year of service are entitled to two days of leave for every month worked. There are several public holidays , including Islamic holidays (Eid Al Fitr, Eid Al Adha) and national holidays (such as UAE National Day). Professional attire is generally expected in the workplace, with a preference for conservative clothing in line with local customs. Communication tends to be more formal and polite. Direct or confrontational communication styles that might be acceptable in some European countries are often avoided. Given the expanding job market and the numerous firms looking to recruit in the UAE and the Middle East, now is an exciting time to look for work in Dubai and Abu Dhabi. Discover the latest Middle East jobs available via IGAMINGHUNT and rely on industry expertise to find your dream role in iGaming.
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