Bankruptcy of Online Casinos: Whether it is Possible and Why it Happens

Posted 3 weeks ago in More

DDF apr-may-24 – Mobile

Online casinos are all popping up left and right, and sometimes it seems as if there is nothing easier than to start an online gambling business. All it takes is a couple of thousands of USD or EUR, a designer and some free time to handle the customer support. Still, that only scratches the surface, as running a successful business takes more than free time on one’s hands.

According to Forbes, only about 50% of all small businesses survive the five-year mark, while 80% of them survive the first year. The problem is not entering the market but surviving it. Respectable online casinos, such as those with lucrative no deposit bonuses you can find at, have higher chances of making it big. However, every player wonders whether their favorite gambling place can go bust.

Can Online Casinos Go Bankrupt?

Unfortunately, online casinos can go bankrupt, just like any other business. Although it seems that the online gambling market has unlimited potential, smaller operators are often struggling to stay afloat. With big brands dominating the market, it can be quite a challenge to remain profitable, attract the right employees and satisfy customers.

What Happens With Your Money if an Online Casino Goes Bankrupt?

We know what you’re thinking: what happens with my money if the casino goes bankrupt? To the best of our knowledge, no customer protection program would compensate players who lose money this way, not even when it comes to regulated and legal casinos. The only thing you can do to protect yourself is to reach out to the casino and ask what their policies and protection systems are, or in other words, what is the plan if they go bust.

The most common protection is keeping clients’ funds in a separate account. This means that the online casino is using the initial investment and profits to run the business, while your money is intact until you decide to withdraw. A good casino will never use your deposit to keep the engine running!

Why Casinos Go Bankrupt?

There are many reasons why a certain online casino brand would go down, so we’ll mention only the most common ones.

Legal Operations and Fines

To put it simply, many entrepreneurs underestimate the cost of running a casino business, so they decide to cut corners where it seems no one will see. Sizing down on the customer support and finances staff and getting involved with cheaper, but less reliable software suppliers results not only with the backlash by the gambling community but also the gaming authorities.

As fines start piling up, the business becomes unsustainable and is deemed dangerous, and the company has to file for bankruptcy.

Lack of Style and Fun Games

Getting a website is cheaper than ever! For no more than a couple of hundreds of dollars, one can launch an online casino and think they have it all: flashy banners, trendy colors and fancy fonts. However, as new games start piling up, the website starts to disintegrate, and crash down, and the overall user experience becomes plain horrible.

Branding and standing out in the crowd is worth splurging on, so the companies that pinch pennies on the creative and technical part, often have to pay the higher price in the end. Players of the 21st century don’t have a single reason to play at an online casino that takes ages to load a simple cherry slot game.

Bad Reputation and Bad Marketing

The days when every PR was a good PR are long gone. In this day and age, only good PR is what counts, while even the slightest negative connotation can ruin the brand forever and lead to bankruptcy.

So what are the biggest enemies of casino PR:

  • Bad reviews and experiences shared on social media and specialized sites;
  • Poorly timed and targeted social media campaigns;
  • Overpromising and downplaying the risk;
  • Uncontrolled media appearances, especially in negative light;
  • General lack of transparency in business operations.

We live in times when anyone can call themselves a marketing expert, and it affects the life cycle of online casino businesses.

Can One Player Bankrupt the Entire Casino?

We have all heard the story before! It is about a player who won so much that it single-handedly caused a casino to go bust. Although it sounds like a perfect scenario for a Scorsese movie, it is just an urban legend and nothing more.

A single player can’t win that much money, as the mechanism on which casinos operate works in the favor of the house even when the player wins big. Still, online casinos can sink if they fail to find the winning formula on time. If possible, play with big and reputable brands to cut down on the bankruptcy risk.


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