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How to Start a Casino and Financing Options

You may have enjoyed previous trips to Las Vegas or simple days at the casino. Indeed, many people find casinos to be relaxing places to play, drink, and eat with friends and family. Casinos offer great games, delicious restaurants, and a wide variety of drinks. If you are an entrepreneur and are getting ready to open your first or next business, you might be considering opening up a casino business.

Indeed, this idea has its merits. You may have noticed that casinos can make a lot of money. At the same time, casinos are in a heavily regulated industry. From the games to winnings to the alcohol that you will be serving, you will need to make sure that your casino business complies with existing regulations.

While casinos can make a lot of money, they also cost a lot of money to start. There are many factors that determine the amount of money that it will cost to establish and operate a casino, but you will need to be prepared to cover the costs. One of the ways you might be able to do this is through various financing options for your casino.

If you are interested in learning more about how to start your own casino and the financing options available to you to start your casino, you have come to the right place. In this article, we will focus on standard casino businesses, not online gaming and online casino businesses, and how you can set up and finance your very own casino. We’ll cover the following topics in-depth in this article:

Plan Your Casino

The first step in the process of starting your casino is to plan your casino. Starting a business in the gambling industry and running it successfully requires a lot of forethought. Since you will need to focus on regulatory compliance in the early stages of your casino setup, you need to organize the basic details of your future casino. Ensuring this early compliance with casino industry regulations will improve your chances of getting funding and financing later on.

Investigate Locations

Finding the ideal location is an important determinant of your future success as a casino. The first thing that you will want to do is be sure that the location you are selecting for your casino will allow you to legally open up a commercial casino. You should look through national regulations and state laws that govern your prospective location, as well as any local municipal regulations.

While it might be easier to set up a casino in Las Vegas, Nevada, for example, it may not be as profitable. In Las Vegas, you will likely face stiff competition from other casinos. If you choose to start a casino in an area where there are not many casinos, then you might be able to attract gamblers from that area to your casino.

To some extent, the facilities that you plan on having do matter. You should start to think about the size of your casino and the type of real estate that you will need. This can help you find land and get initial estimates on the prices of real estate for your casino.

The main point is to have a general idea of the place where your casino will be located. This can help you identify your target market, the necessary gaming licenses, and other governing regulations over you as a casino operator for your small business casino.

Do Market Research

Now that you have an idea of the future location of your casino, it is time to do market research on the area for your land-based casino. Your casino market will likely depend on the people in the area, the casino games that you offer, the types of betting that you have, and the unique features of your casino.

You can start market research by speaking to people who live in the area of your future casino and ask them questions about whether they want a casino in their area, what kinds of games they might be interested in, and what types of features in a casino that they might look for.

Aside from gathering data via a survey, you should also do market research on competitors that your casino will be competing against. A lot of this will depend on the location of your casino. If you think about a state like Nevada, with a lot of relaxed casino laws, you are likely to see increased competition. However, if you live in a state with recently legalized casino regulations or not many casinos, your casino might be more popular. You should consider the types of bars, restaurants, and the variety of games that you will offer in your casino. This can help you determine your competition and what makes your casino different from the rest.

Determine Your Casino Layout

Now comes the exciting part! It is time to start designing your casino with the type of games that you want to have. Before you start, you should keep in mind that the more kinds of games and game areas you have, the more funding you will need to start and operate your casino. Casinos can get really big really fast, so it is best to keep in mind that your budget will likely have some restrictions, even if it is assisted by financing.

Common games and betting machines in your casino might include blackjack, roulette, slot machines, baccarat, craps, or other table games. You might also consider incorporating sports betting, wagering, online gambling, or other forms of games into your casino. Consider the number of tables you want to offer with each game. Think about the potential design of the game floor.

You should also consider if you are going to have a bar or restaurant inside your casino. In fact, you might have multiple. You should think about the layout and details of what you are thinking of building, including if you plan on having a hotel adjacent or attached to your new casino. These details will help you understand the critical next step of understanding casino regulations and acquiring the necessary permits and licenses.

Understanding Casino Regulations

The next phase of steps in starting your casino involves familiarizing yourself with existing casino regulations and the permits which will be required for you to operate your casino. The gaming industry is heavily regulated when it comes to betting with money. As such, you should prepare yourself for needing to be compliant with a lot of complicated laws. Keep in mind that these will not be the only regulations that govern your casino’s operations. Various regulations will apply based on all of the business activities conducted at your casino and the facilities you intend to have there.

Commercial Casino Regulations

One of the most basic areas of regulations that govern your future casino is the commercial casino regulations which will dictate the licensing and operating rules of your casino in a territory. States in the United States tend to govern this process differently, so it is best to check with your state’s regulatory agency, their website, and faqs to find the specific details concerning the operation of a commercial casino in your casino’s state. Since these rules can be complex, you might consider hiring an attorney to help you sort through these regulations.

Be sure that you are also assembling the information that you need to apply for any commercial casino-related licenses that you will be required to have in order to operate your casino. Overall, it is important to be compliant with commercial casino regulations so that you can operate a for-profit casino in your state.

Age Restrictions

States that allow gambling restrict a person’s age that can either play or enter a casino floor. Compliance is important to be able to retain your right to operate a casino in your state, and you need to be aware of any restrictions or regulations that you might have to enforce related to the age of people who want to play at your casino.

The restriction on age differs between states, with some having 18-year-olds be able to play while others require that only 21-year-olds and up can play. Some states will not allow people who are less than 21 years old inside a casino, so you need to be sure that your casino is prepared to enforce this regulation and comes up with plans to deal with these requirements.

You should check your state’s laws and the departments governing the gambling industry in your state. Aside from using their website or contacting the relevant agencies directly, you may also consider contacting an attorney to assist you in this process.

Self-Exclusion Regulations

Self-exclusion regulations are another category of rules that casinos need to be able to follow and enforce to operate. Essentially, there is sometimes the need for people who come to a casino to be excluded from being able to come back and play. The casino needs to sometimes be able to allow players to add themselves to this list or have the ability as a casino to add people to the list that the casino deems necessary.

The nature of these regulations will vary based on the state or jurisdiction in which your casino will operate. These are important and go in hand with establishing a well-functioning security team for your casino.

Cash-On-Hand Regulations

Another area of regulations that is important to the lawful operation of your casino will also dictate how much capital you will need to be prepared to have on hand for when your casino opens. Cash-on-hand regulations are essentially the amount of cash a casino needs to have if a winner comes to cash out and make a withdrawal of their winnings.

States have different regulations regarding just how much cash you need to have on hand. This can be pretty expensive, especially for small casinos. This is an especially important area to research before you seek financing, funding, or start your casino generally.

Alcohol Regulations

Your casino is very likely to serve alcohol to its players. As such, you will need to acquire licenses within your state to be able to serve alcohol. This process should be fairly straightforward since there are a lot of businesses that go through this process to be able to sell alcohol. You should also be aware if there are any specific alcohol-related regulations when it comes to players who are drunk and any legally required steps you may need to take.

Starting Your Casino

Once you have ensured that you have become knowledgeable about the restrictions, regulations, and permitting processes involved in starting and operating a casino, it is time to think about starting your casino. There are a few basic steps you will need to take before you can seek financing and get things started.

Cementing a Business Plan

Perhaps the most basic step at this point is to create a business plan for your casino. This business plan will serve as a good guide for investors or lenders to help you get your casino off the ground. It can also help you be more certain of the business opportunity in the location which you selected. Spending time on your business plan can help prevent problems as you begin your operations, and it can provide you with a reference point for how you should operate your company.

What you include in your business plan can depend on many things, but there are some general categories that you should consider researching and making a plan for. This includes sections on a description of your casino, a market analysis of your casino and strategy for it, a casino marketing plan, management and organization of your casino, products, and services offered by your casino, competitive analysis details on your casino, your casino’s operating plan, and financial projections and needs of your casino.

Form Your Business

After you have written your business plan, it is time to form a legal entity to begin raising money, getting financing, and acquiring the permits that you need to run your business. You will need to go through the process of incorporation with a legal structure that can protect you from lawsuits targeting your personal assets.

You will also need to open up a bank account for your business with a financial institution and take out debit cards and credit cards to be able to fund your business setup and continue your casino’s operations. You should consider the payment methods and payment options that you will provide to your customers, including which providers you will go with and whether you will accept crypto as payment, such as bitcoin or other types of cryptocurrency.

During this process, you should strongly consider consulting with an attorney to get any legal help your casino may need in the process of formation. You may also need to provide disclaimers, have people sign waivers, or create other legal documents necessary for the operation of your casinos.

Financing Your Casino

Once you have formed your business and have a business plan and the permits necessary for you to start your casino, it is time to explore the funding and financing that is needed. While you may have a lot of capital or have some equity agreement in place for starting your casino, you might be interested in financing. This financing can help you with the setup of your casino as well as into the early stages of your casino’s operation.

One of the advantages of financing your casino is that you can help protect your equity. Your casino is likely to have a lot of assets, so finding affordable debt should be much easier. We will review a few of your options.

SBA Loans

SBA loans are loans that are guaranteed by the U.S. Small Business Administration (SBA). SBA loans are geared towards small businesses and may be a great idea for your casino if you intend to operate a small casino.

The SBA was established to assist entrepreneurs in achieving success in their small businesses in modern market conditions. One of the challenges that the SBA helps small business owners deal with is the problems involved in finding financing. If your casino is struggling to find financing, in particular, an SBA loan may be right for your casino.

One of the most popular loan programs that the SBA runs is known as the SBA 7(a) loan program. The maximum amount of a loan under this program ranges up to $5 million and can be used for a variety of different purposes, including real estate, construction, inventory, equipment, and working capital needs for your casino. SBA loans typically come with low-interest rates and good repayment terms, such as no fine for prepayment. The SBA is able to offer this by guaranteeing a portion of lenders’ loans to eligible applicants.

If you think that an SBA loan might be able to help your casino, you should consider visiting the SBA website. There, you can learn more about the different types of loan programs that they offer, the application processes, and where to apply.

Term Loans

If an SBA loan is not right for your casino, you might consider a more popular term loan as an option. A term loan, otherwise known as a bank loan, is a great loan option for short-term investments in your casino. You may need to acquire tables, bar equipment, lighting, building supplies, or more, and a term loan is well suited for these needs.

Term loans are an alternative financing option with fixed interest rates that can offer your casino a large amount of money for a variety of funding needs, from real estate to smaller items for your casino. You can get a term loan from banks or alternative lenders (like Biz2Credit!)

If you are interested in getting a term loan from a bank for your casino, you may be able to get lower interest rates on your loan. However, banks usually place a lot more stringent requirements on getting accepted for one of their loans. You will likely be subject to a longer application process and a thorough review of your bank statements, financial statements, credit score, credit history, and more.

If your casino is in need of quicker financing, or financing with less due diligence involved, an alternative lender might be the best option for your casino. The application processes for alternative lenders are quick, less strict, and convenient. To compensate alternative lenders for the added risk with less due diligence, your interest rates may be higher. However, this option may provide more flexibility to your casino during the financing process.

Lines of Credit

While term loans and SBA loans can provide your casino with some of the capital that it needs, you may be looking for something of a different financing structure. For example, as you try to minimize the amount of cash that your business needs to have on hand, an ongoing loan that you could borrow from when expenses come up and pay back cheaply may be what your casino needs. In this case, a line of credit might be what you are looking for.

A line of credit works similarly to a credit card. With a line of credit, a lender will give a borrower a borrowing limit, and a borrower can borrow up to this limit. On the borrowed amount, you would pay interest. Usually, lines of credit are revolving, meaning that you can usually borrow money again once you pay it back. Lines of credit typically come with variable interest rates and are available from banks and alternative lenders. The best option for your business likely depends on your situation with respect to your casino. You should consider getting a line of credit for your casino if you do not want to have a lot of cash on hand past your requirements and want to be prepared for unexpected expenses.

Equipment Financing

Equipment financing may be relevant to your casino, depending on the amenities that you plan on having. Equipment financing refers to loans or leases that you can take out on certain equipment that you plan on using for your business. This might be an oven or stove for your kitchen if your casino has a restaurant, or it might be a refrigerator for your bar in your casino.

In these cases, the equipment serves as collateral in a loan. As a result, your casino can get a low-interest rate loan due to the reduced risk to the lender.

If a loan is not right for your casino for equipment and you would prefer to lease instead, there are also equipment leasing options. These include lease financing, capital leasing, and operating leasing. These options provide you with the flexibility you need to keep, rotate out, or return the equipment that your casino uses.

Opening Your Casino

Now it is time to open your casino. Your funding and financing are set up, and you have a legal structure in place. Now comes the time to execute your business plan.

Since you have your funding, you can enlist the help of a commercial real estate agent to help you select land or property which is right for your casino. Follow their directions and sign on the property that is right for you. At this point, you should begin construction on your casino or renovate the existing property to best suit your needs.

Simultaneously, your business should finalize the acquisition of all of the necessary licenses to operate your casino, the casino’s restaurants, and the casino’s bars. Be sure to check with your local regulatory agencies and your lawyer to ensure that you are up-to-date and compliant with your casino’s intended operations.

You should also keep in mind the need to hire employees for your casino. As you near the grand opening, you should ensure that you are hiring good employees that you can depend upon. Mistakes for a casino can be costly, so you should strive to hire the best employees for the job. Make sure to start the training before you open your doors so your employees can be prepared for the grand opening.

As you near the grand opening, you should begin implementing your marketing plan from your business plan. This might include local advertising, increasing your presence on social media, and general marketing strategies to help drive traffic to your casino once it opens.

That is it! Now you just have to prepare your casino for the grand opening. You should consider inviting entertainment, making exclusive advertising for the opening, and inviting the local community to come and enjoy your new casino. By making your casino’s grand opening a large event, you can spur attraction and attention to the casino among people who might not otherwise know about the opening.

Remember to stick to your business plan as you continue operating. Most importantly, enjoy your new casino business and the results of your hard work!


At Biz2Credit, we pride ourselves on our commitment and dedication to small businesses across the nation and their owners. We show this dedication by providing these business owners with tools and resources to help their businesses succeed. As part of this, we run our Biz2Credit Blog, where we post all the latest information on news, trends, and events impacting small businesses. So, please continue to check back here for all the latest posts.

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