Will Esports Become One of the Top 5 Betting Markets by 2024?

Posted by Harry Kane on Monday, August 30, 2021

Despite its growing prevalence across the globe, esports remains a slightly misunderstood market and one that continues to exist on the periphery of the consumer mainstream on these shores.

However, there can be no doubt that it has the potential to command a huge audience in the UK, having already captured the imagination of huge swathes of the population in China, the US and Germany.

According to some projections, the global trajectory for esports betting is set for a sharp ascent during the next three years. But where will it ultimately stand on the pantheon of the most popular sports amongst punters in the UK and across the globe?

The Growth of Esports Betting Around the World

The overall esports betting market was projected to double last year, from $7 billion to 2019 to a little over $14 billion at the end of 2020.

In terms of the gross gaming revenues (GGR) and profits generated for esports operators, this translates into a sum just north of $343 million through 2020. However, by 2024, it’s estimated that this number will peak at $862 million, which the RTSmunity platform projects will place esports betting in top five sports from the perspective of punters worldwide.

But what does this mean in terms of the potential esports betting share of the global sports wagering GGR? Well, in 2019, the $247 million GGR generated by esports betting accounted for an estimated 1.6% share of the total wagering yield, while the $343 million accrued in 2020 represented a 2.1% share of the cumulative marketplace.

However, the projection of a $862 million GGR in 2024 would also precipitate an increase in the total market share of esports betting, elevating this number of 3.2% across the globe.

From a UK perspective, May 2020 alone saw the GGR generated by esports wagering nudge just past the $6 million (£4.6 million) mark. This was a record breaking, four-weekly number for esports betting in Britain, while it’s indicative of the type of exponential growth being experienced within the sector as demand and awareness continues to build.

Delving Deeper into the UK Marketplace

If we drill deeper into the UK market for esports betting and its role in the wider remote wagering space, we see that the sector has grown markedly in line with increased viewership figures.

More specifically, a recent YouGov study found that as many as four million Brits have previously watched an esports event or tournament, with this equating to 7% of all UK adults.

What’s more, 57% of this number are keen to do so again, highlighting the demand that exists for esports gameplay and the betting markets that open as a result of this. Overall, the esports niche grew at a CAGR of 8.5% between 2016 and 2019, contributing just 8% of the worldwide market value and generating £60 million in revenue prior to 2020.

As we’ve already touched on by referencing the GGR generated last May, this growth has also translated into increased levels of betting.

For example, the revenues take by gambling brands through esports wagers reached £1.5 million in March of last year, with this representing incredible year-on-year growth of 2,922% (up from just £50,000 in March 2019).

In April, a hefty £3.4 million was wagered across various esports betting markets, with this representing a month-on-month increase of 124%. Interestingly, some of these figures could be even higher, with the data released by the UK Gambling Commission only covering an estimated 80% of the iGaming market on these shores.

OK, we hear you ask, but where does esports betting site within the remote betting market as a whole in the UK? The total GGY for remote sports betting totalled £1.0 billion in the year ending September 2020, with this yield dominated by football and horse betting.

According to the granular data, football remains the omni-potent sport from the perspective of bettors, with the wagers placed on worldwide matches and tournaments accounting for 47% of total money spent by players.

Next up is horse racing, which despite a marked decline in recent times remains the second most popular sport for punters. In fact, horse racing bets comprise 27% of the total money spent by bettors, while tennis, virtual, greyhound racing, cricket and golf trail in the not-to-distant future.

The Last Word – Will Esports Really Become a Top 5 Sport Amongst Bettors?

Historically, if there’s an issue with esports betting from the perspective of operators, it’s the relative lack of profitability.

More specifically, Ondrej Silhavy has claimed that operators tend not to “run en-mass into esports betting”, with the average industry profit margin fluctuating between 1% and 5%. This compares negatively to the 7% to 8% overage for sports events as a whole, which may have previously deterred some sportsbooks from offering an extensive range of associated betting markets.

However, when writing in SBC Magazine, Silhavy claimed that RTSmunity’s average profit margin in excess of 10% in 2020 could be a significant game-changer in the minds of market leading sportsbooks. This would create a raft of the most profitable markets in the whole sports betting sphere, making esports wagering a key priority going forward.

This is just one of the reasons why esports is poised to enter the top five sports globally from the perspective punters by 2024, while the fundamental pace at which the market continues to grow offers more compelling evidence of its ruthless and seemingly unstoppable ascent.

In the UK market, esports betting could move even higher in the list at its current rate of growth, potentially nestling just behind football and horse racing over the course of the next three years or so. Globally, of course, we have to factor in alternative sports such as basketball and American football, with leagues such as the NFL generating a huge GGR throughout the world.