The global casino and gambling industry has become huge and generates billions of dollars per year in revenue. Globally, casinos had a gross gaming yield of about $115 billion in 2016, and it is forecast according to Statista.com is to reach $130 billion in 2019. In 2015, the gross gambling revenue (GGR) in Europe was 18 billion euros in Italy, 17.9 billion euros in the UK, and around 8 billion euros in Germany, France, and Spain.
Figure 1: The Size of the Online Gambling Market; Source: Statista.com
One of the greatest changes in the casino industry has been the introduction of online casinos and gambling sites. Online gambling includes activities, such as poker, casinos, sports betting, bingo, and lotteries. Among these, sports betting and casino games make up the largest share of the online gambling market. In 2015 the estimated number of gamers worldwide reached 173 million. In 2017 online gambling generated over 40 billion dollars in revenue globally. The projected trend is that the size of the global online gambling market will reach almost 60 billion dollars in 2020.
The size of the online gambling market in Europe has increased from 12.79 billion dollars in 2012 to 24.75 billion dollars in 2018. Europe has become the largest market for online gambling in the world: in 2015 the EU market made up 47.6% of the €34.6 billion of online gaming gross wind generated. The main reason why Europe has become the leader in online gambling is its increasing level of innovation, especially the rising number of casino platforms.
Figure 2: The Size of the Casino Gambling Market vs. the Size of the Online Gambling MarketSource: Statista.com
Across the UK, US, and Australia, 37% of PC and mobile players play social casino games, such as slots, poker, blackjack, and roulette. The UK has the largest share of players with 58%.
Regarding the way in which consumers use online gambling, a 2016 survey by the UK Gambling Commission showed that the most popular way for gamblers to access online gambling sites is through laptops, with 61%. The latter is related to the fact that97% of people prefer to do their online gambling at home while 17% say they also do it while commuting or when they are outside. Nevertheless, the use of mobile phones for accessing online gambling games is on the rise as well.
Figure 3: Share of people who gamble online in the UK by age group; Source: Statista.com
According to the results of a survey on the proportion of people within different age groups who gamble online on a monthly basis in the UK, 24.5% of respondents between the age of 25 and 34 took part in online gambling in the past four weeks as of March 2017/2018. This age group also ranked the highest in the proportion of people who gamble online. The second highest group of people who gamble online in the UK for 2017/2018 is the age group 35-44 at 22.8%. According to the survey, there is a decrease in the proportion of people who gamble online between the age of 16 and 24 years:15.7% of respondents said they gambled online in 2016/17 compared to 12.8% in 2017/18.
The gambling market in the Scandinavian countries is among the fastest developing markets in Europe. Known for innovation and technology, Sweden has been experiencing an increase in providing access to gambling, mainly on mobile platforms. In the Scandinavian countries, the internet coverage and the use of mobile devices are among the highest in the world. The underground online gambling market reaches 350 million euro in Sweden per year. On average, Swedish households spend 2.34% of their income on gambling per year which is equivalent to SEK 5,900 per person over the age of 18. A survey conducted on behalf of the Swedish gambling Authority in 2016 found that more than two out of every three Swedes had gambled in the previous twelve months.
The gambling industry also has a strong presence in Finland and surveys indicate that Finns can spend up to 10 billion euro on slot machines, online casino gaming, lottery tickets, and sports betting annually. The majority of Finns like gambling and the country takes fifth place in the list of largest gambling nations worldwide. According to a study on gambling habits in Finland conducted every four years, attitudes towards gambling became more positive from 2011 to 2015. Although online gambling traditionally attracts younger men, the study shows that online gambling has increased among men aged 55-64. The fact mentioned above shows the growing interest in online access to gambling games through mobile phones, tablets, and computers in all age groups.
The introduction of online gambling has transformed the casino industry and made it possible for gambling companies to reach out to consumers more easily, introduce new sorts of games, and present players with a 3D gambling experience.
Casino Industry Trends
The two cities known for their land-based casino industries – Las Vegas and Macau, may need to rethink the way casinos are designed and turn them into more socially welcoming spaces. This is due to the fact that their traditional consumer base has made way for a new generation constituting a different set of customers. The new generation of Millennials does not play games as much and looks for meaningful ways to socialize with others as a form of entertainment. With the development of technology and the rise in smartphone usage, the gambling industry is transforming. Here are some of the trends to watch out for in the coming years.
Figure 4: Platforms Used to Play Social Casino Games, 2017, U.S; Source: SuperData Research
With the advent of technology and smartphones, the gambling industry has been quick to adapt to the digital revolution. As smartphones have made gambling possible from every corner of the world, more and more gambling websites make their content mobile-friendly and create mobile apps for particular casino games.
The use of mobile devices for playing casino games provides online casino developers with access to data regarding consumers’ preferences and experiences with different games based on players’ information and response. Casino developers store the information and use it through the process of data analytics to examine consumers’ preferences and patterns and adjust their services to improve players’ experience. In that way, online casino providers can provide consumers with a personalized experience by suggesting games, bonuses, and promotions based on players’ characteristics.
With the growing popularity of mobile gambling, Google has announced its plans to enable consumers to play with real money by allowing Casino apps in the Google App Store. The major news means that the gambling industry will expand its market even more since an estimated 76.6 % of the people use Android.
On a similar note, the development of virtual reality (VR) technology in gaming has gained popularity in recent years. The casino gaming industry has started to incorporate VR in casino games to create a more realistic experience for consumers and make gambling more social. According to Veselin Lalev, CEO and co-founder of Gambling.se, “VR will surpass our expectations and the casino industry, particularly the mobile gambling segment, it will grow exponentially.”
With the development of VR in gaming, consumers will be able to immerse themselves into casinos, operate slot machines and communicate with other players from their homes. What is more, new VR technology allows players to enjoy even the small aspects of a real casino – they can walk around the casino, light up a cigar, and pour themselves a drink, for example. It is also possible to create virtual bingo halls and racecourses where players would be able to communicate and change their characters’ appearance. Gambling providers invest in the development of VR technology because they see it as an opportunity to attract the younger generation who are not as likely to play gambling games as their preferred form of entertainment. VR technology is considered to be better for smartphones and tablets since they have experienced the biggest growth in a number of new consumers. Since VR technology is still very costly and has been adopted by a limited number of companies, it will be interesting to follow the development of this trend in the coming years.
The development of artificial intelligence (AI) has also started to find its way in the online gambling industry. Many casinos are using AI-powered slot machines to detect instances of cheating and provide fair games. They also replace automated systems with AI to compete against players which can better predict players’ behavior and take relevant actions.
In the near future, casinos will likely use AI to replace the generators which currently control games and provide the new and enhanced user experience. With the help of AI, casinos will be able to collect data on why players choose specific games, stop playing and which elements in a game they find more interesting. AI will also provide consumers with a more personalized experience as they will be able to play in a virtual casino tailored to their personal preferences. Another benefit for players is that AI-driven agents will provide them with faster and customer-focused solutions to issues as they will be familiar with a player’s preferred games and habits. Another way in which AI will be incorporated in gambling is that it is expected to provide both the gambling industry and players with more accurate and realistic odds. Artificial intelligence engines would enable players to win more often and larger sums. AI can also be used in gambling to spot potential issues of gambling addiction. AI software can identify players who are inclined to develop gambling problems, notify them and prevent the negative consequences in due time which would greatly benefit the gambling industry.
Online casinos are beginning to incorporate more game-like elements to attract consumers. The use of loyalty points, avatars, narratives, tournaments, and leaderboards among others has helped increase gambling games popularity.
The trend of gamification is becoming more easily accessible through major online platforms, such as Facebook, Twitter, and Messengers. According to Michael Dunphy, mobile product manager at betting industry supplier SIS, “Industry research has shown that online gamification plays an essential part of an overall experience which effectively engages with mobile customers. The mobile generation is far more used to gamification and social sharing, from the games and apps they use on a daily basis.” Gambling and bookmaking companies are starting to provide a more entertaining experience for users by using rewards, points, and prizes to build consumer loyalty and retain their players. In the coming years, providers are expected to incorporate more missions, competitions, and bonuses to attract more gamblers.
Live casinos have also been on the rise, and the trend will likely continue in the following years. Live games gain popularity because of their transparent rules, high-quality technical characteristics, and real-life experience. The use of live dealers and feeds creates the feeling of being in a land-based casino and attracts players from all over the world. In live casino games, gamblers have human croupiers dealing specialized cards from thousands of miles away. The main benefit of live casinos is that players need just a good internet connection and a graphics card to be able to play.
One of the possible future developments in live casinos will be the introduction of more game choices so that live casinos can differentiate themselves from their competitors. A possible trend is the development of more customized live dealer games which will include a choice of decks and a more personalized gambling experience for players. Another trend is the ‘Dual Play Roulette’ which lets players in land-based casinos play alongside online players. This type of casino is also equipped with multiple cameras to allow online players to view the game from different angles.
Skill games are games in which the outcome is determined by players’ skills rather than by chance or luck. Skill games are expected to gain more popularity as an increasing number of consumers applies their skills instead of relying just on luck. Thus, online gambling providers have started to develop games that incorporate various strategies and require the use of certain skills for players to move ahead. By requiring certain skills, this type of games will engage players for longer in comparison to games which are based purely on luck. With the introduction of skill games elements in slots and casino games, the gambling industry also tries to engage more Millennials who are looking for challenge and games that require a strategic approach. Skills games are not going to replace traditional casino games – they will become part of them to reach a new type of audience and improve consumers’ experience.
The segment of eSports betting will continue to grow over the next few years. Since the first international tournament in 2011, eSports betting has gained major popularity with hundreds of websites emerging. Those websites allow viewers to bet on numerous eSports events and tournaments and the eSports market is reportedly valued at $900 million. The eSports betting industry combines the new generation’s favorite pastime – playing games and watching sports games, and it is set to reach 600 million in the audience by 2020.
There are already mobile apps which allow consumers to place real money wagers online and it is predicted that in ten years sports betting might be integrated into every mobile device.
The introduction of blockchain technology and cryptocurrencies is another major trend in the online casino industry. Cryptocurrencies are gaining acceptance among casino players and across different fields, because they provide more autonomy and a higher level of security to players as they can buy cryptocurrency online, and deposit and withdraw it instantly with minimal fees. Therefore, allowing the use of cryptocurrencies in gambling games makes the increases the popularity of the casino industry. In addition, Bitcoins are no longer the only cryptocurrency used – Ethereum, Litecoin, Dash, and Ripple are among the rising currencies worldwide, and some of them are even more suitable for use in gambling than Bitcoins. Cryptocurrencies might also change the sports betting industry as their use makes bettors independent of banks when they wish to make deposits or move money.
Increase in Female Gamblers
With the development of online gaming opportunities and the change in traditional gender roles, the number of female gamblers has largely increased, accounting for 45% of online gamers. As land-based casinos are traditionally predominantly visited by men, women generally feel uncomfortable going to a real casino. An example of this trend can be seen in Finland where women reportedly regard online gambling games as a safe place. Therefore, online gambling presents many women with the opportunity to play on a regular basis without feeling intimidated by men. Online gaming companies have spotted that trend and begun to create online casinos that would appeal to female players.
What Will The Future Bring?
The gambling and casino industry is increasing each year and attracting more and more people as it embraces and applies technological advances and innovations. With the development of AI and VR technology and the increased use of smartphones, online gambling is likely to become a big part of players’ everyday lives. With the improved collection and analysis of big data, gambling providers will be able to create a more personalized experience for consumers and introduce more customized games and games which require skills and strategic thinking. Although predictions about the future are hard to make, a summary of a likely projection about the gaming industry includes an app that has voice and face recognition, updates players’ statistics and provides charts that enable easier ways to estimate your wins. Maybe? Who knows…What is certain is that the future is bringing some groundbreaking innovations which will further transform the gambling industry and enhance players’ experience.
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