Effective Pricing Strategies in the Gambling Industry

Experts of the CASEXE studio reveal the secrets of forming the cost of services for different market participants: developers of casino solutions, software vendors, and operators.

What is a Pricing Strategy

This is a set of rules, techniques, and tools for setting fair prices for specific types of options and tools offered by iGaming companies.

Philip Kotler, an American economist and publicist, noted:

If the product is the heart of an advertising campaign, then the price is its lifeblood.

The statement is true for many sectors of the economy, including gambling.

Such a concept plays an important role in any business. Without it, it will be difficult for brands to combine their expenses and income, correctly calculate profits, as well as identify steps toward the project’s improvement.

The main objectives of the pricing strategy:

• gaining a larger market share (both within the country and in new jurisdictions);
• diversification of activities;
• maximisation of current profits;
• stabilisation of the price level so that the company takes (or maintains) the desired position in the market;
• business survival.

An effective policy is aimed at achieving a balance between customer acquisition, the increase of revenues, and assurance of profitability of the iGaming project. It also qualitatively affects the brand perception by players, as well as the improvement of its position and recognition in the industry.

Proper use of the tool makes advertising campaigns more successful. Knowledge about the competitive environment and demand provides an accelerated response to changes in customers’ behaviour.

Basic Pricing Rules

Let us consider the nuances that should be taken into account when choosing the right strategy:

1. All costs must be covered. We are talking about the product, infrastructure, and personnel.
2. The price must be attractive. Understanding the client base, its preferences, and limitations (budget, time, and sizes of bets) allows entrepreneurs to create more profitable gambling solutions.
3. All tools and services offered should be affordable to the audience. It is important for casino visitors to feel that they have received a commensurate benefit for the bids they placed. A similar situation can be observed in the B2B sector. Here, operators must know that the proposed service cost (for example, the supply of payment software) fully corresponds to its configuration and other characteristics.

The best way to offer a lower price is to reduce expenditures. Companies should implement innovations that offer a good alternative to traditional budgeting.

To reduce the cost of products and services, it is worth using tax deductions and incentives, purchasing a package of games from one provider, obtaining a licence in a country with lower government fees, and much more.

Strategies of Casino Game Developers

Entertainment content is the basis of any gambling platform and the industry in general.

In 2024, players prefer digital slots, arcades, fishing and table games, video poker, and other products. In the creation of most options, standard formation of the value is used.

Competitive Pricing

In this case, the decisions of other market participants are taken into account. After that, content developers can determine the cost of each slot, higher or lower than the selected indicator.

The strategy is suitable for brands working in a highly competitive niche. A striking example is the release of fruit-themed solutions. They are extremely popular with casino visitors, and every second software vendor presents such releases. Most of them form the cost based on the offerings of other manufacturers, and only a few show an original approach to this issue.

Competitive pricing can be used when choosing the technical characteristics of a slot machine:

• the minimum and maximum value of a spin;
• the denomination size;
• the number of pay lines, etc.

All these parameters affect the RTP (return rate) and the profitability of online casinos.

Setting prices based on the examples of other market participants is used in the case of the development of most slots with a linear structure of winning combinations. These are video games with themes related to animals, myths, fairy tales, and oriental traditions.

The exception is solutions with original mechanics (such as Megaways or Hold&Win functions) and support for progressive jackpots.

Skimming Strategy

Under this approach, companies present the latest release at a rather high starting price. As the market becomes saturated with this type of product, its cost gradually decreases.

Usually, this method is applied by the manufacturers of the following innovative content:

• crash games;
• arcades;
• slots with non-standard mechanics and advanced engagement features.

An important aspect of the skimming strategy is the popularity of the iGaming enterprise. Users and operators are already familiar with the brand’s offerings, so they are looking forward to its new solutions. Understanding this, the provider can set the maximum starting price and receive a good income.

Over time, other software vendors begin to develop similar products. The game (mechanics and special features) loses its exclusivity, and its cost is reduced.

A similar picture could be observed with Bitcoin slots or Megaways digital options. In the beginning, there were very few firms that offered such content. Today, every second studio is working in this direction. Ready-made solutions are no longer unusual, which affects their prices.

Market Penetration Strategy

This approach is the opposite of skimming. Here, providers need to set a low initial cost.

Most often, the method is used by young brands. To gain a foothold in the chosen segment (production of slots, as well as board and fishing entertainment), they need to offer affordable prices.

This allows companies to attract a particular category of consumers. These could be beginning operators with a modest start-up budget.

The purchase of content at a low cost is not always a bad thing. Often, there are decent slot machines in this segment with unique mechanics and catchy gameplay. Inexperienced market participants are distinguished by original ideas, a fresh perspective on the creation of software, and impeccable design.

Geographical Pricing

In this case, the cost of solutions depends on the location of players. It is also affected by the following factors:

• taxation and licensing fees;
• wage level;
• price of hosting, rental of IT infrastructure, and technical maintenance.

An important factor is the regulatory rules in the chosen jurisdiction. These are advertising restrictions and limits on the maximum size of bets, time spent on the website, breaks between spins, etc.

Cost of Multiplayer Games

A modern online casino is a platform with a wide variety of content.

The catalogues of entertainment still include mostly digital slots and table solutions. However, arcades, fishing, skill games, and crash products are slowly gaining popularity. Their main characteristics are support for multiplayer mode and the existence of social functions.

The most successful pricing strategies in this category are:

1. Freemium. The developers offer a free version of the game and additional paid features (tools and content). This approach ensures a huge inflow of a solvent audience from the start and contributes to the rapid popularisation of the iGaming brand and its products. Internet traffic is monetised through purchases in the app.
2. Subscription fee. In this case, companies provide constant access to entertainment and a large selection of additional functions (mini-quests and VIP draws). The key advantage of this option is the receipt of a stable profit. However, the provider must constantly work to improve its games so as not to lose the audience’s interest.
3. Price sustained by advertising. Access to products is free for all categories of users. Revenues are generated through ads displayed during sessions. This model has gained immense popularity, especially in mobile casinos. Players get access to the solution and enjoy it without any initial deposits. Software vendors and project owners earn money from the displays of promotional materials.
4. Dynamic pricing. The costs of content and in-game tools are adjusted depending on market demand, the behaviour of users, or other external factors. This allows entrepreneurs to adapt the selected strategy in real time to maximise revenue and audience engagement. Providers track the activity of clients and identify basic patterns and trends that indicate customers' willingness to pay more.

Bundled Pricing

This approach involves combining several products into one package and supplying it at a reduced cost. Such a method is very common in the gambling niche: it is used by both software vendors and aggregators.

For example, an intermediary represented by the manufacturer of program components gathers content from different brands and sends it to the operator. The catalogue will include multi-genre games (slots, arcades, and live options) from licensed developers.

Project owners receive unlimited access to entertainment by:

• Microgaming;
• NetEnt;
• Playtech;
• Playson;
• Evolution;
• Pragmatic Play and other companies.

Payment aggregators are also extremely popular. In this case, instead of games, the intermediary firm combines settlement methods that are in demand in a particular country or region. The ready-made product contains well-known financial services, has a unified interface, and includes technical software support.

Operators can buy a turnkey online casino or a White Label platform with the implemented bundled pricing strategy. It has the following advantages:

• strong motivation to purchase;
• growth in sales volume and average check;
• increasing customer loyalty.

Entrepreneurs benefit from the cooperation of this type. For a relatively low price, they receive complex solutions for a quick start and safe deployment in the market.

Formation of Prices in Online Casinos

A gambling platform is a unique structure that has many functions, tasks, and sources of income. Therefore, businessmen can choose between different strategies.

The income of iGaming sites is calculated as follows: the total bets placed by users minus their winnings. After that, it is necessary to subtract taxes, fees, and operating expenses from this sum. These are the wages of hired personnel, the cost of the hosting provider’s services, royalties, and other deductions. The remaining amount is the firm’s net profit.

The final income (margin) of project owners depends on such factors as:

• technical settings of content (RTP, volatility, bonus program, and jackpots);
• expenses (loyalty program, marketing, rental, and wages) for the reporting period.

Operators can offer their clients several additional services with different costs and approaches to pricing.

The development of games based on individual sketches can be a good example. They will be placed on the entrepreneur's website, so competitive or dynamic pricing strategies cannot become successful.

An excellent decision would be to form a cost based on subscription or ad views. Players will test and complete the initial rounds for free and then pay for access to premium levels and valuable in-game tools.

Casino owners may also offer their B2B partners such services as posting promotions on their platforms. In this case, competitive pricing will be beneficial. By offering an average cost, operators will be confident that their advertisers are not going to work with other companies.

Penetration pricing is suitable for young studios that have decided to improve their bonus program through a multiplayer tournament. Setting a minimum entry threshold will attract new solvent traffic and increase the brand’s liquidity.

The Main Things about the Formation of the Value in Gambling

Choosing the right cost for a product or service is the key to the online casino’s prosperity.

Key features of pricing in the industry:

• The most important tasks include gaining a larger market share, diversification of activities, and profit maximisation. This tool is also used to maintain a desired position in the region or for business survival.
• Content providers apply several popular strategies. These are penetration, skimming, competitive, and geographical pricing.
• The cost of multiplayer solutions is based on freemium, subscription, and advertising value. Many companies have a dynamic approach to setting prices for arcades, fishing games, and casual entertainment.
• The bundled type is common among content aggregators and payment service providers. The concept is also used to create ready-made solutions with a wide configuration.

The CASEXE studio is your reliable partner in the gambling market. From us, it is possible to order slots from top vendors, advanced management systems, and other tools for establishing and scaling the iGaming business.

We also offer the following useful services:

• security software integration;
• VR casino development;
• Project management, and much more.