Publication date: 15 Mar 2023
By 2027, the size of the online gambling market will increase by $150.5 billion, an increase of 11.03% (from 2022). The sector’s growth is dependent on several factors including the rising demand for mobile gambling, the surge in eSports betting and the reduced rigidity of government regulation. A new report from consultancy TechNavio details the outlook for the gambling industry by device, product, geography and other parameters.
Online gambling market trends and challenges by 2027
Growing demand for mobile gambling is significantly driving the market growth. Smartphone penetration is increasing due to lower average price (ASP) and development of mobile infrastructure.
- Smartphones are becoming a major platform for online gambling as they provide easy access to casino games and eSports betting. The user-friendly and intuitive interface of slots and sports betting makes it possible to increase the active usage time of smartphones.
- Smartphones also support many mobile payment solutions such as M-Pesa, Orange Money and Airtel Money. Due to improvements in mobile payment systems, vendors are launching more and more gambling apps.
At the same time, experts point out that the desktop segment will show the greatest growth by 2027. The reason for this is that desktops provide a better experience due to their larger screens as compared to mobile devices.
Another significant new market trend is the emergence of VR (Virtual Reality) as a cure for gaming addiction. The use of virtual reality allows people to immerse themselves in a safe and secure virtual environment, avoiding negative real-life scenarios. Likewise, virtual reality helps therapists learn more about the problem in order to help people with gambling addiction. Thus, the use of VR makes gambling safer, which in turn will boost the market growth.
A key factor driving the growth of the global gambling market is the increase in eSports betting. It is expected that by 2027, many gambling industry providers will switch their focus to eSports games and develop new services to attract users. Furthermore, the liberalization of regulations concerning online sports will give an extra impetus to the industry.
However, rising data security issues on the Internet are a major problem hindering the market’s growth. Most gambling websites now lack a proper dispute resolution system and provide no transparency in the cash prize payout. Likewise, there are no standards for fair and responsible casino gaming, which reduces trust in gambling operators and platform providers. This trust problem has a negative impact on the scaling of casino business as well as discourages new users from taking part in gambling.
In addition, since 2022, online gambling websites have become a prime target for cyber-attacks and fraudsters. Gambling platforms collect sensitive and most vulnerable to hacking information about users: bank details and credit card numbers. Some offshore online casinos lack the latest cyber security technology, which increases the likelihood of cyber-attacks.
Top regions for online gambling market development by 2027
Technavio analysts have explained in detail the regional trends and driving forces that will shape the market from 2023 to 2027.
The main region for the online gambling market development will be North America. North America is projected to account for 37% of the global market by 2027. The segment will continue to expand at a rapid pace due to the increase in the number of mobile app install platforms.
USA is the key country in the region. The COVID-19 outbreak had a strong negative impact on the market, with the gambling industry being severely disrupted in 2020. Nevertheless, this led to technological improvements in the online sector and encouraged changes in legislation (legalization of online gambling in various US states). Eventually, the quarantine and closure of land-based casinos has led to an increase in demand for online establishments. More states in the country are expected to introduce regulations while the demand for online gambling is on the rise.
Additionally, the growth of the gambling market in North America is being facilitated by the development of new gambling services. For instance, Lotto.com Inc. (New Jersey) and BetAmerica (Pennsylvania) have launched digital platforms allowing the purchase of lottery tickets or sports betting from any device without using an app or making a deposit in advance.
Major vendors of the online gambling market
By 2027, vendors will implement various strategies to strengthen their market position: alliances, partnerships, mergers and acquisitions, geographic expansion and product as well as service launches.
The main online gambling providers to lead the market will be Betsson AB, 888 Holdings Plc, Bet365 Group Ltd., BetOnline, Camelot UK Lotteries Ltd., Entain Plc, Flutter Entertainment Plc, Fortuna Entertainment Group AS, Galaxy Entertainment Group Ltd., INTRALOT SA, Kindred Group Plc, LeoVegas AB, MGM Resorts International, New York State Gaming Commission, Scientific Games LLC, Sportech Plc.
After reviewing the available data, TechNavio experts have concluded that the online gambling market will grow steadily until 2027. The presence of positive trends clearly prevails over the challenges, which will turn gambling into a profitable business segment.
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