There are plenty of good startup opportunities in the world these days, but one you may not have considered is a video gaming cafe. These are low-maintenance, high-profit margin businesses in an industry that continues to grow. If you’re looking for a great new investment idea, opening a video gaming cafe could be the perfect option. Keep reading to learn what you need to know about the benefits of owning a video gaming cafe.
As the first Terminal Operator to install VGTs in Illinois, Universal Gaming Group is the most experienced partner for video gaming cafe owners. Contact us today to jump start your new business.
What is a Video Gaming Cafe?
A video gaming cafe is an establishment dedicated to hosting video gaming terminals (VGTs), or “video slots”. Players visit gaming cafes to play VGTs for entertainment. Video gaming cafes are often located in densely populated areas where video gaming is legal, and where they have the best chance of drawing casual and enthusiastic players.
Why Invest in a Video Gaming Cafe?
A video gaming cafe can generate huge amounts of revenue. Here’s how they work:
Customers come to video gaming cafes to hang out, eat and drink, and try their luck on the VGTs. The owner(s) of the video gaming cafe profit primarily from the revenue generated by the slot machines at the cafe. This revenue is then divided according to a predefined formula called the “mandated split”: roughly one-third to the gaming cafe, one-third to the Illinois Terminal Operator (the provider of the VGT equipment and service), and one-third to the state and city supporting state funds and local development projects.
If you’re wondering how profitable these video gaming cafés can be, the answer is VERY. In an average month in 2023, the Illinois VGT industry generated more than $240 million in gross revenue. Additional revenue can come from food and beverage sales, including liquor.
Benefits of Opening a Video Gaming Cafe
Strong revenue is just one of the benefits of investing in video gaming cafes.
Built-in Foot Traffic
The most important (and often most difficult) task when opening any new business is actually getting people through the front door. Video gaming cafes cater to an audience that is actively seeking this specific type of entertainment. Gaming cafes also easily attract new customers with the excitement of possibly winning money, not to mention the bright lights and highly visible signage that Terminal Operators provide to help promote the business. You’ll have no problem gaining foot traffic when you open up a new video gaming cafe.
Plenty of Variety
Have you ever heard a business claim that it “has something for everyone”? Well, that’s actually true when it comes to video gaming cafes.
Video gaming cafes have a wide variety of different machines, game titles and other gaming entertainment to cater to everyone’s tastes. The most successful cafes also serve some kind of food and beverage, and can often have other forms of revenue generating entertainment like TouchTunes digital music, darts, pool tables and pinball machines. Even those who aren’t interested in playing the games can still come to hang out with friends and have a good time. Any one of them could be a potential customer!
Attract New Customers
People are just drawn to slot machines. They’re bright and fun and who doesn’t like the chance to win money? When you add slot machines and other video gaming terminals to your location, more people will be inclined to stop by. You’ll end up with an influx of new patrons who come for the video gaming and stay for everything else your establishment has to offer. Video gaming cafes are simply a great way to attract a new customer base.
Loyal Customers
Another great benefit of owning a video gaming cafe is that they are one of the best businesses for attracting loyal customers.
People thrive on routines. We like developing patterns and repeating them over and over. It makes life easier and more manageable. Gamers, too, prefer to frequent places where they are most comfortable and regularly enjoy themselves. When people are having a good time, there is little incentive to switch up a routine. And because video gaming can provide a lot of fun even in a short period of time, gaming cafes can quickly become part of people’s weekly schedule. It’s a win-win for you and your customers!
How to Open Your Own Video Gaming Cafe
If you’re interested in enjoying all of these benefits and opening your own video gaming cafe, here are the steps you should follow, and what you need to know:
- Envision your café
Just like with any other business, for your new video gaming cafe to be successful you need to clearly articulate your brand and target customer demographic. Do some more research into the industry to decide what kind of customers you wish to attract. All different kinds of people across many demographics enjoy video gaming so you have plenty of options.
- Look for a Location
You’ll want to set up your new video gaming café in the ideal location for attracting your target demographic. Picking a location in a high foot traffic area can increase the likelihood that your business will attract customers quickly.
But there are other factors to consider. You have to be aware of any laws and restrictions imposed by the municipalities where you are considering opening your cafe. The Illinois Gaming Board (IGB) has more information on laws on video gaming cafes in each municipality.
- Apply for the Necessary Licenses
To open a video gaming cafe, you’ll need to acquire various licenses including a liquor license and a video gaming license. Here is some more information on eligibility for an Illinois gaming license.
Without these licenses, you won’t be able to legally operate a video gaming cafe. Start the application process as soon as possible to avoid any costly delays.
Video gaming cafes are a fantastic business opportunity, in an industry that continues to grow and provide benefits to business owners and local communities. Universal Gaming Group offers every resource you need to get started, and to help your business grow and thrive. Contact us today to learn more on how to get your new business started.
