Looking Ahead At Online And Mobile Gambling’s Future Potential

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Tuesday, March 25th, 2014 | Written by Stephen Smith

Land-based casinos and lotteries may dominate the gambling industry, but online real-money gambling is continuing to grow rapidly, as the use of smartphones and tablet computers becomes more prolific. Across the globe, however, the regulatory landscape of internet wagering is varied and whereas most European countries have some legislation in place, and last year accounted for around 54% of the total market estimated to be worth $30 billion, the North America and Asian markets are still struggling to introduce regulation which would see them capture a significant share of a market expected to grow at around 10% annually over the next few years.

How far can mobile gambling go?

Online gambling is a very lucrative industry and the world’s biggest online poker room PokerStars generates annual revenue in excess of $1 billion, while other leading gambling companies such as Bwin.Party, William Hill, Betfair Group, and 888 Holdings, each report online revenues of over half a billion dollars each year. Without a doubt the biggest trend in the business is mobile and social gambling, which is forecast to capture more than 40% of the total internet gaming market by 2018.

The nascent US igaming industry

In the USA, online gambling was legalized by the three states of Nevada, Delaware, and New Jersey in 2013, with more states expected to follow suit over the next few years. In the biggest regulated state of New Jersey, online gaming revenues improved from $7.4 million in December, to $9.5 million in January, and global gaming industry information provider GamblingData predicts The Garden State’s online gambling market will be worth $262 million in gross revenues by the end of 2014 and $463 million by 2017. As more states join the igaming bandwagon, analysts have forecast the US market could earn more than $7.4 billion by 2017, representing roughly 30% of the world’s online gambling market.

Still, the mobile aspect of online gambling is a trend online operators are keen to fully explore, and as Reno gaming analyst, Ken Adams, explains: “Mobile apps are a growing trend in every business — in the UK and the rest of the world, it’s one of the biggest trends in gambling, and it’s quickly replacing computer online gaming. How long this trend will last and whether or not it really has legs is hard to say because it’s really still so new.”

The Latin American market

In South America’s biggest market of Brazil (pop:200m), online gambling is forbidden although Brazilian gamblers still continue to spend hundreds of millions of dollars each year on unregulated offshore gambling sites, with the market expected to grow by 20% over the next few years.

In the markets of Mexico (pop:120m) and Argentina (pop:41m) online gambling is permitted, with the Argentine government having granted a license to its first online casino in 2002, and its first online sports betting site in 2006. Argentina currently boasts the biggest number of registered online gambling websites in the whole of Latin America, while in the future Mexico is expected to boost the market further by partnering up with US states as they move to regulate their own igaming markets.

The Asia-Pacific region

The Asia-Pacific region boasts the biggest number of online gamblers on the planet, while China remains the world’s largest online gaming market with hundreds of million of people playing online at unregulated sites. In China igaming revenues are forecast to grow by more than 20% between now and 2017, while in South Korea and India mobile gaming is predicted to be the fastest growing segment in the internet gambling industry. Meanwhile, in Singapore, the third biggest casino hub in the world, the government is seriously considering measures to restrict online gambling, while in Japan mobile gaming revenues grew five times over last two years, to be worth several billion dollars.

The true potential of mobile gambling

In conclusion, almost half of worldwide internet users play online games and with mobile gambling growing exponentially and expected to account for 40% of total igaming revenues within the next four years, operators are ploughing significant resources into understanding the market and preparing for the next phase of this fast growing segment. As prnewswire noted on a recent article entitled, ‘Mobile: The Future of Interactive Gambling’:

“The world has changed and people are using handheld mobile devices as part of their everyday life as a way to interact, socialize and entertain. Smartphones are already an essential accessory across all generations, even becoming popular amongst the older population range. Mobile is no longer a way to be at the cutting edge of an industry’s technology, it’s a requirement to stay neutral.”