Due to the large amount of capital needed, it can seem daunting to start a casino business. It is expensive to acquire land, licenses, equipment and build new or remodel existing buildings. Your cash-on-hand requirements can exceed $20 million. The idea of opening a casino is feasible, so don’t give up. There are many ways to raise capital or launch your business idea.
Invite an investor to join your board
Finding an investor to help you start your business is one of the best options. Ask your family and friends to recommend someone or hire a consultant. Investors will need to believe that the business will be viable and not lose money. You may choose to invest in a state or a city that has a proven track record of success with casinos. Casinos must be allowed to operate in the state.
Michigan has favorable gambling laws that are helping to make the casino industry flourish. While land-based casinos have been in operation in Michigan since 1997, Michigan’s online casino legalization took place in 2019. There are currently 14 online casinos operating in Michigan, as of January 2021. In total, the gross receipts of the online casinos were $1.2 billion over the first ten months in 2022.
Raise seed capital
Another option for raising capital is seed capital. First, reach out to your family members for seed capital. Next, reach out to close friends, business contacts, or acquaintances. They may be interested in shares of your startup, or you might agree to a favorable repayment arrangement. To maximize your profits, make sure to invest in the best casino games as well as other products. Seed capital has the advantage that you can negotiate better on interest, refund periods, and shareholding.
Borrow money lending services
You can choose to lend money to banks, credit unions or any other type of secondary lender. All paperwork required by the lender must be provided. Lenders will require collateral, which could be your business assets. Lenders have the disadvantage that you must agree to their terms and may not be able to negotiate. A monthly interest payment will be made. While money from lenders is a great solution for starting a business it may not be the best choice to fund short-term expenses.
Crowdfunding is where you approach people you don’t know, but who are interested in investing in your business. You typically approach the internet community to sell your idea. The crowdfunding platform allows anyone to purchase your idea. There may be limits on how much a person can contribute. In many crowdfunding campaigns contributors can invest as low as $10.
There are thousands of investors who could help you raise sufficient capital. As its revenue, the crowdfunding website receives a portion of the money. It is important to be familiar with the laws and restrictions that govern crowdfunding in your state. Investors might not require as much detail as Angel Investors and lending companies.