Charles Ingel - Thursday, 28 October 2021 - FeaturesOver the last decade, the iGaming industry has seen a massive boom with rising users and profits almost every year. Despite its ubiquity in the marketplace, however, many people may not be familiar with the ins and outs of this growing market. So, let’s take a look at how iGaming got to be where it is and where it might go from here.
iGaming is the term for “Internet Gambling”, a term that was coined in the early 2000s when online gambling began its meteoric rise. At that time, regional jurisdictions all around the world began more specifically defining the parameters of this growing industry in order to better understand how they could operate within or outside the law.
Internet Gambling (or Online Gambling) is defined as “an online game in which payment is required, monetary prizes may be awarded, and the outcome of the game is predominantly determined by chance.” This definition includes online casinos and social casino games.
While “iGaming” (Gambling) and Gaming (not Gambling) are two very different industries, it’s important to keep in mind what iGaming refers to.
The following are examples of iGaming — provided they take place online:
iGaming (or eGaming, as it is sometimes called) differs from traditional gambling or casino games in that it is entirely digitally-based and tech-dependent. These games are always played on a computer or mobile device.
iGaming is still a relatively young industry, having only begun in the mid-90s. The proliferation of home computers and the growth of internet usage ultimately made this growth possible. Before we get into the nitty-gritty of the history of iGaming, let’s look at what made this industry possible.
When Microsoft launched Windows ‘95, America Online (AOL) was rolling out aggressively in the US and UK. The increase in access to computers as well as the internet enabled many more players to place bets at online casinos as they began popping up online.
It’s no secret that offshore gambling licenses have helped to push the growth of iGaming. When the Internet was still the Wild West, gambling on the periphery was still the norm. Only in recent years have the USA and Europe started to relax their gambling laws and allow for regional regulation in-country. Prior to this, less regulated nations started the trend.
In 1994, Antigua and Barbuda began granting internet gambling licenses within their borders, boosting the number of licensed iGaming establishments worldwide.
The advancement of personal technology, such as smartphones, high-speed internet, and mobile apps, has helped to push the growth of the iGaming industry worldwide. However, with an industry so reliant on technology, the same factor that enabled growth can present its own set of challenges.
Yet, despite astronomical growth in a relatively short period, the iGaming industry has had to face some challenges throughout the years.
The three most significant issues to impact the iGaming industry in the past (that have also continued into the present) are the following:
Covid-19 affected all industries across the world, and the gaming industry was no exception. As worldwide social distancing orders went into effect and brick and mortar businesses were forced to close, iGaming took a slight hit, and immediately bounced back with a vengeance.
The major casinos and even the Las Vegas Strip was hit hard, but online gaming skyrocketed to new heights seeing unprecedented growth. Players wanted to play, they wanted an escape from the awful realities of a post-Covid world, and online gambling was the answer for many.
Although brick and mortar casinos saw fewer players walk through their doors, those that had the infrastructure already built for iGaming flourished and saw increased profits during Covid times.
According to Research & Markets, the global online gambling market is expected to grow from $64.13 billion in 2020 to $72.02 billion in 2021 at a compound annual growth rate (CAGR) of 12.3%.
No market can ever grow forever, but the continued rise in the numbers show that iGaming is still on the upswing. It will eventually plateau or crash, but unless all of the major gaming laws worldwide change, chances are the iGaming industry will be growing for a long while to come.
iGaming companies usually fall under the umbrella of holding companies or conglomerates. These groups control or own a major portion of the industry. Many new players have jumped into the game, but these few have been there from the beginning and will likely be around for quite some time.
Since the popularity of iGaming exploded these three regions have become powerhouses in the industry. There are many countries now who see the benefits and revenue of legalized iGaming, but these three were some of the first or offered the most lucrative tax breaks and laws allowing them to become one of the most sought after regions for opening online casinos.
The UK’s recent departure from the European Union has shed some uncertainty on the future of the industry in Europe. The EU is by far the largest online gambling market in the world with revenues around €26.3 billion in 2020 and projections of €37.3 billion by 2025.
While the future of iGaming looks rosy with the industry’s market expected to reach $112.09 billion in 2025 at a CAGR of 12%, there are some challenges in the offing that iGaming providers will still have to face.
Gambling Legislation: The threat of changing legislation around the world is perpetually hanging over the iGaming industry like a black cloud. Despite the year-on-year growth and ample opportunities this sector provides, online gambling is still not legal in that many countries globally.
Millennials: Beyond the obvious technology challenges and ever-changing graphics, sound, platforms, etc. the iGaming industry has to consider the Millennial population.
Millennials are not as interested in casino games as their parents’ generation are and have clearly opted for hardcore battle royale games like Grand Theft Auto, PUBG, and Fortnite. Getting them into the game is certainly going to be a challenge going forward.
Cryptocurrency: Among others, the growth of cryptocurrency as a popular payment method presents ongling technological challenges for software developers and payment gateways/processing.
Market Saturation: The problem with a successful, growing, and lucrative industry is that everyone wants to get in on the action. This means the iGaming market has an enormous amount of competition. With new startups launching new apps and websites all the time, the competition is fierce — leading to more choices and bonuses for players but more marketing spend for online casino operators.
Artificial Intelligence (AI) and Virtual Reality (VR) are expected to become mainstream in the world of iGaming. These technologies are able to create extremely immersive experiences that will only get more realistic over time.
With record profits each year, technological advances, and an increasingly connected online world, the iGaming industry has a bright future ahead indeed.
Charles Ingel is our resident casino and bonus review expert. He makes sure that every bonus on our site is active and tests for fairness. Charles sees to it that we have the best no deposit promos of any online bonus site.
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