Does Anyone Make Money Gambling Online?

With the Covid restrictions slowly being lifted, the world (and specifically the online gambling world) has shifted to focusing on recreational activities once more. As you may have guessed, most casinos and sports betting venues have reopened, and with them, the opportunity to gamble online once more.

Is anyone actually profiting from gambling online, however, or is it all just about having fun and hopefully winning some money? Let’s take a quick look.

The Biggest Online Casino Profits

As we’ve established, casinos and other gambling platforms have reopened, and with them, the opportunity to gamble online once more. It wouldn’t be a huge surprise if your favorite casino or sports book made a huge comeback based on the demand from gamblers who want to get back to playing, as it is a popular pastime during the lockdown. But even before the pandemic, the industry was experiencing a resurgence due to the rise of online casinos.

Let’s take a quick look at how the biggest online casinos performed over the last few years, based on the most recent available data (read disclaimer):

1. Jefferies – Over the last five years, this online casino has grown its revenue from $15.6 million in 2014 to $60.9 million in 2019. The bank accounts of its owners, Sandora Capital Management and other affiliates, change frequently and are believed to be tied to an offshore entity in the British Virgin Islands.

2. BetVictor – This is one of the biggest names in the online gambling world, with major brands such as Bet365, Unibet, Paddy Power, and many more. The company reported a revenue of $93.4 million in 2018, an increase of 11% from the previous year. It is now valued at over $1 billion.

3. NetEnt – This company has been a major player in the online games market for years and is now expanding into the gambling space with new games and platforms. While most of its revenue (55%) comes from online gaming, it also receives significant income from betting and has offices in both Malta and Britain (where a good chunk of its customer base resides).

4. GVC Holdings – This company, whose primary business is in betting and gaming (most notably Betsafe), saw its revenue increase by 16% from 2017 to 2018, reaching $102.3 million.

Now that the world is getting back to normal, it’s time to take a closer look at how profitable online gambling can be. To figure that out, let’s dive into the industry-standard definitions of profit and loss (P&L).


This is simply the total amount of money a business makes from operations (i.e., purchases of goods and services) minus the total amount of money it spends (i.e., sales and costs incurred). In an ideal situation, we would see a positive figure here (i.e., profit).

In the case of online gambling (at least on the surface), it’s pretty easy to see how this could happen. You may be familiar with the concept of a gambling startup; these are businesses that establish operations but don’t have enough revenue to cover their costs, so they turn to credit cards to fund the operation. Once the bills are paid, the business has a profit (or at least a positive cash flow).

Some startups choose to invest their profits in growth – acquiring more properties, establishing new offices, etc. – but many choose to simply cover the costs of their operation and look for ways to make more money once the business starts generating revenue.


On the opposite end of the spectrum, we have loss. This is the total amount of money a business spends (i.e., sales and costs incurred) minus the total amount of money it makes (i.e., purchases of goods and services). In a nutshell, this is the opposite of profit. A loss is undesirable (at least in the short term) because it means the business isn’t making enough money to cover its costs.

In the case of online gambling, it’s not so easy to see how this could happen. You may be familiar with the concept of a high-risk venture (usually found in the startup world), which is a business that goes bankrupt with little or no profit. Since most banks and credit cards don’t offer online gambling loans due to its high risk element, these businesses are forced to find alternative sources of finance.

If we compare the profit margin of online gambling to the margin of traditional casinos (based on 2018 figures), we see that the former is significantly lower. Traditional casinos have a profit margin of 47% compared to an industry-wide average of 33%. This means that they’re achieving a higher level of profitability than average. If we compare online gambling’s profit margin to that of the betting industry as a whole (40% versus 35%), we see that it is significantly lower. This is probably due to the relatively high cost of money in the online gambling space compared to traditional betting venues. When you add in the fees and commissions associated with placing bets in real-life casinos, it makes the betting side of the equation more profitable than the online casino side.

Profit and loss are important concepts in all industries, but in the case of online gambling, it’s important to understand where the money is coming from and where it’s going. Since credit cards don’t typically work with online gambling companies, this type of business needs to generate revenue from some other source in order to function. Once it starts generating revenue, it can cover its costs and begin generating a profit.

Is anyone actually making money online gambling?

Based on the most recent figures available, the short answer is yes. At least four major companies are profiting from online gambling, and based on the size of their bank accounts, it wouldn’t be a huge surprise if more started showing signs of profit – especially since so many people are looking for ways to get back into the hobby.

Most notably, Jefferies – which as mentioned above, is the parent company of two other well-known online casinos – saw its revenues rise by 23% in the last five years, reaching $180 million in 2018. It now has $60.9 million in cash reserves.

NetEnt and GVC Holdings, the two other companies mentioned above, both had revenues of $102.3 million in 2018, an increase of 11% and 16%, respectively. They now have $52.9 million and $52.3 million in cash reserves.

Finally, we have the infamous BetVictor, which as mentioned above, is one of the biggest companies in the betting space. This company had revenues of $93.4 million in 2018, an increase of 11% from the previous year. It now has $45.7 million in cash reserves.

How Does Online Gambling Work?

If you’ve been playing on the internet for long, you may have seen a Ponzi scheme pop up now and then, usually referring to a type of investment fraud. In the case of online gambling, this is called a pyro-ponzi scheme, and it goes something like this:

A business will claim to be able to generate high profits in a short amount of time by exploiting a system of high leverage, usually with the use of computers and online platforms. (In some cases, the business may even use more sophisticated methods to generate massive profits in a single bet or transaction – things like flash trading and algorithmic trading).

When people hear the term “pyro-ponzi scheme,” the image that typically comes to mind is that of a person in a colorful shirt and jeans holding a torch, running wild and recklessly gambling. While this may be the case in a Hollywood movie, this is definitely not how things work in real life. First off, in most cases there is no “torch-wielding” individual involved; this part is acted out by a handful of people who work for the company. Secondly, in the case of online casinos, there is no actual gambling taking place. The whole point of an online casino is to establish a connection with a gambler and get them to play as much as possible (hence the name “gamble”).

Since there is no real gambling, this type of investment is referred to as “front running” or “layering.” To put it simply, the company receives a tiny fraction of the bet as a commission, and then passes the rest on to the next person. In exchange for taking this huge bite out of the action, they are able to generate enormous profits in a short amount of time. (Layering makes up a significant part of their revenue since most online casinos don’t pay out large sums to players; plus they make money off those who do win).