The Growth of the iGaming Industry
The iGaming industry has come a long way since its humble beginnings in 1994, when the passing of the Free Trade and Processing Zone Act in Antigua and Barbuda fired the starting pistol on a race to become the first service to offer real money wagering. The winner of this race was an online lottery based in Europe, and within 12 months over 200 iGaming services were in existence.
In the proceeding 15 years, a period of growth, expansion and rationalization has occurred, leading to the formation of some major players in the iGaming industry. In recent years, the computer gaming industry as a whole has been experiencing growth of around 10%, with turnover in 2018 reaching $135 billion (up from $116 billion the year before). This growth is not expected to stop either, with global revenue expected to reach $180 billion in the next 2 years. Within this figure, $80 billion will be made up of just iGaming revenue. If the size of the revenue doesn’t put the industry’s size into perspective, also consider that 11% of the world’s total internet traffic comes from players of online casinos.
Growth at the Expense of Traditional Businesses?
E-commerce has been blamed for the decimation of traditional retail businesses, as they struggle to compete with the low prices, wide ranges and convenience offered online. It would therefore not be unreasonable to think that the iGaming industry was having a similar effect on the traditional land based casinos and high street bookmakers. However, this is not correct, meaning the growth of iGaming is not at the expense of traditional options; instead these are also experiencing growth.
Technology Driving Growth
Technology has driven growth in most sectors, including gaming. Improvements in technology help to provide a better experience to players, which in turn makes them want to spend longer playing games. Better and more realistic graphics, more features, more playing options, and a more realistic experience all helped to improve the iGaming experience after the launch of these services in 1995. Some of these technologies have included:
Mobile technology such as smartphones and tablets has helped to provide more opportunities for gamers to take advantage of the growing iGaming services. In 2017, mobile services accounted for 45% of the global iGaming market, a 20% increase on the previous year. The “play anywhere” services allow for not just traditional casino and card games to be played on the go, but for sports betting from mobile devices whilst at sporting events, or anywhere else.
It has also been reported that the development of mobile technologies has helped to attract more female players to the industry. Women typically prefer to place wagers in private, making them less likely to use high street bookmakers and land-based casinos. Research has also shown that they prefer mobile devices to desktop computers. This has led to the rise of several iGaming brands that are targeted specifically at women.
A 2018 report highlighted that live casinos are a major growth area for the iGaming industry, with this growth coming from their increased popularity and the fact that more iGaming companies are adding them to their portfolio of products. For example, PokerStars Casino features 6 different live games on its home page, including roulette, blackjack, and baccarat.
Virtual reality gaming has been around since the 1990s when Nintendo launched its “Virtual Boy” console. However, this device was ahead of its time and not able to provide an enjoyable experience for gamers. In recent years, developments in computer technology have allowed virtual reality gaming to become a more realistic prospect, and we have seen the major games console manufacturers as well as companies like Facebook invest heavily in the technology. iGaming companies have also joined in, using virtual reality to augment their live casino experiences. These services are still young, so it is too early to tell if they will be as successful as mobile technology in driving growth in the industry.
Overall, the future looks rosy for the iGaming industry. There is a lot of potential for growth as more people are taking up these services. The largest part of this growth has come from sports betting, an increase in female participation and mobile services. Other innovations, such as live casinos and virtual reality may not lead to the same big increases in turnover, but will help to differentiate the product ranges and provide a more realistic experience for the most die hard fans.