How to Start a Riverboat Casino

Wednesday, June 26, 2013

How to Start a Riverboat Casino

In response to state laws prohibiting gambling, cruise boats found a way to generate revenue by operating casinos on board. Using international waters, cruise boat operators can circumvent state limitations. To open and operate a small riverboat casino business, you'll need to make sure that you comply with your state's gambling laws in addition to any federal gambling regulations. Each state is largely responsible for regulating gambling within its boundaries, but the federal government has a limited right to regulate gambling on Native American territories and some forms of interstate gambling through Congress and the federal Commerce Clause. Your state's gaming laws apply to small and large business owners.

Step 1

Do marketing research. Use surveys and research census data to determine how many people in the area you plan to service will typically gamble on a riverboat. Determine how many casinos, on riverboats or otherwise, are in your marketing area, what types of games they offer, and what the most popular games are.

Step 2

Create a business plan. Use your marketing research to decide what type and size boat you want and determine how you will finance it. Determine what types of games you will offer and how you will staff them. Determine what wages you will pay the staff. If you need a bank loan, you will need to present the loan officer a professional-looking business plan.

Step 3

Contact the regulatory agency responsible for enforcing your state's gaming laws. Your state may strictly prohibit all types of gambling, limit the types of gambling and games that casinos can offer or allow Indian tribes to operate casinos. If your state does not allow gambling, you will need to find a state that does.

Step 4

Hire personnel for your riverboat. You will need to hire a riverboat operator or captain, casino dealers and hospitality crew members. If you plan on serving food, you'll need to hire kitchen and wait staff. You may also consider hiring security guards and a pit boss or person in charge of overseeing gambling operations.

Step 5

Purchase a riverboat. You'll need to make sure your boat is safe, meets local and federal regulations and can accommodate many passengers.

Step 6

Apply for permits and licenses. You will need to apply for permits and licenses to operate a commercial vessel, according to your state's laws. You will also need to purchase liability insurance to insure your property and business equipment. You will also need to purchase general liability insurance to protect your employees and patrons against injuries.

Step 7

Decide upon which type of business entity you will use to operate your riverboat casino. You will need to contact an accountant and business law attorney to help you understand the legal liability consequences and tax implications of each.

Step 8

Contact the Internal Revenue Service and your state's tax agency. You will need to apply for an Employer Identification Number from the IRS and may need a separate state employer identification number.

Tip

The American Gaming Association provides helpful information for gaming entrepreneurs. The association also provides links to state gaming agencies. Because riverboat casinos do not operate on international waters, they are subject to different regulations than international casino cruise boats. If you operate your riverboat casino in more than one state, you will need to make sure you comply with multiple states' gaming laws.

References (5)

Resources (1)

American Gaming Association: State Information

About the Author

Jill Stimson has worked in various property management positions in Maryland and Delaware. Stimson worked for the top three property management companies in the commercial industry and focuses her career on property building logistics and tenant relationships. She holds a Juris Doctor and a Bachelor of Science in psychology.

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Easy Tips and Ideas to Start Business

Although anyone can start a business, many people fail because of a bad product or improper research. If you want to start your own business, you can improve your chances for success before you even begin. In order to make your business successful, start strong and make sure that your idea will hold out for the long haul.

Have a Good Product

Ensure that you plan to sell something useful. Although you may think that your product is important or special, that doesn't mean the general public will agree. Ask friends, family and strangers what they think of your product. If they don't seem that interested, ask them why. With their suggestions, you can either improve the product or scrap the idea completely. According to Brad Sugars of Entrepreneur magazine, most small businesses fail because they sold a product that didn't have an adequate market. This also applies to small businesses that provide a service. A lawn-care business might be useful for part of the year in a northern state, but it is in-demand year-round in the south. Consider whether people will actually want to use your service and get constructive advice from those not afraid to give their opinion.

Research Local Businesses

Research local companies before starting up your own business. This will not only give you an idea of the amount of competition you will have, but it will also help you price your product or service. If you're looking to start a wedding photography business, you may find during your research that the market is over-saturated in your area. If not over-saturated, you should contact each business and ask them for a price list. Alter your prices so you can stay competitive with the competition in town. Researching similar local businesses will also help you decide where to locate your business location. Try not to start up a store or office close to another business of your type. If your small business is located away from similar business types, this will cause locals to choose you over businesses that are farther away from where they live.

Get Professional Advice

You may know someone who has started their own successful business. Ask him for advice and listen to his stories of how he started his company. You may gain useful advice on the good and bad ways to start a business. Local entrepreneurs can also introduce you to local product providers or advertisers that you may not have met without their help. Accept any advice with open arms, especially if the advice is coming from someone successful in the area.

How to Calculate Business Start Up Costs

Starting a business in no easy endeavor. It takes a great deal of research, perseverance and hard work. While sweat equity will make your small business more successful, you will most likely need real capital to get the business started. Before you start raising capital and/or investing your own funds, the first thing you need to do is determine the total start-up costs.

Step 1

Determine your costs of sales. For most small businesses this means inventory, the cost of raw materials, manufacturing equipment, shipping, packaging, and warehousing. However, not all businesses sell products. In this case, the cost of sales is primarily the direct labor involved in making the sale. For example, to open a small shoe business entails purchasing enough inventory ($10,000) to stock the store.

Step 2

Determine professional fees. Planning your business structure, i.e., limited liability corporation or general partnership, means hiring an attorney. There may also be the need to pay an attorney for help with establishing trademarks, copyrights, and patents. In this scenario, that puts total professional fees at an estimated $20,000.

Step 3

Determine technology costs. Technology can greatly reduce the cost of labor for small business if used effectively. Most small businesses require computers, printers, cell phones, website development, Internet access, software applications, information security, data storage, and outsourced information technology (IT) consulting. If the cost of technology is $10,000 to start, add an additional $5,000 a year for maintenance (hint: maintenance is not included in start-up costs).

Step 4

Determine administrative costs. This varies with business types and may include items such as business insurance, office supplies, product packaging, parking, rent, express shipping, desks, chairs, fax machines, phones, or anything else necessary to operate the business daily. A good estimate for start-up administrative costs would be $5,000 for the first six months.

Step 5

Determine initial sales and marketing costs. Now that you have your product, you need to let folks know about it. Sales and marketing costs generally include marketing materials for presentations, printing stationery, business cards, advertising, trade show events, and public relations. These initial sales and marketing costs can add up to $3,000.

Step 6

Determine the wages and benefits needed to secure a staff. This includes employee salaries, benefits, workers compensation, and payroll taxes. Let's put the cost of wages and benefits estimated at $20,000 for the first three months of business.

Step 7

Add all costs associated with starting the business for a total. Be sure to only include business start-up costs that will be incurred in the first three to six months of operations. For this example, the calculation is: $10,000 + $20,000 + $10,000 + $5,000 + $3,000 + $20,000 = $68,000.

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Wednesday, June 26, 2013