The iGaming Industry is a little over 25 years old and has grown to have a valuation of around $46 billion. Things have changed a lot since it first began; the small independent casinos that pioneered the format have either grown to be massive global entities, or have been swallowed up by them. The Stars Group alone has a market capitalisation of more than CAD$9 billion.
Growth from Technology
A lot of the growth from the last 25 years can be attributed to advancements in technology. The industry was born from the development of the internet allowing casinos to take wagers from players that were thousands of miles away.
As computers and the internet got faster, online casinos quickly took advantage of the power, improving their services and making them into the polished products we know today.
Then in the 2010s mobile devices like smartphones and tablets brought new opportunities. It meant that customers in existing markets had a new platform to play on. Gone were the days when players would need to be tethered to their computer desk, instead they could play games and place bets on the move.
Smartphones also opened up new markets. Some consumers had not benefited from computers and/or fixed internet connections due to their remoteness, making smartphones their first opportunity to connect to the internet.
Sports Betting
More recent growth has come from sports betting brands increasing their marketing efforts. Sports betting now makes up around 40% of the entire iGaming market, followed closely by online casinos with 32%.
Major sponsorship deals with sports leagues, teams, and TV broadcasters has made many of these brands household names and helped them to gain popularity with sports fans.
Future Growth
Although the growth of the iGaming industry has been immense over the last two and a half decades, there is still a lot of potential for more. Some forecasters are predicting that the $46 billion figure could easily double within the next five years. In 2020 alone, online casinos and poker rooms in Europe are expected to bring in €25 billion in revenue.
The growth is likely to come from several sources.
New Technologies
iGaming has technology right at its heart; afterall, it would not exist without it. The major players know this, so they regularly invest in new technologies to expand their offering.
One of these new technologies is virtual reality. Although it has been around for a while, it matured to a point where it became practical for video games about a decade ago with the launch of VR headsets like Oculus Rift. Since then major games console manufacturers, including Sony and Microsoft, have been developing their virtual reality offering.
iGaming was also quick to get in on the act, with several major brands now offering virtual reality versions of their games. Many are touting VR technology to be the future of videogames, although it has not yet received widespread interest from the general public. Its adoption has been held back by high price tags, complicated setups, and the requirement to have a powerful computer to play most games, although as the technology matures these issues are slowly being addressed.
Other technologies that are being trialled include video streaming to create live games, and some smaller brands and startups are experimenting with blockchain technologies.
Legislation Changes
In 2018, changes to US federal law meant that states could set their own rules for sports betting online. It means that a relatively untapped and wealthy market, where most online wagering as been outlawed for many years, is slowly opening up. It is expected that 32 states could have legalised sports betting within the next three years.
This will likely see further investment in the types of sponsorship and advertising that we have already seen in the sports betting markets.
Some pundits are also looking to Asia as the next target for changes in legislation, although this will not likely happen quickly. Most of the biggest countries in Asia have laws against online wagering (or wagering altogether), although some countries seem to be slowly changing their minds. For example, Japan recently made it legal for a small number of land-based casinos to operate, although they are yet to open.
In Conclusion
The iGaming industry became what it is today thanks to developments in technology, helping it to become a multi-billion dollar global industry. It is expected that it will continue to grow for the foreseeable future.
While technology has fueled a lot of its growth in the past, the current innovations don’t look as promising as smartphones were a decade ago. Instead, the majority of the short term growth will likely come from new markets opening up, and existing markets continuing to see investment.