On the face of it, it’s a very good time to be involved with – or investing in – the iGaming industry. Most experts see the continued growth of online betting and gaming throughout the 2020s, with the global online gambling industry predicted to generate over $90 billion in revenue by 2024. That’s well over $30 billion added from the 2019 figures; quite remarkable when you consider the industry is over 25 years old.
There are many reasons to be cheerful for online operators: The growth of online gaming in the United States is notable after that historic Supreme Court ruling in 2018. But there are also opportunities in places like India, where a growing tech-savvy middle class is demanding modernisation of gaming laws. And, you have the fact that more and more people have access to smartphones and good internet coverage than ever before.
But there are some challenges to the iGaming industry, five of which we will discuss in some detail below:
The Hand of the Regulator
In the UK, and in several other countries, government regulators have been making moves to control how much and through what means a player can spend. Banning the use of credit cards for depositing is a sensible idea for player protection. But mooted proposals like lowering stake limits and affordability checks have seen pushbacks from players and campaigners. It’s better for everyone if regulators promote responsible gambling, but the fear for operators is that it goes too far. There is a perception that online operators are set to be punished simply because they operate on the internet. As the argument goes: Why should a UK player be limited to checks and a £2 stake, when they could walk into a swanky Mayfair casino and bet 100 times that amount with no questions asked?
Millennials
There is a lot of discussion as to whether millennials have not warmed to playing casino games in the same way as previous generations. This is countered by an assertion that they will, eventually, become more attracted towards playing as the generation ages. There is probably a bit of truth in both. However, when checking the description of Aces and Faces, and other casino games regarded as traditional, like blackjack and roulette, you might wonder whether such classics hold an allure for a generation brought up on PlayStation and Xbox. However, it seems that casino operators are well aware of this, and have placed titles that resemble video games, both in graphics and gameplay, alongside the more familiar casino stalwarts.
Cryptocurrency
Here’s the thing about cryptocurrency, casinos and betting sites. You’ll find 100s of sites online that accept tokens like Bitcoin and, indeed, have built their business model around that fact. However, these sites are not – at the time of writing – licensed by the major regulators like the UKGC or MGA. Gaming regulators simply do not like cryptocurrency, although most are claiming to explore the viability of it. The upshot is that we are starting to see a two-tiered gaming industry: One that is regulated and adhering to new protocols; and, another which is largely unregulated and, potentially, unsafe for players.
Too Much Competition
At big blue-chip sporting events, such as the Cheltenham Festival or the Super Bowl, it seems that online bookmakers fall over themselves to offer lucrative promotions to players. The prize here is to
sign up new loyal customers who have become interested due to the big sports event, but the fact that the promotions seem to get more generous each year is indicative of how operators are reacting to each other. We won’t say it’s saturated yet in a market growing globally, but one wonders whether a tipping point will be reached in the coming years, and if such competition is viable. Everything from promotions to standing out in Google rankings is up for grabs in a power struggle with an increasing number of players.
The Video Game Industry
We mentioned above that millennials and, increasingly, Generation Zers might eschew gambling games in favour of playing video games. But there is a clear and present danger to the traditional gaming industry here. Things like loot boxes, esports betting and even casinos within games, like Grand Theft Auto V, have all combined to present competition to the iGaming industry. Again, operators and games developers have reacted, modernising casinos and sportsbooks to offer sophisticated games and betting markets like never before. But will it be enough?
