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Hello folks!

I am planning to establish my own gambling casino in the future and I need your help now on conducting a feasibility study for my project.
I want to know what are the factors that can affects/trigger to a casino to go on a sudden Bankruptcy. Personally, I don't have enough managing skills on handling business like this since it is too far to my profession. But I'm very eager to establish my own casino someday.

House Edge.

It is usually not because of house edge that a casino goes bankrupt. The most likely reason is if many of the big whale gamblers managed to win from the casino and their bankroll is less than the earnings of the gamblers. They will have shortage of money to pay up. This news will spread and everyone will end up withdrawing from the casino. This is why a casino will close.

Huge mistake in a algorythm?

From that I know everything you say is hard enough to never achieved, because the one thing that does need to be owned by someone in the casino is to understand and comprehend the function of the casino and also the device. If you want to build a casino but do not understand about the existing system in the casino then the bankruptcy will always be in the hands of you, unless you're working with people who have knowledge and experience in Casino
 

Well casino's do well in the long term. They will make some profit if they keep having players betting on their games, and in the long term they will lose money, and the casino will get some profit. The problem I think, is that players can of course win in the short term, and if you don't have enough coins to support that, or if players just stop playing before you started having profit, then you will probably lose money.

Makes sense enough , also there's a case someone who able to break the house edge.
In other words someone who have an access to the backdoor and do whatever they want include manipulating the outcome.
It happened to primedice , but they have a lot of fund backup luckily.

well i think the main reason that ANY business fails comes from the business owners not being experienced enough and sometimes not having enough luck to get their business going. i have seen so many shops open and never become successful while the same shops open in the same place and become super successful (the luck factor).

but also it is about the owners knowing what to offer, for example if you offer the same Dice site with the same script and everything you can not expect success.

also you shouldn't overlook the effect of advertising. people have to find out about your business and be constantly reminded about it's existence. otherwise the competitors take the field from you easily.

High rollers, big whalers coming on to your casino betting big and winning then immediately withdraw it. Then going back and hit it big again. This is the only likely scenario that I think a casino will go bankrupt.

This is what on my mind too on which a casino goes bankrupt is when there are whale or players do win big amounts and then cash out then come back again.In short a hell of lucky players who do play on your site which would really make you bankrupt if you are a casino owner.Next on my mind when theres an error on breach on security which causes for all funds to be stolen which its a rare case somehow.

Big whales for sure can make a gambling site go bankrupt quickly. And to anticipate it, a gambling site can apply 'max profit' policy to avoid such scenario to happen.

Many casinos have a reasonable policy for how much you can earn relative to the bankroll.  Yolodice I think has a policy that you can't earn more than 0.5% on one bet relative to the bankroll.

With that kind of policy, bankruptcy is very unlikely as there aren't many costs of running a casino.  All you need to do is provide some sort of originality which can support users consistently using your service.

That is why there a max profit limitation or policy because if they wont limit then they would really got easily be bankrupt by those lucky players.Its very rare for a casino or gambling site to be bankrupt because houses are always profitable on the long run thats why gambling industry do still remain and even theres a lot more.

I think three things can trigger bankruptcy;

1. House edge : If you set house edge quite low to attract players, than you may end up losing all.
2. Security loop holes in your script : so its always better to have beta test before launching.
3. Worthless spending on advertising
4. If you just put all of funds in hot wallets.
5. Player's luck and if you haven't set any max win limit, lucky player can simply go away with all your bankroll.

Yes....Money management problems are the most likely reasons a business goes into bankruptcy.  Number 5 above is a big one....pay attention to your bankroll management system....many sites here use variations of the Kelly Criterion....I wouldn't even start the venture without fully comprehending the Kelly.....

It's never worthless to spend money on advertising, I mean you are advertising casino, without good advertising strategy he can't count that people will come to his casino.
Maximum bet limit is what can hold back big whale's and high rollers.
Casino is making money on long run, you need to invest a lot of money in casino and to have money to invest until people start to come and spend money in your casino. That can be for month or a year, but you need to survive and to invest a lot in advertising until you start to make profit.

And besides, spending on advertisement will only constitute only a small portion of your bankroll so this is out of the question. But I agree with the rest of the items. So its will be up to the gambling operator how to mitigate risks and to make sure that it has enough revenue expenses.

You can go on a sudden bankruptcy if you don't set the max bet/win limit, if some high roller come and somehow win, your casino's bankroll will take a huge hit. Offering lower house edge can be both advantege and disadvantage as it will attract more player but can lose many of your bankroll. The last is the security, got hacked and it's over.

From the way I see it, a site can go bankrupt if the fundamental foundation is not taken care of. Bankruptcy does not necessarily means money running out although its a fundamental factor but the angle I am looking at it is from the legal point of view where a site does not even acquire the required licences to run a casino and unfortunately, the authorities look into that direction, the amount that will be spent on lawyers in other to avoid going to jail, can bring the site to its knees.

These are the only ways I know a casino could get bankrupt. First if they found a way to get the server seed. Second, if the casino has bad bankroll management the profits could easily turn around.

I also found an old thread (https://bitcointalk.org/index.php?topic=1141361.0) that talks about the same topic. Hope this helps too.

In addition to what everyone said, the referral system should also be managed carefully and thoroughly. You should make sure that the referral program offers something like 25% of the house edge, instead of the amount of coins waggered.

Will your casino be privately funded or will you allow players/public to invest?
there are many things which could bankrupt a casino, a whale/lucky player, bug/exploit that could make a player continuously win.

The casino is not bankrupt. Always casino has a percentage of the bets. Another thing that you need to attract players, but it does not need to be greedy and the percentage that the casino wins should be the minimum. If the visitors win they will lose interest in your casino.

Most of this is probably already pointed out probably. But, Multiple things can lead for it to go bankrupt. If it is your own funds, then a high roller might wipe you clean(unless you limit bet size). There could be a hacker which could take advantage of  a flaw.

Casino's bankruptcy truly depends on the players' luck that they come up with. There is no other reason that I see as even with the least house edge, casinos could profit much, but the major role that gets played in the situation of anyone's bankruptcy is their luck factor totally.

You need to setup the limit for maximum allowed win per single bet equal to 0.5% of your total bankroll. If you have 100 BTC, players should be allowed to win max 0.5 BTC per single bet, no matter the size of the bet (0.5 BTC with x2 multiplier or 0.05 BTC with x10, etc.). This is the most common reason why casinos go bankrupt - they simply can't cover their loses when some lucky whale gets a win streak, I also suggest you to contact owners of well-established gambling sites to ask more about the business.

That's a very good advice.
I'd like to add that a normal casino rarely goes bankrupt, but it can happen due to some outside circumstances like increased rent, taxes, problems with local government, competition taking over.
A bitcoin casino usually goes bankrupt due to a hack or a bug abuse. It can also happen that it will never gain popularity and die from lack of customers.

Just make sure that you have enough fund for it and since you are going to run your own gambling site for profit then you should have the house edge for it. This can be helpful if you will have to open opportunities for the investors but since you have said that you don't have managing skills on business, it may cause a problem to you.

I think the reason why a Casino get bankrupt is due to these reason:

Poor Management
Incompetent Marketing strategy
Low House Bankroll
Unattractive advertisement
High Rollers winning
Hacks

These are some things why a Casino get banrupt.  You should hire the best marketing strategist and security team.  Games and software are just there waiting to be bought.  And if your initial fund is kinda small, you can open an investment program so people will invest in the bankroll.  You do not have controll over the winners since it is all a chance, you better have a highly fund bankroll.  Security is best to keep hackers away so pay for it.

too much , i can say simply the one with really low fund to operates the casino could lead into a bankruptcy. with good amount funds you can fix the poor management, have a good marketing strategy, have a big bankroll of course , have an attractive interface , have a high level security and many more! am i right?

Some games in casinos can be solve mathematically. There are card counting involve and probabilities. If you're into making a casino you must hire a statisticians, economics engineers, and mathematicians to solve for the best possible chances, rolls, counts to a win a game. Some casinos are letting card countings in the game and some are not. High capable players can make millions if the management of the casino are not careful. Thinking outside or getting rid of the box is needed if you're into business like this because you're dealing with highly capable people. Good luck.

I think additional budgeting in marketing or giving bonuses that people abusing it..
many reason can be say if you start a business with gambling like DDOS attack just to weaken your firewall and hack your database or bitcoin..
That is why those who are starting a business like that they need to hire someone to protect you from hackers..

. Well first, i think casinos lose cuatomers here is when people lose confidence in their processes. Once someone complains about fraud or baing cheated by the house, that would be a huge blockade for any emerging casino. You have to make sure that everything isbtrust worthy because if the current players in your casinos are satisfied with how they are treated, you wouldn't even have to do a lot of advertisements as word of mouth will be your main pull

One should have a good bankroll to maintain any casino well otherwise soon or later they can go bankrupt. Because you can expect some big whales to play and win big amount as well. So if you operate a casino with smaller bankroll surely go under loss. Other factors like marketing, management all come later on.

there are so many different reasons for each of them. some of them are unknown to us. but many are. it can be different with each of them too. but from what i have seen so far in my years of using bitcoin, is that most of them go bankrupt and then go down because they were offering some weird games that nobody wanted to play or knew how to play them!
i have seen at least a couple of them who thought their game was unique, and it was but in a way that nobody wanted it.

I think every professional casino has a banker, programmer and statistician who has a high reputation, they also don't want to take the risk to give up too early due to losing the analysis of its users. But there are cases where casinos go bankrupt because they do not take this into account, especially the new casino and don't have budget for some of the jobs above. But for online gambling even those using bitcoin always hire an expert progammer, before the initial launch of their website.

Main 3 reasons crossing my mind are:

1) Poor Bankroll management
2) Poor Managing skills
3) Poor Security - getting hacked, compromising server seed, etc.

I generally don't think a casino can go bankrupt unless under mismanagement and wants to fail so they just do something stupid such as not pay their customers their winnings or something like this.
Another reason one of the employees is stealing from the company's bankroll.
That is another possibility of it failing and having to file for bankruptcy.

If everything works fine, the casino won't be bankrupt, but some of the casino can bankrupt because of no gamblers trust the site, maybe it's due to the difficult withdrawal process or security reason or the site prove to be rigged or being hacked and lost all of its bankroll

i am agree, remember to have good support system, if you don't know about this, maybe you can hire someone or some people to help you to manage any question or problem from your members, so everything is under control. beside that, don't forget to always take care your member with good and make an event for sometime. if your member is satisfied with your service, i am sure that more people will come into your site and playing the games in there.

The best thing is that , your are planning to do big buisness . Casino is the big buisness in the bitcoin market after the trading .
Here I will suggest you to make better research about handling a bitcoin casino before to start , Because earning in the bitcoin casino is not much simple in the current time it is because the most of the people using new new stretagy to make Gambling , so keep himself well talented in this field before to begin .
Second thing be sure that you have 5-10btc in your wallet Because you will not only win but also loss ( when the gambler won the bet ) .
And a last thing in this business is that you need to make advertisement in this forum , Because without advertisement no much gambler will go to your site .

Trust is the most important every casino should maintain, casinos are meant to be profitable because they have the house edge but a lack of customer service and promotion would lead to bankruptcy. Although the market is big in crypto gambling but the competition is also big, if you are the owner, you have to compete in order to stay in the business. Customers are the lifeblood of the business so you have to take care of them.

I will suggest you to get small study at the Google sites and then just start your business if you have money( or BTC) .
But be careful here that you need also advertisement beside the best casino site , Because if you will not advertise then no more people will came to know about your casino and quality .
Secondly I will advice you for the new types of betting system /Gambling system , Because the gamblers will try to make Gambling at your site with new excited and hopefully they will.loss more and you will make money :) , but here you should be honest to your casino visitors , and never made any even small scam Because trust is a thing which can give success to everyone .

If it is serious to build a casino then the owner must prepare a considerable fund then see which casino has many customers especially in this forum
Then you can provide the same or better service from other casinos Such as the new cassino sportsbet.io and now quite successful have many customers Or directbet.eu they offer many promotions.

Since I saw that this thread cause a great interaction of each member regarding my main goal, I will let this thread open for a while until I gather sufficient information. I already gathered some important key notes and factors based on your opinion and I found it very useful but i'm  on thourough research. But take note that from now on, Please avoid to quote my original post. Just post directly your suggestion to limit text here and easy to read your opinion. Thanks everyone for your time.  ;)

In my opinion, casinos go bankrupt is because they don't have enough people playing in their casino and also they don't have the ability to keep the players playing in their casinos. No gamblers, no money/profits. You have to keep them coming, this is really why casinos are spending tons of money in advertising their site and improving it.

a casino always have a limit to avoid something like break the house and can't pay the player winning , it's a basic matter. the problem with bigger bankroll then bigger chance for a casino to survive from bankruptcy are on how the maintenance cost a lot of money rather than thinking about just how to pay the big winning , it has been set. when your marketing cost too much money than people who play , do you think that kind casino can survive for long time enough?

You're stating about the casino which is just in its beginning phase. For a well established gambling site, the chances for getting bankruptcy will arrive when gamblers are cracking their secrets like hash generation. Yes I'm speaking from the real time scenario (but fortunately PD survived that).

Another real time example is : devs will be misusing hash algorithm which also will lead to bankruptcy.

i agree with you, casino is depend on people that visit and playing gambling in that site, the less people, the casino can not get profit. but to make people stay for a long time, i think the owner must make them satisfied with the service and give something value for the members for example giving some bonus, make an events, or make jackpot prize more bigger to attract more new gamblers.

That is true, I partly agree with LuanX3 here. Why do you think big casinos still do a lot of advertising? Yes, security is really important since if they have a lot of money in their pockets hackers will want to target them. But if they keep on just securing and not protecting their player base then it will decline and no more players will stay.

Dicebitco.in was a great dice site and getting popular but their bet was rigged , that's fatal point for their site
( that's because casino cheating ! )

Some of casino provide unfair or un competitive rate so less people want to play on their site , so the casino can't maintain operational cost anymore

In my opinion casino can go bankrupt if someone hack owners wallets.
If casino has regular players i don't think it can bankrupt in long run.

At fresh start ofcourse you need to minimize the lose of your gambling house setting a limit of maximum deposit whuch you can afford to support if any gambler won a big prize . To be the next is the system or the seeds of your games and lastly the person you hired to manage your casino needs to be trustworthy.

before you launch your casino be sure you have tested every part of the script and closed all exploits
new casinos are hacker's eye catcher

The biggest risk come from the amount of money you are taking on bets versus the amount of capital your casino has, this is why some casinos accept investments from other people that way they protect themselves against this risk, they share the profits but they also share the risks.

From what everyone have typed, the only thing that puts everything together is what I termed 'over-trading' which simply means going above your means can carry and can identify itself in any of the ways that have been said earlier. However, with proper planning and due diligence, I believe up to 98% of the issues can be solved afterall we have sites on this site that have been here for a while and still waxing strong on a daily basis.

That's why most casino have a limit on how much you can win to avoid these kind of risks.
Not only that I think they open the invest option to the public so that they could increase the max payout and to gain trust from the bitcoin gambling community.

One dice site that I know(starts with M and rhymes with lyrical) got robbed by one of their own developer idk why but he did it.  Since he knew the server seeds he used it to determine to possible outcomes of his bets.

I want to plug here a breaking news. Satoshidice is a scam site due to transparency issue and disappearing almost a hundred BTC. So keep away on that site guys. I think transparency issue gives also an impact for the profitability of a casino. Because once a casino is transparent, Then a lot of players will be tempted to play without any worries.

Where are you getting this info from?
Those are serious allegations

Good thing I withdraw some of my coins from there  :o
It's megadice now too :P

We'll some Casino's get bankrupt because of Professional gamblers but some are scams from the casino's machines and some are the gamblers because its rigged.

Many factors that I can conclude, starting from the unpreparedness of the system / server that can not be more intelligent than the tricks users do, lack of capital, and even corrupt developers trick the owner by becoming a gambler who knows everything about gap of system. But casinos that have been through more than 3 years would have survived from things like this.

yeah right if players/gamblers found something which benefits them to take advantage like script which can make the house being bankrupt if the house is un-prepared from this surely they will face bankruptcy as many players will follow and use it. that's the reason why most house keeps doing updates to avoid such things like this.

If you are a casino/gambling site owner you should really focus on this thing related to site bugs or security flaws because this is the one would really bankrupt  you up if you dont focus on these things. Always be prepared and set all thing up well organized/bug-free before launching the site or open the site to public but exploited cases are very very rare to happen.

Plenty of reasons are on the board.
One of the main reasons that will make casino go bankrupt is that some of the casinos open their doors without having a decent stash, which means that if someone gets really luck the casino may lose the complete stash and won't be able to process any more bets.

Another good reason is that some casinos have security flaws, and may lose money just because someone hacked their site.

I'm now going to close this thread to avoid sam on future. Thanks for all your effort on giving a opinion. Your help was really appreciated. ciao!