Published on: January 17, 2020
Gambling refers to online and offline bet of money or something of value on an event/occurrence with an uncertain outcome in the hope of winning money or material goods. The global gambling market is expected to witness significant growth during the forecast owing to the liberalization of rules and regulations related to gambling across multiple countries. For instance, in December 2018, the National Council of the Slovak Republic approved a new gambling act, through which all Europe-based gambling service providers can apply for online gambling licenses in Slovakia.
The global gambling market has been categorized as part of the global casinos and gaming market. The parent global casinos and gaming market covers products and companies engaged in casinos and gambling facilities and operations. The market includes standalone casinos, casino hotels, riverboat casinos, bingo halls, gambling machine manufacturers, lottery services, Internet gambling services, and betting services.
The global gambling market, including online and offline, is expected to grow at CAGR of around 5% over the next five years. Factors such as favorable government policies and the rising popularity of online gambling through desktops or mobile devices such as smartphones and tablets, and the penetration of smartphones will drive the market during the forecast period. North America is expected to dominate the global gambling market by region during the forecast period. In North America, gambling is legal in the US, Canada, and Mexico. The presence of large number of vendors and the emergence of online gambling are driving the market in the region.
Many factors are expected to influence growth in the global gambling market during the forecast period. Our analysis identifies the following factors to be driving the growth of the global gambling market:
The widespread Internet penetration is key to the growth of the global online gambling market. Commoditization and easy accessibility of mobile Internet network (3G/4G) have led to higher consumption of mobile Internet through smartphones. As the commoditization continues, penetration of the Internet has become more profound, i.e., reaching to remote and rural parts of the various countries. In addition to this over the last decade, with high penetration of tablets and smartphones, service providers are developing mobile apps and online gambling platforms to capitalize on the market.
An e-sport is an online multiplayer video game played by professionals. The market for e-sports betting has been growing at a rapid pace. It is one of the major growth enablers for the global gambling market. The growth of the market is majorly driven by the increasing penetration of social media platforms and the rising popularity of video games and virtual content. The prize money associated with e-sports betting also attracts a large number of customers. For instance, in 2018, the International Dota 2 Championship in Vancouver offered around $25 million in prize money alone. Owing to such lucrative opportunities, many players in the gambling industry are expected to shift their focus to esports games and come up with new services to attract users. This will drive the global gambling market during the forecast period.
Over the last decade, governments across the world have relaxed regulations on gambling activities and also ratified laws to ensure gambling revenues are included in their economies. In For instance, in 2018, the gross gambling revenue of Italy accounted for 1.12% of the GDP. Liberalizing gambling laws increases revenues in the form of taxes, new employment opportunities, and contribution to social welfare activities. Few such developments have been mentioned below:
Relaxation of government regulations and ratification of new laws related to gambling will drive the global gambling market during the forecast period.
Meanwhile, the vendors operating in the market face numerous challenges in increasing their sales and improving profitability. Some of those challenges are:
Security and credibility issues in online gambling are major factors hindering the growth of the global gambling market. Owing to the fact that gambling has been legalized very recently, most of the gambling websites do not have a proper dispute resolution framework, lack transparency in cash prize payout, and do not have fair and responsible casino gaming standards, which reduce the credibility of gambling operators and platform providers.
Further, online gambling websites and platforms have become one of the prime targets for cyber attackers and scammers. Gambling websites capture vital information about users, such as bank details and credit card numbers, which are vulnerable to hacking. Several offshore-run Internet casinos do not have the latest cybersecurity technologies in place, which increases the chances of cyberattacks. For instance, in September 2018, WINAMAX, an online poker platform provider, was hit by a DDoS attack due to which many users were not able to access the company’s website. This compelled the company to cancel tournaments and shut down cash games.
Thus, security and credibility issues associated with online gambling will hinder the growth of the global gambling market.
With the recent legalization of sports betting in countries such as the US, people have started accepting sports betting, as well as gambling in general, as a recreational activity. While this has brought in economic benefits for the bettors in terms of winning sums of money, there are socioeconomic costs that can have a severe impact on the physical, emotional, and financial health of the individuals who bet, as well as their families and close ones.
The low-income groups across countries such as India and China are especially estimated to witness substantial financial stress due to sports betting, which is a key market hindrance. Betting and gambling contribute to increased cases of bad debts and eventually bankruptcy, which directly increases the cost of credit in the economy. Furthermore, the increased financial stress due to the inability to pay debt can result in extreme steps like suicide among bettors and gamblers. The socioeconomic impact of sports betting is estimated to be a key challenge for the market, as it increases the stigma associated with betting and gambling in general.
Some of the trends that are expected to influence the market during the forecast period are listed below:
One of the key trends in the global gambling and betting market is the increasing impact of technologies such as blockchain, virtual reality, and Artificial Intelligence, specifically machine learning tools. The global gambling market is expected to grow as a direct result of improving consumer demand, driven by technological advances.
Major vendors in the market are increasingly focusing a significant part of their investments in machine learning tools and methods, which have shown promising results in prediction. Machine learning helps build predictive algorithms and accurate predictive models for better betting efficiency. Machine learning models and algorithms can make predictions in real-time data from numerous disparate sources, such as player performance, weather, and fan sentiment. These models require a large amount of historical and real-time data that is comparable and well organized prior to analysis, which makes them particularly well suited to predicting the outcome of sports events where a large volume of well-structured data is available across online and offline sources. The integration of advanced technologies such as data analytics and machine learning will be a key trend in the global gambling market during the forecast period.
Virtual currency is used in micro-transactions to purchase virtual goods. There has been an upsurge in the use of virtual currency because of increased demand for virtual goods and avatars in online gaming. Bitcoin is a digital, decentralized currency that is used to make transactions over the Internet. It provides a high level of anonymity and is not regulated by central banks. Users are not required to provide personal details while using bitcoins for gambling. Bitcoin provides several advantages over regular currencies, such as international transactions, easy deposits and withdrawals, lower fraud risks, quick payments, and no transaction fee. Some online gambling platform providers already support bitcoin transactions. For instance, Bitcasino.io, a subsidiary of mBet Solutions NV, offers gambling services such as bitcoin slots and table game and enables users to make transactions through bitcoins.
This growth in digital currency is will be a major trend that is expected to propel the growth of the global gambling market.
The global gambling market can be segmented into the following:
The global gambling market is fragmented with the presence of several international and regional players. We provide a detailed analysis of around 25 vendors operating in the global gambling market, including some of the prominent vendors such as 888 Holdings Plc (888 Holdings), Bet365 Group Ltd., Caesars Entertainment Corp., Camelot UK Lotteries Ltd., Flutter Entertainment Plc, Galaxy Entertainment Group Ltd., INTRALOT SA, Las Vegas Sands Corp., MGM Resorts International, and William Hill Plc.
Some key news related to vendors include;
Backed with competitive intelligence and benchmarking, our global gambling market research is designed to provide entry support, customer and M&A assessment, as well as go-to-market strategy support.
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