The iGaming industry has grown significantly in the 25 years it has existed. The first online casinos launched in 1995 after legislation was passed the year before by Barbuda and Antigua that made it legal to operate an online casino, lottery, or sports book.
In 2017, global iGaming was valued at $46 billion, with around 40% of this coming from sports betting, 32% from online casinos, and the remainder from other types of online games.
The iGaming market is expected to continue its impressive growth, with it reaching around $90 billion by 2024.
How Did We Get Here?
To reach this $46 billion valuation, online casinos, bingo operators and bookmakers have looked to technology. The industry was born out of innovations like the computer and the internet, allowing people to access online wagering services.
Movies like Rounders helped to influence the poker boom of the early 2000s, which saw explosive growth in interest in the game.
Shortly after this, smartphones hit the market and consumers bought them en-masse. This created new opportunities for iGaming to grow, as players had more convenient ways to play. Online bingo games became popular among women in the United Kingdom, with many daytime TV shows sponsored by online bingo brands and ads airing regularly.
Online sports betting has also grown dramatically in recent years. Mobile betting apps made it easier for sports fans to place a wager on games while the action was still happening. This made proposition bets more popular, letting fans bet on things like “next player to score” or “whether there will be another foul”.
To promote these services, fans have been exposed to endless adverts for sports betting brands as they sponsor teams, leagues, and TV broadcasts.
Where Are We Going?
On the path to reaching a combined industry value of around $90 billion by 2024, the iGaming industry needs to open up new markets and expand in existing ones. Revenue from online casinos in Europe is expected to reach €25 million in 2020, and growth is expected to continue beyond that. However, the biggest source of growth will be elsewhere.
Over the last few years, we have seen the bigger players in the market agree licensing deals with major brands in the TV and movie industries, as part of a strategy to attract new customers. These arrangements help to differentiate and augment classic casino games like roulette and slots by adding rule variations and new features that change gameplay. Examples of this include tie-ins with Deal or No Deal, Who Wants to Be a Millionaire, and Seth MacFarlane’s box office hit film, Ted. In the latter, there are several nods to the film, such as the Thunder Buddies Bonus if a player gets the correct combination of symbols.
Bookmakers will continue to offer a large bonus and free bets in an attempt to attract new customers by making their first bet “risk free”. This has been a strategy that has worked well for many years and looks unlikely to go away any time soon.
In the United States, growth is expected to be faster. In 2018, federal legislation changes made it possible for each state to set its own laws for online sports betting. A few states have legalised it already, while as many as 32 are expected to have done so by 2023.
This opens up a large demographic of people who are wealthier than many other areas of the world, speak English and have a history of sports betting and gambling. This creates a huge opportunity for iGaming operators and has seen many household names invest large sums in trying to gain an early mover advantage.
We will also likely see more brands pushing live casinos and virtual reality games, as they have been doing for several years now. However, it is likely they will remain niche products with little interest from the casual gambler as the investment of both time and cost is too high.
We’re likely to see a lot of the same strategies and tactics used by iGaming operators throughout 2020. The major change will be more the growing US market, while the continuing battle for market share in Europe will rage on.
As mentioned earlier, Slotegrator, an online casino software provider and aggregator, has shared information regarding its new partnership with Wazdan, a game developer.
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