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Online Gambling Industry 2018 Review


The Current Status of Online Gambling on the Global Stage

The gambling industry continues to experience positive growth on the global stage. The legalization of the gambling industry has facilitated a burgeoning market with billions of dollars in international revenue streams. The provision of gambling games, notably sports betting, casino games slot machine games, bingo, instant games, and lottery, has fueled the industry. Already, gaming and gambling contributes enormously to employment in many countries, and there are no signs of this industry slowing down anytime soon.

The introduction of online gambling in all its forms has fast-tracked growth in an established industry. Online gambling takes on many forms, including mobile gambling (Android, iOS, Blackberry), PC, and Mac activity. There are many reasons why the provision of online gambling services, and the increasing liberalization of these services is generating huge player interest around the world. For starters, online gambling is accessible, cost-effective, and convenient. Players are not required to frequent land-based casinos, request time off work, or plan an expensive vacation – everything is available at the click of a button.

2018 Will Be Remembered for Legalizing Online Sports Betting

2018 has been a breakout year for the online gambling industry. Thanks largely to the historic decision by the Supreme Court of the United States (SCOTUS) to overturn the PASPA (Professional and Amateur Sports Protection Act) ruling which prohibited individual US states from allowing sports betting activity, with the exception of a handful of states including Nevada. New Jersey petitioned the Supreme Court to nullify a 25-year-old law that prevented all states (with notable exceptions like Nevada) from allowing sports betting. The 6-3 SCOTUS decision found that PASPA violates US states’ 10th amendment rights. It didn`t take long for New Jersey lawmakers to fast-track sports betting legislation permitting legalized sports betting in the state. Governor Phil D. Murphy signed it into law.

The New Jersey paradigm is particularly impressive in that September 2018 marked the biggest wagering tally on sports betting with an estimated $184 million in sports bets taken. Of that $104.9 million in sports bets was placed over the Internet. On-site wagers amounted to $79 million. Clearly, the tide has shifted in favor of online betting activity, making 2018 a breakout year for the online gambling industry. In New Jersey, football betting dominated with the lion’s share of takings. In the few months since sports betting became legal (14 June 2018), over $328 million handle (bets placed) has been taken, with gross revenue of approximately $40.5 million. The state reaped $4.2 million in taxes through September, with 8.5% of on-site wagers and 13% of online wagers.

Global Trends in the Online Gambling Market

The online gambling market is split up into 4 broad categories. These include social gaming, bingo and lottery as one category, online poker, sport betting online, and online casino betting. Online casino betting is the #1 biggest market currently in operation, with a wide range of betting options available to players. These include Slots, Roulette, Blackjack, Baccarat, Video Poker and others. Most online gambling revenues are generated in Europe. Two factors have been cited as the reason for this: increasing personal disposable incomes and greater mobile functionality.

Another burgeoning market is Asia, replete with its cutting-edge Internet technology and increasingly liberal gambling legislation. Most of the growth taking place in the online gambling industry is through mobile gaming. Notable trends include an increasing proportion of female players in the mobile gambling market, a fact which is tipping the scales from traditional models. Other elements to consider include widespread technological advancement, consolidation of multiple markets, alternative payment processing systems and cash options (cryptocurrency).

Exhaustive Studies on Global Gambling

Multiple studies are conducted through market analysis companies like Koncept Analytics with its Global Online Gambling Market: Industry Analysis & Outlook (2017 – 2021) report. This study covered major growth drivers, challenges, and regulatory elements across North and South America, Europe, and Asia. Another exhaustive study conducted by UpMarketResearch titled Global Online Gambling Market Industry Analysis & Forecast 2018 – 2023 also provides interesting insights into the highly competitive online gambling market. The 100-page report features current market trends and future-oriented opportunities for enhanced profitability, revenue growth, and market penetration. Foremost among the areas researched is the technology being used by online gambling companies to reach players. This intelligence report includes SWOT analysis and regional segmentation statistics.

Heading into 2018, it is clear that the global casino industry has shifted away from Atlantic City and Las Vegas to Asia, notably China and Macau. Annual growth between 2013 and 2018 for the global casino and online gambling industry declined at a rate of 0.9% per annum, but revenues topped $265 billion. An estimated 1.5 million people are employed in the global casino and online gambling market, with some 5,000+ businesses currently in operation. The biggest companies currently operating in this lucrative market include SJM Holdings Ltd and Las Vegas Sands Corporation.

The US Regains a Foothold in Global Online Gambling Market

In North America alone, an estimated 2,300 casinos are operational. The majority of these (38.1%) are in the United States. Most of the gambling industry is focused in the western US, notably Nevada, with a large minority in the East, notably New Jersey. These two enclaves comprise 75% + of all revenues generated in the United States. Thanks to regulatory frameworks, the bulk of online gambling revenue is derived from New Jersey, Delaware, and Nevada. Changes are afoot however, with other states including Pennsylvania now also permitting regulated online gambling activity.

According to Statista, the size of the online gambling industry in North America was $4.89 billion in 2015, and expected to hit $8.66 billion by the end of 2018. That represents an almost 80% increase. Globally, the 2015 value of the online gambling market was $37.9 billion. By 2020, this figure is expected to rise to $59.79 billion. The Statista numbers may not accurately convey the value of online sports betting in the US, which is now a major driver of revenue. Based on the numbers, the global online gambling market has outperformed other industries since 2009. The following figures have been collated by statisticians:

  • 2009 – $20.51 billion
  • 2010 – $22.87 billion
  • 2011 – $25.48 billion
  • 2012 – $28.22 billion
  • 2013 – $31.2 billion
  • 2014 – $34.81 billion
  • 2015 – $37.91 billion
  • 2016 – $41.77 billion
  • 2017 – $47.11 billion
  • 2018 – $51.96 billion
  • 2019 – $55.19 billion
  • 2020 – $59.79 billion

  • Despite the success of several US states, there are still many restraints on online gambling activity in the US. It has a huge consumer pool, but strict prohibitions and regulatory constraints are making it difficult to tap into the full potential of online gambling. Across the Middle East, gambling and betting is no-go territory, but slow moves are taking place to try and loosen the vice -like grip on this industry.

    Clearly the biggest growth driver of the industry is smartphone gaming. Every day, increasing numbers of online players are taking to mobile devices for all forms of communication, entertainment, and work-related matters. Mobile has extensive consumer reach, and online casinos/mobile casinos are tapping into this lucrative market. The market share of PC-based gaming is slowly giving way to mobile, and this will continue throughout 2018 and beyond. Statistics indicate that some 51% of the global population is involved in some or other form of gambling annually. Online gambling is quickly becoming a bigger part of the action.

    What Do the Numbers Really Say?

    Between 2018 – 2023, it is expected that the global online gambling market will generate compound annual growth returns of 9.7%. The online gambling industry is highly responsive to innovation, and thanks to ongoing developments in casino software and hardware, growth will be influenced by technological developments. In 2018, more people than ever before have access to online gambling activity, with top-tier operators now availing their services to players all over the world.

    As a case in point, 888casino has successfully entrenched itself in the New Jersey market, in addition to having an established presence in the United Kingdom, and across continental Europe. Many other operators claim similar accolades. The United States paradigm is a slippery slope for operators, but slow and steady progress is being made across-the-board. States including New York, Pennsylvania, Iowa and Kentucky are likely to have a big impact on online gambling in the near future.

    Artificial intelligence, machine learning, and chatbots are expected to have an impact on online gambling activity globally. Virtual reality is another element which is slowly gaining traction with online casino operators. By appealing to new demographics, market segmentation strategies can now be adopted to allow online casinos to enter new markets and develop new revenue streams. At the time of writing, more than 84 countries globally had legalized online gambling activity.

    Clearly, Europe is at the forefront of this evolution, with its democratized system of gambling activity. Pie charts indicate that Europe and North America dominate the online gambling market, followed by Asia-Pacific, South America, and the Middle East. There are multiple market leading authorities in the online gambling market, including Camelot, PaddyPower, Ladbrokes, 888 Holdings, Bwin.Party, TVG, and Watch and Wager. Regardless of the market research company, a universal thread runs through all the reports: The global online gambling industry is rapidly expanding.

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