iGaming Business: How It Works
How an iGaming Business Makes Money
An iGaming business takes bets online – from an online casino to sports betting and bingo – and keeps the difference between stakes received and winnings paid. The industry calls that gross gaming revenue (GGR).
The iGaming industry has two sides. B2C operators deal with players directly. They hold the license, own the brand and pay for marketing. B2B suppliers sell the platform, game content, payments and tools to those operators and get paid through setup fees, monthly fees or a share of GGR. Affiliates are a third group – they send players to operators and get paid for it.
Margins differ by product. US sportsbooks held 10.1% of handle in the second quarter of 2026, according to Deuces Cracked’s data, and that figure moves with results. Casino margin is steadier because it is built into the games.
Track360 estimates that the global iGaming industry will generate revenues of $121 billion by 2026 – 52% from casino gaming and 35% from sports betting. This is an estimate, so be sure to verify with regulators.
Licensing and Tax Costs in an iGaming Business
Licensing and tax are set by the jurisdiction, not by any supplier. Legal authorization stays with the operator and varies from one jurisdiction to the next. BSW does not handle licensing, and no software provider substitutes for it.
Brazil shows the scale, per Track360’s July update:
- License: R$30 million buys five years and up to three brands.
- GGR tax: 13% in 2026, 14% in 2027, 15% in 2028.
The UK moved the same way. Remote Gaming Duty jumped from 21% to 40% in April 2026. Remote betting gets a 25% rate in April 2027. Machine Games Duty continues to apply to gaming machines. HMRC may also ask a non-UK operator for security equal to six months of estimated duty.
Beyond license and tax, a launch budget typically covers:
- the platform
- game content
- payment integrations
- KYC and compliance tooling
- legal work
- marketing.
Each line depends on the market and the project.
How to Start an iGaming Business in 2026
Most operators go through the same sequence:
- Pick a jurisdiction. Check whether players there can legally gamble online and which authority licenses operators.
- Apply to that authority – it can take months.
- Pick a platform in parallel. Building from scratch is slow, so many operators start from a custom platform built on an existing core, as with BSW’s custom platform.
- Add game providers and payment systems through single integrations.
- Put responsible gambling tools, KYC and AML checks live before the first deposit.
Acquisition comes last and costs the most. Players arrive through affiliates, paid media and bonuses. Industry news outlets such as iGamingBusiness regularly cover where marketing rules are tightening.
Challenges: Illegal Gambling and Black Markets
Unlicensed competition is the most persistent threat. André Gelfi, CEO of Brazil’s Institute of Responsible Gaming, told iGamingBusiness in April 2025:
“Our main challenge going forward is the formalisation of our betting market.”
— André Gelfi, CEO, Brazilian Institute of Responsible Gaming (IBJR)
He estimated that unlicensed operators held about 60% of the market, using pre-regulation figures.
Higher tax raises the stakes, since each increase widens the gap between licensed and illegal gambling offers. Brazil also shows the cost of non-compliance: 87 active licenses on July 1, 2026, after 26 were revoked or suspended in the first half.
FAQ
What is the iGaming industry and how does it work?
It is the online gambling industry. Operators take bets, suppliers provide technology and content, and regulators set the rules.
How do regulations and licensing impact the iGaming industry in different regions?
Licensing sets entry cost, tax rate and permitted products. Brazil charges R$30 million per license, while the UK taxes remote gaming profit at 40%.
What are the key steps to starting and running a successful iGaming business?
Pick a market, secure a license, choose a platform, integrate content and payments, set up KYC and responsible gambling tools, then build acquisition.
What are the current trends and innovations in iGaming technology, such as AI and blockchain?
AI supports pricing, fraud detection and personalization, while crypto payments and blockchain-based products are a niche that varies by jurisdiction.
What are the main challenges and threats faced by iGaming businesses, including compliance and black markets?
Tax increases, compliance cost and unlicensed competitors lead the list.
How does the iGaming industry address responsible gambling and player protection?
Through deposit limits, self-exclusion, KYC checks and affordability monitoring required by licensing bodies.
What are the growth prospects and market size of the iGaming industry globally and in specific regions like Africa or Brazil?
Track360 estimates $115 billion globally for 2026, with Africa at $1.9 billion growing 27% and Latin America at
9.3 billion, growing 38%. Brazil’s 2025 GGR was R37 billion, an estimate from market reporting.
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