Ron Mendelson is the Director of Costa-Rica based International Business & Corporate Services consultancy firm, Fast Offshore. With over 24 years of real-world experience in iGaming Licensing and Payments, Regulatory Compliance, Tax-Efficient Corporate Structuring, Incubator and other Hedge Fund Licenses, Blockchain and Cryptocurrency related services, he advises a number of international clients on their business needs in the Americas, Europe, and beyond.
The online gambling sector has been experiencing a period of impressive expansion. Corporate service providers have been inundated with licensing and incorporation requests, and ancillary service providers are reporting record revenue. But what’s driving it, and most importantly is it sustainable?
What’s driving growth?
One of the key drivers of growth has been the COVID-19 pandemic. While iGaming was growing steadily beforehand, the pandemic changed everything. Many other industries floundered and suffered, but the online gambling sector weathered the storm and remained profitable. This was due to several factors, including the increased demand for online entertainment. People were at home, off work, or with little to do. Craving some excitement and even human contact, they logged onto gambling sites instead.
Before the pandemic, increased access to high-speed internet, growing mobile phone usage, and a preference for online entertainment resulted in increased numbers of account openings. Younger demographics of gamblers, particularly the 18-35 age group accounted for a big chunk of new business.
In terms of geographic location, Asia and the Pacific area witnessed steady growth, accounting for much of the market. This was followed by interest from Latin America, India, and of course, Europe.
Key areas of growth?
Several key areas are driving forward growth in the gambling sector. One of the most notable has been the mainstream transition of eSports and eSports betting.
Once something of a fringe activity, since the COVID-19 pandemic, it has become one of the hottest kinds of betting around. Countless eSports betting sites have sprung up, and many existing sites have decided to incorporate it into their portfolios. The eSports betting market is expected to be worth more than $13 billion by 2025, up from $7.9 billion by the end of 2019. This impressive growth rate is due in part to the fact that computer gaming is one of the most popular pastimes globally.
The fan base for computer games keeps on increasing, and as a natural consequence of its competitive nature, the desire to bet grows with it. With 270 million occasional viewers and 220 million regular viewers in 2020 demonstrates a sizable target audience for eSports betting.
Another important vertical to consider is live dealer games. These are casino and table games where a human being in front of a camera deals cards and carries out various actions within the game. Players log in and view the activity in real-time; they can interact with the dealer and other players. The demand for live dealer games has been on a steady trajectory over the last few years, but the pandemic accelerated it.
As the opportunity for in-person socializing was limited, more people looked to the online world to compensate. Many gamblers, unable to visit land-based casinos, sought out live dealer games, and many have remained even after restrictions have been lifted. But the sector is also thriving with interest from younger gamers. With a penchant for technology and technological interaction, they are keen to engage with live dealer platforms as a form of entertainment.
The other key area of growth is mobile gambling. If you run an online gambling site and don’t offer an app, or at least a mobile-optimized site, you’re at risk of losing customers. Almost half of the world’s population own and use a smartphone. Nearly 5 billion people also have regular internet access. Almost all services and products are now available online in some form e.g. banking, lending, investing, working, communicating, news, education, and more. Mobile gambling is no exception. Your customers want to play games and gamble via their smartphones. Not only does this make it more convenient for them, but it can increase your revenue too.
Mobile gambling is one of the most important sectors of the industry and it should be given due attention by operators. Make sure you are offering a slick, secure, and fast mobile gambling experience.
What will keep it sustainable?
The key to the sustainability of the sector is the introduction of new technologies. The demands of players will continue to match the technological advancements of the day. As such, operators must respond by providing a fresh portfolio of products. For example, including bitcoin and cryptocurrency payments, offering live dealer or even virtual reality options- these are all great ways of keeping people interested. Other technologies such as the Internet of Things, AI, and augmented reality, will again change the face of the sector.
So, the answer is “yes” the surge in online gambling is sustainable, but it needs operators to be proactive in their approach. Staying on top of emerging trends and demands and knowing your target audience inside out is a key part of it. Additionally, creating a niche and offering top-quality products and customer service will also help you remain competitive. The future of this dynamic industry is full of potential, all it needs is savvy operators and entrepreneurs to seize it.