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Recent years have been pretty good for gambling operators. A constantly increasing number of software providers confirm this conclusion. However, this is history, and we are primarily interested in the future.
- What business climate will accompany the gambling business soon?
- What impact will new trends in politics have on it?
- Who will succeed the most in the industry?
Let's find answers to these questions.
Online Gambling
In 2016, the global online gambling market grew by more than 9% since more than 85 countries worldwide legalized online gambling. Online betting and online casinos account for 70% of revenues from the online gambling market. Games of chance on the Internet are highly successful due to the wide range of games offered and the convenience of gambling without any restrictions.
The key players in the online gambling market that generate revenue are China, the United Kingdom, Australia, the United States, France, Germany, and Italy.
The global online gambling market will probably exceed 60 million dollars in 2020.
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Consolidation of the Online Gambling Market
The development of online gambling in recent years has been determined by the fact that the emergence of the online gambling market has not yet reached its maximum. However, it is very close to this maximum. This led to some takeovers and mergers of gambling companies. Some occurred for strategic reasons, while others, for example, the absorption of Bwin, took place because companies could not compete successfully with more prominent organizations. In the future, the development of technology and changes in consumer preferences will surely increase the level of competition in the market.
According to the Financial Times, William Hill struggles to find a new CEO. Last year, there were trilateral talks about the merger between Rank Group and 888, but the deal did not occur. Playtech would have lost one of its biggest customers if this had happened. Nevertheless, if the three-way merger of William Hill, Rank, and 888 failed, perhaps it would be done with Playtech! Experts predict that the merger of William Hill, 888, Playtech, or any two companies from this list is very likely in 2017.
New Technologies for the Gambling Industry
New technologies continue to have a substantial impact on markets. Mobile gambling will continue to grow and develop beyond any doubt. Regardless, this growth, associated with increased mobile data transmission speed, is possible only for new and better products. As for users, these changes should not be particularly noticeable for them. Improvements will probably occur against the background of traditional dynamics.
Virtual and augmented reality technologies can also offer some surprises. We can assume that soon, pokies and other games of chance will become as vivid and impressive as ever, thanks to the development of Microsoft HoloLens, Playstation VR, and HTC Vive.
Crypto Casinos
Last year, the U.K. Gambling Commission decided that Bitcoin could be a legitimate payment tool for online gambling in the United Kingdom. Famous operators from all over the world are also beginning to use bitcoins.
Experts believe that we will see a surge in the popularity of bitcoins on the Internet in the future. And this happens not only because it is convenient but also because using bitcoins will allow greater transparency.
After all, every financial transaction, each spin of the roulette wheel, and each roll of dice are documented in the blockchain. These data cannot be hacked, replaced, or faked, and at the same time, they are available for everyone. Any gambler can determine whether the gambling house is honest and integral. We are beginning the era of transparency, in which blockchain technology will change the world. Its importance can be compared with the spread of the Internet or smartphones, without which our lives are now difficult to imagine.
Security Problems in Online Gambling
Security issues are vital for online gambling companies because of the development of new technologies and their influence. Recently, DDoS attacks on gambling resources have become popular. Last year, online bookmakers suffered significantly from them. It turned out that even such giants as William Hill were not protected from such attacks.
In the autumn of last year, the British operator's services operated intermittently for two days. Given that WillHill earns 5.4 million dollars daily, losses from hacker attacks can be considered very serious. Therefore, gambling operators will invest heavily in security in 2017.
Growing Number of Female Gamblers
The trend of increasing the number of female gamblers was formed in 2015. Last year, it gained momentum, and in 2017, the growth is expected to continue. Studies show that females prefer to gamble privately on their electronic devices, where they can play confidently without being afraid of the mockery of male gamblers. Women under the age of 35 are much more active in gambling than women over 35.
Online casinos for females have begun to appear. The first such gambling house was Cameo Casino, with the motto "made by women for women." It was opened in 2015. Although Cameo Casino was unsuccessful and closed its doors after working for less than two years, the market was ready for such a novelty. Others immediately picked up the idea:
- 888Ladies,
- Pink Casino,
- Maria Casino, etc.
These operators use unique advertising campaigns, which are intended for females only.
Expansion of Credit and Debit Cards
The biggest problem with online gambling is differences in the legislation of various countries. Although some countries allow land-based casinos, as they contribute to tourism development, they have an extremely negative attitude towards online gambling. Examples include South Korea, Japan, Portugal, and Norway. Yet, online gambling cannot be banned entirely because users can access foreign websites via proxy and freely play games of chance using international credit or debit cards.
The governments of countries do not take serious measures to ban these websites for two reasons:
- They assume that people who participate in such activities are sufficiently educated and aware of the consequences or are financially secure so that the losses cannot cause significant damage to them from a financial point of view.
- The second reason is that a complete ban on foreign gambling resources will force advertisers to avoid placing their advertisements on national websites, leading to revenue loss.
Changes in Gamblers' Habits
One of the key trends in the gambling industry is the growth of the social and mobile gambling market. The increase in the number of users of mobile devices has accelerated the development of the online gambling and betting market. Social games that earn money on monetization in social networks are currently one of the main ways gambling is popular among players.
Now, there is a significant change in the behavior of consumers in the global online gambling market.
The increased popularity of social gambling applications is the main factor that is expected to contribute to market growth.
Gambling software developers follow the trend and invest in developing innovative social games of chance for mobile devices. The number of people participating in social gambling is growing since they are motivated to "compete with friends." Other reasons for the growth in the number of social gamers are:
- Communication and interaction with the help of games,
- User-friendly gameplay,
- Numerous tournaments.
In addition, the more frequent use of the F2P (Free to Play) model in social games will also stimulate market growth. This model does not generate revenue directly because it does not charge participation fees. Instead, the revenue is generated via the sales of virtual goods, which open access to more opportunities or provide an advantage over competitors.
Offline Gambling
Which factors affect the gambling business? The list of such factors includes:
- Politics (regulation, political climate).
- Business climate (market size, market growth, etc.).
- Trends (demand for existing and new products and technologies).
The first two factors are supposed to be especially important in 2017.
Macau Casinos
The gambling business of Macau reached the bottom and began to grow last year. A steady increase in casino revenues is predicted for Macau in 2017. However, there may be unpleasant surprises. For example, during his election campaign, Donald Trump spoke provocatively about U.S. trade with China. And even more, he angered Beijing when he received a phone call from Taiwan. The US-China relationship cannot be called friendly, so Beijing will likely want to revenge on Trump by taking action against American investments in Macau that belong to Trump's friends Sheldon Adelson and Steve Wynn.
The slowdown in China's economic growth rate is unlikely to affect outbound tourism since the country is moving to an economy based on consumption growth, unlike a resource-based and industry-based economy. The fast-growing middle class and expansion of wages in China will stimulate gambling revenues in the region and positively affect the development of casinos in nearby countries: Vietnam, Malaysia, Russia, the Philippines, and, of course, Macau.
Last year, more than 55% of Macau casino revenues were received from VIP gamblers, even though their number was only about 100,000 people compared to Macau's 30 million annual visitors. In the future, this figure should decrease since government regulations aim to combat the illegal gambling of high-rollers and diversify revenues via the development of the resort infrastructure.
Gambling in the USA
The best chance for legalizing sports betting in the United States in 2017 would have been if Donald Trump had become the president. He won the elections; now we need to wait and see.
Donald Trump has owned the legendary Taj Mahal Casino in Atlantic City for many years. His consultants' team includes several American gambling business representatives. Yet, they don't support online casinos. One of them is Sheldon Adelson, the owner of the Las Vegas Sands Corporation. His fortune is estimated at $31 billion, so he is a heavyweight gambling tycoon. He donated tens of millions of dollars to Trump's election campaign and did not support online gambling.
In addition, Steve Wynn, Phil Ruffin, and Carl Icahn are influential advisors of the president. Phil Ruffin, who owns the Treasure Island Casino in Las Vegas, is Trump's friend. Steve Wynn owns several casinos in Las Vegas and Macau.
Karl Icahn is probably the most famous American raider. He purchased numerous companies, quickly increased their cost in various ways (job slashing, mergers, etc.), and then resold them with profit.
Icahn is Trump's special advisor on regulatory issues, including gambling. One of its companies is the Tropicana Group, which owns Tropicana Casino in Atlantic City and operates Trump Taj Mahal Casino in Atlantic City. Carl Icahn is probably the essential gambling advisor. If he decides that he can make money from online gambling, Americans have an excellent chance to observe the legalization of online gambling in the near future.
It is difficult to predict the outcome of this confrontation between Donald Trump's advisors. Still, the trend toward legalizing online gambling in the United States in 2017 will be significant.
Casinos in Germany, Japan, India, and Brazil
Each of these four countries seems to be a significant regional market. All four governments are considering possibly legalizing or liberalizing their gambling legislation in 2017. Four countries have a population of 1.7 billion, which is very important for market development.
The fast-growing middle class in India, the vast number of gamblers in Brazil, and the high level of per capita income in Germany and Japan encourage the emergence of the gambling industry. Terms and conditions of licensing and taxation in the newly adopted legislations of these countries will be significant. If all four countries open their gambling markets, it will be like a new Klondike for the gambling industry.
