Online casinos offer a number of advantages and disadvantages relative to traditional casinos. We briefly discuss some of these advantages and disadvantages from an operator’s perspective and from a customer’s perspective.
From an operator’s perspective, it is fairly easy to get an online gaming license and online casinos cost substantially less than traditional casinos. Because the costs of building a physical casino are avoided and labor costs for ongoing operations are minimal, online casinos generally have higher profit margins and a higher ROI than traditional casinos. However, there are virtually no barriers to entry in the online gaming business so competition can be intense. Online casinos can be perceived as commodities, and the marketing costs to build a brand can be substantial. In addition, online casino operators face significant uncertainty about the law as it applies to online gambling.
From a customer’s perspective, online gaming is convenient (even though the online gaming experience can be cumbersome due to bandwidth constraints and other factors) and online gaming is generally viewed as less intimidating than gambling at a traditional casino. However, online gaming lacks many of the social aspects of gambling at a traditional casino (most online casinos do offer chat rooms and other features to make online gaming more social). In addition, concerns about integrity of the games, creditworthiness of the operator, privacy, and reliability of payment systems are all magnified for customers of an online casino.