iGaming Keeps on Getting Bigger
The iGaming industry is a juggernaut that keeps on growing, despite being just 25 years old. Born out of a combination of legal and technological changes that took place during the 1990s, iGaming quickly took off, as the interest in online real money games boomed.
The passing of the Free Trade and Processing Act in Antigua and Barbuda kick started the development race amongst iGaming websites, but this would not have been possible without the rapid expansion of computer and internet use. Its success has seen the industry grow from nothing, to generating annual revenues of over $50 billion in less than three decades.
What is iGaming?
iGaming is the term given to online versions of real money acivities that you would usually play in casinos, bingo halls, and bookmakers. This includes card games like poker and blackjack, table games like roulette, slots, sports betting, and bingo.
Like their offline equivalents, many iGaming companies allow their customers to place wagers on their games, although most also offer free to play versions where wagering is not required.
The First iGaming Company
The first iGaming company to launch a service was an online lottery based in Switzerland, although it was much more primitive than what we are used to today. After this lottery launched in 1995, a further 200 or so iGaming websites followed suit in just 12 months.
Growth of the Industry
Photo by Lucian Novosel, License
Significant growth came from the creation of a service that provided convenience to customers. Online casinos and bookmakers let customers place wagers and play games without the need to leave their home. This was particularly important for customers who did not live near a casino.
Further growth came when games were developed that suited the playing habits of women, who were looking for a more casual and social experience. Mobile apps, particularly ones that offer bingo games, were a key success in this market.
Sports betting also became a big growth area in the mobile era, as customers could place bets on games whilst watching them at the stadium or in front of their TV.
Maturing Market
Whilst there are still many regions where iGaming companies are yet to penetrate, legislation is the main barrier to entry in these markets. Once legal changes take place in these markets, iGaming companies will quickly race to acquire large market shares. For example, the United States has begun to legalise online sports betting in some states, leading to many large iGaming brands investing heavily in this emerging sector.
Further growth in existing markets is much slower, as the number of new customers who have never used an iGaming service before are much smaller. In line with the “product life cycle theory” of Raymond Vernon, companies are now having to compete with each other for existing customers. They do this by offering attractive sign up bonuses and free bet offers, which aim to help the customer save money.
Secondary markets in the industry have also developed within and around the iGaming industry. For example, companies like Oddschecker provide free services to consumers that allow them to compare the odds of different bookmakers. They also act as information hubs, as offering advice on picks for upcoming games to enable sports fans to make more informed choices.
Blurring the Lines
Larger iGaming brands are blurring the lines between the online world and the offline world, sponsoring events and organising real life tournaments that players can qualify for online. An example of this is the PokerStars Live events, which are held in multiple European countries, Asia and Brazil.
Other blurring of the lines between the online world of iGaming and the real world can be seen in the development of “live casinos” and Virtual Reality games. These are technological solutions that try to authentically recreate the experience of visiting a land based casino, without actually having to be there.
Live casinos are run by real human dealers and croupiers who are filmed live and interact with online customers. In VR games, a similar experience is created but in a fully immersive, virtual reality environment that allows the player to experience the full casino setting - just like in real life.
Scope for More Growth
The original iGaming services put casino games into people’s homes for the first time. Over time, a more convenient experience was offered by the creation of mobile games and apps. Live casinos and virtual reality are more specialised experiences - not every online gamer has access to a VR headset, for example - so they may not be particularly significant drivers for growth.
Instead, future growth of the industry is more likely to be driven by the development of new markets rather than techological innovation. Examples of this include the move to invest heavily in the newly opened markets in the United States.
(intro photo courtesy of Photo by Persnickety Prints, License)
- Payton O'Brien, Gambling911.com Senior Editor
