What is online gambling?
Internet gambling or online gambling simply refers to any kind of gambling that takes place over the internet. This refers to online casinos, poker, betting (which is mainly soccer and other sports) and then other products which take in online bingo, lotteries, casual or social gaming and more.
An online casino is designed to hold all the same games as a traditional land based casino but with a few differences. You can play in a casino online with your smartphone anywhere and at any time. It will still have poker tables, blackjack, slots and roulette wheels but you don’t have to travel to play any of those games. Live dealer casinos are now making the internet market closer to the real thing with real dealers who interact with you during the game.
Bingo has often been seen as popular with the more elderly generation who may sometimes find it hard to travel to local halls. Indeed these halls seem to be closing at a regular rate so perhaps there is no local hall. No problem, start your tablet and login to your favourite bingo provider.
It is obvious that there are advantages to gambling online from home as opposed to travelling to a betting shop or casino so how does it compare to traditional gambling?
Can anyone gamble online?
Obviously age restrictions still exist online and anyone wishing to play will have to provide proof of age before they can ever see any winnings. Usually a photo ID with date of birth such as a driving licence or passport plus a recent utility bill with name and address will suffice. This is not the only restriction though. Some states in the US and some countries around the world have banned online gambling in either some capacity or totally.
Offshore gambling websites
China for instance does not allow any online gambling and neither does Texas if the servers are physically located in Texas. This is a technicality the online casino and gambling industry use. Many online casinos run their businesses from tax havens or places where regulations are looser and more financially appealing. Gibralter for instance will provide an online gambling licence for £2,000 a year and gaming tax of only 1% capped at £425,000.
So if a gaming company set up in Texas with their servers based there they would be shut down. However if they based themselves in Gibraltar then there is no reason why they couldn’t target potential gamers in Texas. Someone in Texas can login to the offshore site and gamble except the user themselves would still be breaking the law.
So what is the revenue for online gambling?
The global gaming industry was worth just under $500 billion in 2019 according to available online statistics. Of this $60 billion was generated by online casinos and other online betting. The gambling industry has grown almost year on year but online gambling is growing at a much faster rate.
Predictions for the online gambling market are that 2020 will see revenue rise to £67 billion. However this does not take into account the surge in popularity during the pandemic when many people were unable to travel and traditional casinos were closed down. Over the next seven years the market is expected to grow to over $127 billion which is a CAGR (compound annual growth rate) of 11.5%.
Covid-19 and gambling
2020 saw a global pandemic that affected and is still affecting businesses everywhere. The gambling industry was no exception and being listed as non essential businesses they had to close their doors. Betting shops, casinos and bingo halls closed down. Many smaller businesses will not be opening their doors again as finances and revenues were destroyed. The online nettikasino industry saw a surge in interest though. In the UK it was reported that there was an all time high for online casino searches on the internet.
Although the online market is predicted to continue growing it will be interesting to see how Covid-19 continues to affect the industry as more and more people face unemployment and finances become tighter online casinos may have to fight harder to retain users and entice new ones to join.
Where are the biggest users of online gambling?
More than 80 countries have now legalised online gambling. In the US it is left to individual states to define local gambling laws and as such many states still do not allow online gambling. There are currently 15 states that allow some form of online gambling with New Jersey being the biggest market currently at over $225 million a year.
In traditional gambling i.e. in a brick and mortar building or at a racetrack then the US and China lead the way with the biggest market share but in the online world it is very different.
Europe is the biggest online gambling market currently at around $22 billion in 2019. New legislation making online gambling legal in many countries helped increase revenue in this market. Italy, France, Spain and Germany all legalised online gambling and brought a huge group of new players with them. Asia and the Middle East are next then it is North America. It will be interesting to see over the next few years as more places legalise online gambling how the market share changes.
What problems does the online casino industry face?
Covid-19 provided a boost to the online industry but it could also end up causing a slow down in the predicted growth as more people lose their jobs and find they have less disposable income for gambling. Legislation is always changing and although new markets will open some legislation is making things stricter. For instance the UK banned credit card use for online gambling. This has resulted in PayPal payments and other e-wallets being unusable on UK sites. Mostly though the future looks rosy for the online industry and the next few years should see continued growth.