Appraising the Future Growth of Online Gambling

Posted by Harry Kane on Wednesday, April 18, 2018

While it’s well known that the online gambling market represents a growth industry, the strength and consistency of this growth must be seen to be believed.

This has been borne out by a recent report commissioned by Research and Markets, which has predicted expansive and sustained growth during the course of the next three years.

The report, which has been prepared based on in-depth market analysis from established industry experts, has offered a key insight the gambling market and its potential growth between 2017 and 2021. The results are striking, while they suggest that growth within the market is set to continue unabated in the near-term.

In this post, we’ll consider these figures in further detail, and appraise the key factors that are likely to drive to such relentless growth.

How Will the Market Grow During the Next 3 Years?

While the report offered a number of fascinating insights, it was the headline number that really caught the eye.

More specifically, the report claimed that the online gambling market will grow at a CAGR (compound annual growth rate) of 9.36% between now and 2021. This trend began last year, when the UK marketplace alone generated a gross gambling yield of £4.5 billion and grew to account for an impressive 34% of the overall industry.

If we take these figures at face value, the overall market share claimed by online operators will surely increase during the next three years, potentially exceeding 40% by the end of 2021.

This means that the prevalence of offline gambling will endure a simultaneous decline, thanks primarily to significant demographical shifts, changing consumer behaviours and the implementation of more stringent regulatory measures.

What Factors Will Drive this Growth?

While it’s fair to say that online gambling will grow in part as a result of generational shifts and the demise of traditional gameplay, the evolution of the virtual marketplace will also prove to be a key driver. More specifically, the pace of technological advancement will continue to enhance the online experience for gamblers across the board, create a compelling proposition that makes bricks-and-mortar betting increasingly moribund.

The recent report highlighted the emergence and popularisation of Bitcoin as a key growth factor, for example, as cryptocurrency continues to become increasingly prevalent in the virtual gambling space. This is part of a wider initiative by operators to create a more diverse range of currencies and payment options for customers, which has since Bitcoins joined by Euros, Dollars and additional e-wallet solutions.

The acceptance of Bitcoin is particularly important, however, thanks primarily to the decentralised nature of the blockchain technology that underpins in. This innovative software allows users to complete instantaneous transactions, while minimising charges and protecting operators from the risk of significant currency devaluation. Bitcoin, along with similar cryptocurrencies, also allows for user anonymity, which is a key concern among players in the digital age.

Overall, this is helping to establish Bitcoin as the ideal solution for both gamblers and online operators alike, while enabling the industry to grow and benefit from sustained consumer demand. Interestingly, there are also suggestions that the cryptocurrency Ethereum may be used to power the transparent, zero house edge casinos of the future, which would represent another seminal development within the industry.

The diversification of the online playing demographic is also an interesting consideration, with female gamblers becoming increasingly prominent in the marketplace. As long ago is 2015, women gamblers accounted for 49% of all online revenues in the UK, with studies suggesting that females had been empowered by the rise of mobile gaming and the promise of anonymity. This is part of a wider trend in the world of gaming, of course, with a 2014 study having previously revealed that 52% of the global gaming audience were female.

While online gambling is now appealing to a far broader and more diverse audience, it is also becoming increasingly popular among older players. In fact, the percentage of 55 to 64 year-olds gambling online increased considerably last year, climbing to 18.6% from just 13.1% in 2016. This represented one of the biggest demographical shifts in the market, while it was indicative of a wider trend that saw players over the age of 35 make the transition online.

This represents an important development, as older players aged 55 and older tend to be more established and boast higher levels of disposable income. Typically, they’re also likely to have a higher proportion of leisure time in which to access online casinos, meaning that they boast the means and the opportunity to gamble frequently.

This will produce a higher net spend overall, while creating a more diverse consumer base that allows for sustained growth in the future.

Aside from this, the widespread adoption of mobile broadband could also serve as a key trigger for future growth in the global industry. At present, fixed-line broadband does not have a strong presence in developing nations due to its high infrastructure costs, and this has been a deterrent to the growth of online industries within these regions.

In contrast, mobile broadband boasts lower costs and is more readily accessible, and this spurring higher levels of growth and online gambling activity across the globe. With this technology set to benefit from further adoption during the next three years or more, it is considered to be a significant factor in the growth forecast presented by Research and Markets in their most recent report.

The Last Word

As we can see, there are a number of factors that are set to inspire growth within the global gambling market between now and 2021. From those that are obvious to others are more obscure, they’re set to combine and have a cumulative impact on a marketplace that has continued to evolve rapidly during the last eight years.

The diversity of these factors also hints at strong and robust growth during this time, as the industry will not be reliant on just one or two triggers for further expansion.

Whatever happens, this will be an interesting space to watch between now and 2021, as online gambling continues to thrive as one of the most lucrative growth markets anywhere in the world.