Will iGaming Really Hit $1 Trillion in 2022?

Posted by Harry Kane on Tuesday, March 8, 2022

There’s no doubt that iGaming represents big business throughout the developed world, although it has typically been the UK and Europe leading this charge over the course of the last decade. However, the scope and scale of the global market has changed with the advent of legalised gambling and sports betting in the US.

According to recent forecasts, this could create a scenario where the cumulative value of iGaming bets could break the $1 trillion barrier by the end of 2022. But just how likely is this? Let’s find out!

What Does the Research Tell Us?

The recent findings have been delivered by Juniper Research Limited, which is a forecasting and digital technology consulting firm based in Chineham, England. Its analysts have been taking a close look at the key financial and technological trends in the global iGaming market of late, noting a considerable uptick in volume and activity in the process.

To summarise their findings, it has been suggested that various market factors are combining to drive exponential global growth, including a rise in the number of digital products and the advent of mobile gambling.

However, the most prominent factor is a rise in the number of more progressive regulatory changes and attitudes prevalent across the globe, particularly in the US. In fact, the sports betting and cash app markets have boomed stateside in 2018, but we’ll explore this in a little more detail later in the piece.

The bottom line, however, is that the global value of iGaming could peak above $1 trillion by the end of this year. Not only is this larger than the value of annualised debt in the US, but it would represent a huge hike from the $620 worth of wagers that were placed throughout the world in 2017.

What’s Driving Such Growth

When analysing these numbers in more detail, we see that the rise of online and mobile gambling remains a key and hard to quantify trigger. This is especially true in mature and progressive markets like the UK, where more than 50% of regular gamblers now wager through their smartphone or tablet.

In the ‘eSports, Let’s Play & Watch Play: Monetisation & Engagement Strategies’ report produced by Juniper, online casinos now account for around 40% of all wagers placed remotely across the globe. This trend is reflected almost exactly in the UK, with the rise of online gambling have created far greater market accessibility while reaching out to an entire generation of casual gamblers and increasing the number of active accounts.

It total, the American Gaming Association (AGA) claims that there are in excess of 3,000 licensed gambling sites active within the digital realm, the majority of which are active in multiple international markets and based in tax-friendly iGaming havens such as Panama, Curacao, Costa Rica, Gibraltar and Malta.

This has been more of a gradual change, however, the impact of which has been largely overshadowed by the strong and rapid growth of activity in the US. Historically, this has been a complex and problematic marketplace, and one that has been burdened by oppressive legislation at both state and federal level.

Before 2013, for example, no US state allowed online gambling of any description, while all forms of sports betting were prohibited by the Professional and Amateur Sports Protection Act (PAPSA) legislation of 1992.

Since 2013, however, a total of six states have legalised online casino gameplay, namely New Jersey, Delaware, Pennsylvania, Michigan, West Virginia and Connecticut. Then, in May 2018, the US Supreme Court struck down the PAPSA legislation, enabling individual state authorities to make their own laws pertaining to sports betting (both on and offline).

There has since been a significant rush to market, with more than two dozen having legalised sports betting either offline or through licensed mobile applications. Multiple states are also preparing legislation to follow suit, with a view to creating huge tax revenues from the profits garnered by operators.

Through 2021, the value of legalised sports betting in the US doubled, with a staggering total of $52.7 billion wagered throughout the year. This was due largely to the addition of eleven states who legalised sports betting last year, and the billions of advertising dollars investing in targeting and incentivising players.

This also drove an increase in the number of players active in the US market and the size of their stake, with 12% of adults wagering at least once a week (up from 5% in January 2021) and 14% of punters claiming that their average stake is more than $100. States such as New Jersey (which is a trailblazer for online gambling) and Michigan also posted well over a billion dollar in iGaming revenues through 2021, while continuing to set monthly turnover records throughout.

These numbers are indicative of a huge and fast-growing market, and one that continues to scale rapidly across the board. As a result, it’s this that’s driving incessant growth in the global market, with a target in excess of $1 trillion more than likely as further states move to legalise sports betting.

The Bottom Line

Ultimately, the growth and scale of the US market is central to the performance of iGaming globally, as it remains a burgeoning and immature space with incredible room to grow and incredible demand nationwide.

Conversely, markets like the UK and those in Europe (like Italy) are mature and have largely peaked in terms of growth, meaning that there isn’t a great deal of space for further expansion in the near, medium or longer-term.

So, whether or not the global iGaming market takes more than $1 trillion in bets will rest squarely on the shoulders of North America, while it will depend on factors such as the level of demand within individual states and the number of additional authorities that look to legalise sports betting and casino gameplay through the remainder of 2022.