Online Gambling Market - Size, Trends and Analysis made by The AI Group
The global online gambling industry was valued at USD 70 billion in 2022
What is Online Gambling?
Online gambling is referred to as online gambling or Internet gambling, including online games. In other words, any gambling that takes place over the Internet is online gambling. This includes betting on live or virtual games. Online gambling and betting involves three elements, namely stake or consideration, risk and prize.
How Big is the Global Online Gambling Market
The global online gambling industry was valued at USD 70 billion in 2022 and is expected to grow at a CAGR of 11.7% from 2023 to 2030. The growth is driven by factors such as the increasing internet penetration and growing use of mobile devices for online gaming. With 92% of the US population having internet access in 2022, the demand for online gambling is on the rise. Additionally, cultural acceptance, legalisation, ease of access, celebrity endorsements, and corporate sponsorships are also contributing to the market growth. An example of this can be seen in the partnership between PokerStars and Cristiano Ronaldo, where he was signed on as a brand ambassador and featured in the company's advertisements in May 2021.
The expanding use of smartphones and the 5G internet technology is fuelling market growth. As of November 2022, there were 127,509 5G deployments in 128 countries, according to Ookla LLC. Advanced features such as augmented reality, machine learning, and artificial intelligence on modern smartphones allow developers to create engaging and interactive gambling apps. Additionally, the availability of affordable smartphones is also driving market growth.
Advances in digital technology are paralleling the growth of online casinos and are aimed at increasing trust in the online gambling industry. One such example is the use of virtual reality (VR) in gambling, which provides a simulated environment that users can interact with using special hardware. VR allows for a more realistic gambling experience by enabling interaction with other players and dealers, as well as improved sound quality and game design. An example of this can be seen in SlotsMillion online casino by SLTM Ltd., which offers a VR mode.
Online casino developers prioritise solutions that ensure the security of gamblers, validate gambling activities, and prevent fraudulent activities. To attract new users, many online gambling sites offer a free version of their games. These versions generate revenue through advertisements on their website or app. For instance, online gambling platforms sell advertisement space on their website or within the app. The online gambling industry is growing in popularity due to the convenience and accessibility it provides to players worldwide.
The incorporation of blockchain technology has had a significant impact on market growth. In addition to traditional payment methods, gambling apps and websites are now accepting payments via blockchain. One example is BitStarz, a bitcoin-based gambling platform with around 4 million regular players. The use of blockchain provides secure and transparent payment transactions through blockchain ledgers. Cryptocurrency-based gambling offers numerous benefits such as fast and safe transactions. Due to the fewer regulations and restrictions on cryptocurrency, it is increasingly being used by players in online gambling.
Online Gambling Market by Type
The online gambling market is divided into poker, sports betting, bingo, casinos, and others. The sports betting segment held the largest revenue share of around 50% in 2022. This can be attributed to the increasing popularity of sports betting on games such as rugby and soccer, as well as high internet penetration. Market growth has also been driven by partnerships between gambling software developers and private companies to create user-friendly gaming solutions. For example, in September 2022, Amazon.com, Inc. teamed up with DraftKings Inc. to make it the exclusive sports betting app for soccer games broadcast on Prime Video.
The casinos segment is expected to grow at a substantial CAGR during the forecast period from 2023 to 2030, due to the popularity of casino games like blackjack, virtual slot machines, and others. The trend of fast-paced casino games is driving this segment. For instance, Lucky Block online casino website offers over 100 live and interactive casino games. The availability of customer support also attracts users to play these games without any concerns.
Online Gambling Market by Region
In 2022, Europe held the largest market share in the online gambling industry with a revenue of over USD 26 billion. This growth can be attributed to the legalisation of gambling in European countries including Italy, France, Germany, and Spain. Additionally, the high penetration of high-speed internet, the increasing popularity of online casinos, and the widespread use of smartphones have all contributed to the market growth in the region. A study by the European Gaming & Betting Association showed that sports betting held the largest share of the online gambling market in 2022. The Gambling Act 2005 imposed by the UKGC (U.K. Gambling Commission) has also allowed companies to promote their gambling websites, further driving market expansion in Europe.
The Asia Pacific region is expected to experience rapid growth in the online gambling market due to the widespread use of internet services and relaxed restrictions on online betting. The growing popularity of cryptocurrency for gambling purposes, specifically the adoption of bitcoins, is also contributing to the market's expansion. With rising spending on leisure activities and a strong economic performance, the Asia Pacific region, including key players like China, India, and Japan, is poised for significant market growth in the coming years.
The online gambling market in North America is estimated at USD 7.5 billion by 2022. Increasing digitisation, coupled with secure mobile solutions, is likely to drive the demand in the region.
In the U.S., three states – Nevada, Pennsylvania and New Jersey – have gambling regulations in place and only gaming companies with a Nevada, Pennsylvania or New Jersey license can legally operate under current U.S. online gambling legislation, with the largest legal Internet gambling market in the U.S. being in New Jersey.
Canada is largely uncontrolled when it comes to online gambling. Meanwhile, Mexico evaluates its gambling regulations to harmonise them with the country’s overall gaming industry. As a result, the market is expected to continue to grow as online gambling becomes more mainstream in North America.
In the U.S., three states – Nevada, Pennsylvania and New Jersey – have gambling regulations in place and only gaming companies with a Nevada, Pennsylvania or New Jersey license can legally operate under current U.S. online gambling legislation, with the largest legal Internet gambling market in the U.S. being in New Jersey.
Canada is largely uncontrolled when it comes to online gambling. Meanwhile, Mexico evaluates its gambling regulations to harmonise them with the country’s overall gaming industry. As a result, the market is expected to continue to grow as online gambling becomes more mainstream in North America.
Online Gambling Market Drivers
The online gambling market is driven by growing smartphones, increasing internet penetration, and increasing personal spending power. Increasing smartphone and internet penetration and easy access to casino gaming platforms are positively impacting the market statistics. Online gambling software providers are investing heavily in advanced technologies to enhance customer experience, which will increase player interest and maintain player engagement.
Development of mobile and remote payments provides a hotbed for online gambling market growth.
The growing popularity of digital and mobile payments has made the payment process easier for users and online players. Moreover, online payment facilities provide a safe and secure mode of transaction, facilitating their adoption in the online gaming industry. In addition, simpler and more convenient payment methods have promoted player participation in the gaming industry.
The comfort of remote payments has created tremendous opportunities for online gamblers to promote and drive business cash flow. For example, Visa, MasterCard are offering secure debit and credit card payment options for online casino accounts and companies like PayPal and Neteller are offering e-wallet services for online gambling.
The growing popularity of digital and mobile payments has made the payment process easier for users and online players. Moreover, online payment facilities provide a safe and secure mode of transaction, facilitating their adoption in the online gaming industry. In addition, simpler and more convenient payment methods have promoted player participation in the gaming industry.
The comfort of remote payments has created tremendous opportunities for online gamblers to promote and drive business cash flow. For example, Visa, MasterCard are offering secure debit and credit card payment options for online casino accounts and companies like PayPal and Neteller are offering e-wallet services for online gambling.
Blockchain and virtual reality technologies provide better accessibility to the online gambling market
Continuous technological advancements have also largely facilitated the expansion of the market. Significant developments include business models such as virtual currency and social casinos, gaming formats, in-play sports betting, and mobile geolocation. Virtual reality and blockchain technologies are expected to drive the growth of the online gambling market and there are huge investment opportunities in the market.
The increasing inclination of market players to provide realistic gaming experience through virtual reality (VR) will positively impact the market space.
Continuous technological advancements have also largely facilitated the expansion of the market. Significant developments include business models such as virtual currency and social casinos, gaming formats, in-play sports betting, and mobile geolocation. Virtual reality and blockchain technologies are expected to drive the growth of the online gambling market and there are huge investment opportunities in the market.
The increasing inclination of market players to provide realistic gaming experience through virtual reality (VR) will positively impact the market space.
In various countries that have legalised offline and online gambling, consumers are increasingly preferring online live casinos over traditional brick-and-mortar casinos, which is strongly favouring the market growth. The shift of players from offline to online gambling has created lucrative growth prospects for online casino operators. Many professional players prefer live casinos because they help them keep track of their moves. In addition, they offer live games with live dealers, live chat features and games that can be played anywhere, anytime.
The emergence of advanced technology-based live casinos is expected to drive market growth over the forecast period. 2021, with the rapid growth of the iGaming industry in the U.S., Evolution has launched its third live casino studio in Michigan as part of its business expansion strategy. According to the company, the Live Casino Studio provides modern B2B live casino solutions for multiple operators seeking to provide an enhanced live casino gaming experience for online players on smartphones, desktops and tablets.
Live casinos are also growing in popularity because they do not require real money when gambling and allow inexperienced players to participate without fear of losing money. Due to these benefits, the number of live casinos is rapidly increasing, creating lucrative opportunities for the online gaming market during the forecast period.
Impact of COVID-19 on the online gambling market
The coronavirus outbreak has caused extensive restrictions on land-based gambling venues. Restrictions on public transportation, travel, and public gatherings have largely affected the offline gambling industry.
However, the COVID-19 pandemic has spiked demand for Internet-based gambling in various countries, with online gambling in Australia growing by 67% in April 2020. Similarly, internet gambling in the UK grew by 7.5% in 2020. As a result, the shutdown of non-essential services during the pandemic-induced blockade facilitated the adoption of online gambling by users.
The coronavirus outbreak has caused extensive restrictions on land-based gambling venues. Restrictions on public transportation, travel, and public gatherings have largely affected the offline gambling industry.
However, the COVID-19 pandemic has spiked demand for Internet-based gambling in various countries, with online gambling in Australia growing by 67% in April 2020. Similarly, internet gambling in the UK grew by 7.5% in 2020. As a result, the shutdown of non-essential services during the pandemic-induced blockade facilitated the adoption of online gambling by users.
Online Gambling Market Restraints
Growth of the online gambling market provides a breeding ground for cybercrime.
The promising growth of online gambling has attracted cybercriminals who use bots to target funds transferred through various payment gateways, including electronic checks, wire transfers, and credit cards. As a result, market players are taking profound steps to address these issues by raising user awareness and urging them to use anti-virus software on their smartphones and PCs. In addition, companies are using third-party applications to protect their websites and promote secure online payment transactions. Federal law restricts the use of wired communication facilities in gambling activities or sports betting because the facility includes the Internet. However, the Internet enables players to maintain anonymous identities and exit gambling sites immediately, which makes it difficult to track gambling activity.
The online gambling market is having a negative impact on users’ physical and mental health
The increasing adoption of Internet-based gambling by users is having a negative impact on mental health. The increasing reliance on easily accessible Internet-based gambling platforms challenges users to maintain psychological balance. As a result of this addiction, the number of suicides is increasing every year. Other addictive effects of gambling are pathological gambling, also known as compulsive gambling. The long-term effects of such gambling may trigger chronic stress and hypertension problems.
The increasing adoption of Internet-based gambling by users is having a negative impact on mental health. The increasing reliance on easily accessible Internet-based gambling platforms challenges users to maintain psychological balance. As a result of this addiction, the number of suicides is increasing every year. Other addictive effects of gambling are pathological gambling, also known as compulsive gambling. The long-term effects of such gambling may trigger chronic stress and hypertension problems.
State/Government Bans on Online Gambling
Due to the increased risk of problem gambling behaviour, many countries/regions have imposed bans on gambling sites. Countries such as Russia, UAE, Qatar and Poland have implemented gambling bans. For example, the UAE Telecommunications Regulatory Authority controls Internet content and activity, thereby blocking access to online casinos. In addition, some countries such as India, Singapore, and Japan may impose bans on gambling. All of these key factors may hinder market expansion.
Due to the increased risk of problem gambling behaviour, many countries/regions have imposed bans on gambling sites. Countries such as Russia, UAE, Qatar and Poland have implemented gambling bans. For example, the UAE Telecommunications Regulatory Authority controls Internet content and activity, thereby blocking access to online casinos. In addition, some countries such as India, Singapore, and Japan may impose bans on gambling. All of these key factors may hinder market expansion.
Safety Risks in the Online Gambling Market
Online gambling also involves the risk of application-based hacking. For example, live casino mobile applications can be easily manipulated and intercepted by sharing Wi-Fi and 4G signals. In addition, cybercriminals can manage applications by distributing fake versions that contain malware. Today, some casinos use standard 128-bit encryption and back up their customer data remotely. As a result, data will be secure even if the site is challenged by a denial-of-service (DoS) attack.
Online gambling also involves the risk of application-based hacking. For example, live casino mobile applications can be easily manipulated and intercepted by sharing Wi-Fi and 4G signals. In addition, cybercriminals can manage applications by distributing fake versions that contain malware. Today, some casinos use standard 128-bit encryption and back up their customer data remotely. As a result, data will be secure even if the site is challenged by a denial-of-service (DoS) attack.
Key Companies & Market Share Insights
Key players in the market are taking strategic steps like partnerships and acquisitions to broaden their offerings and draw in new customers. As an example, in January 2023, PokerMatch made its way into the Indian market via its partnership with Playtech plc. Likewise, in August 2021, DraftKings Inc. acquired Golden Nugget Online Gaming, Inc. and its customer base. The leading players are also focused on introducing continuous innovations to differentiate and tailor their product offerings to attract potential users.
The market players are making efforts to expand their user base by making the setup process easier and more accessible. This is being achieved through compatibility with various devices and the integration of multiple payment options. The top players in the online gambling market include: William Hill, Bet365, Flutter Entertainment, Betsson AB, Ladbrokes Coral Group, StarsGroup.com, 888 Holdings, Sky Betting and Gaming, Kindred Group, and GVC Holdings.
