Five years from now, the global online gambling industry will be valued at $81.7 billion, growth that would double the current valuation of $44.2 billion.
According to a recent market research report published by Oristep Consulting, which is currently being distributed by Research and Markets Ltd., a compound annual growth rate of 10.8 percent will fuel the iGaming industry’s growth.
The 130-page report also includes vendor market share analyses for major worldwide iGaming companies including 888 Holdings, Bwin.Party, Ladbrokes, and Paddy Power.
The authors posit that accelerated growth in certain regions will serve to counter stagnant markets elsewhere:
“More than 80 nations have legalized online gambling and Europe has the largest online gambling market in the world, and this is just going to increase as Netherlands adopts new online gambling regulations.
While in the USA, three states already allow online gambling, and it is expected that more states are going to adopt similar regulations, allowing this market to grow in these regions, as the government want to benefit from the tax revenues.”
As the report mentions, America’s federal prohibition on iGaming operations – known as the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 – was essentially reversed in 2011. At that time, the Department of Justice issued a revised opinion on the Wire Act of 1961, a federal ban on sports wagers being placed via telephone which was used as the basis for the UIGEA.
In reversing the opinion, and confining the Wire Act to sports betting only, the DOJ paved the way for individual states to create their own regulated iGaming industries.
In the years since, Nevada, New Jersey, and Delaware have authorized legislation to do just that, and in New Jersey alone more than $100 in tax revenue has been generated by the iGaming industry since 2013.
Oristep Consulting’s analytical department referenced this patchwork process of legalization and regulation as a “major driver” for the iGaming industry over the next five years:
“In specific regions, there has been minimal growth of this industry due to the strict government regulations, which become a huge constraint for players to work in the market – while on the other hand, a major driver for this industry is the opening up of new markets in countries like USA and Europe where certain states are allowing legal online gambling.”
In 2016, Oristep Consulting published a similar report on the state of the global land-based gambling industry, which was valued at $35.97 billion. That report forecasted land-based gambling would reach $66.59 billion in market value by 2020.
In their most recent report, the firm framed land-based gambling supremacy as a limiting factor to iGaming growth:
“Though there is a growth in the online gambling industry, land-based gambling still dwarfs the Internet activity, which can be a constraint for this industry in the long run.”
According to analysts, another factor fueling the forecasted expansion of iGaming worldwide is the rise of cryptocurrencies such as Bitcoin and Ethereum. Many of the most successful iGaming operators have adopted cryptocurrency as their preferred method for deposits and withdrawals, as Bitcoin and its ilk avoid third-party oversight from banks.
As the report states, cryptocurrency adoption combined with the convenience of gambling from home will work to reduce the gap between iGaming and its land-based alternatives:
“Since the online gambling market allows players to use virtual money it has reduced the burden and risk of carrying cash as in the case of real gambling activities.
And since this can be done in the comfort of one’s home, many people are resorting to online gambling, hence showing that there is an opportunity for this market in the future.”
The report also touched on the potential for the American government to repeal PASPA, or the Professional and Amateur Sports Protection Act of 1992 which currently bans sports betting in all but four American states.
In the event PASPA is repealed, online sportsbooks currently operating as illicit offshore entities would be available to a significantly expanded market.