Gambling is one of the most profitable and fast-evolving industries. The global COVID-19 pandemic outbreak and digitalization of all sectors of the economy led to a surge in online gambling activity across the globe. Currently, the iGaming sector creates numerous growth opportunities for all kinds of businesses.
Every year, new gambling trends emerge in the gambling market. Whether you are an operator, a software developer, an investor, or another stakeholder, it is crucial to grasp these trends and capitalize on them as soon as possible. This GBC Time article assesses the main tendencies that can change the course of your gambling business in 2024. Keep reading to know what are the top-eight trends in the gambling market.
Online will dominate the gambling industry
While the outbreak of the coronavirus in 2020 and 2021 and related restrictions negatively affected the land-based side of gambling, it also led to the boom in the iGaming sector. As the Online Gambling market study by ReportLinker indicates, players all around the globe switched to online platforms to cope with financial, social, and psychological crises. The other growth drivers for the online gambling market in 2022 include:
- Popularization of online payments;
- Increased demand for online games of chance due to the pandemic-related restrictions of brick-and-mortar gambling venues and live sports events;
- Boosted demand for mobile gambling due to the swift adoption of mobile phones;
- Rise in number of female casino players;
- Operators diversify gaming and betting options, implementing new bonus programs and tournaments.
The research by iGB and H2 Gaming Capital predicts that the global online gambling gross win will reach $82.86 billion in 2022. And by 2025, it is expected to rise to $104.8 billion. Fortune Business Insights report shows that by 2028 the market will reach $158.2 billion, with a compound annual growth rate (CAGR) of 11.4%.
At the same time, the increasing crime rate in the online casino sector, prejudice towards online gambling activities, and tightening of iGaming regulations across multiple jurisdictions may constrain the market growth in the forecasted period. As the land-based gambling venues begin to reopen, the share of iGaming in global gross gambling win also begins to decrease from its peak level in 2020. The size of the online market, however, will continue to increase. The analysts from H2 Gambling Capital predict that in 2022, the iGaming sector will generate 17.5% (or $82.86 billion) of global GGR, compared to 20.5% (or $68.98 billion) in 2020.
The expansion of the iGaming industry creates numerous employment and development opportunities for the sector. The convenience and accessibility of online gambling also help attract new audiences.
At the same time, the main challenges caused by extreme online gambling market growth are:
- high impact on the mental health of online casino players;
- possible bans of online gambling ops.
The concern about problem gambling in the online sphere is especially deep. International Gambling Report 2021 by YouGov suggests that three in five consumers believe that gambling operators do not take this issue seriously.
The legalization of gambling activities is set to continue
In 2021, numerous countries legislated gambling activities, and this trend is set to continue in 2022 as well. The International Gambling Report 2021 by YouGov indicates that 77% of respondents globally do not disagree that gambling should be legalized, and only 28% believe that current regulations are too strict.
The growth of legal gambling in Europe was driven by the launch of the iGaming market in the Netherlands in October 2021. On July 1, 2021, Germany also legally allowed online gambling. Ukraine began issuing online gambling licenses in early 2021, following the legalization of gambling activities in August 2020.
The US market also saw a surge in the legalization of betting, especially online sports wagering. Although remote sportsbooks were legislated in 2018, 2021 became the year when American states began regulating online gambling en masse. Throughout 2021, six states allowed gambling for the first time, and eleven introduced some new form of a game of chance. And on January 2022, New York became the biggest US territory to launch online wagering. The draft regulation for online gambling in Brazil is also soon to be released. So, the global regulation of gambling, especially in the digital sector, will be one of the main trends for 2022.
A study by the iGB and H2 Gaming Capital shows that in 2019, 65.7% of global gross iGaming win was generated in the regulated white markets. And by the end of 2022, this rate is expected to reach 70.7%. In three years, by 2025, 75% of all gambling revenue is going to be from the legal markets.
Additionally, many leading gambling companies like Kindred have identified increasing the channelization rate as their main objective. Channelization is the degree to which players of a certain region/provider gamble with legal operators. The studies show that countries in Europe have the highest channelization rate. According to H2 Gaming Capital and European Gambling and Betting Association (EGBA), in 2021, more than four-fifths (82.7%) of all online gambling activities took place on legal platforms. In 2022, the European channelization rate is projected to reach 85.5%.
Mass legalization of games of chance in 2022 has many advantages for the gambling industry, including:
- An opportunity for major gambling market players to enter more markets and reach new audiences and, subsequently, to grow revenues;
- Increased player protection and safer gambling initiatives.
At the same time, tight regulations can constrain market growth and lead to players going to the black market instead. The gambling market of Sweden can be a perfect example of this. According to the Head of the Swedish Industry Association for Online Games (BOS) Gustaf Hoffstedt, strict deposit limits on online casino platforms imposed as a part of the COVID-19 restriction led to players creating more accounts and developing risky behavior.
A rise in mobile gambling
iGaming experts have been discussing the shift to mobile gambling for some time. Ever since the start of the COVID-19 pandemic, many players have started gambling on mobile devices (phones and tablets). Mobile betting becomes the main revenue driver for most gambling ops.
According to EGBA and H2 Gaming Capital research, in 2021, more than half (50.5%) of all bets in Europe were placed from mobile devices. This year, the share of desktop bets is only going to lower.
The gambling consultancy MECN in its forecast winter 2021 – 2022, shows that mobile betting has the highest growth potential in the next 12 months. In Q4 2021, 76% of total online gambling revenue in Western Europe came from the mobile channel.
The development of mobile gambling has many advantages, including:
- Ability to utilize the latest technology and improve gamification;
- Opportunity to reach a major group of mobile users;
- Players prefer mobile devices because of high accessibility and convenience;
- Gamblers spend more when playing on mobile devices. The Optimove author Yohai Sabag found out that mobile players turn into paying customers almost twice as fast as desktop players (30 days vs. 50 days).
At the same time, gambling on mobile devices has serious downsides, like:
- As gambling ops launch their mobile applications, the market becomes highly competitive;
- Older casino games are harder to convert to mobile;
- The quality of graphics of mobile casino apps is usually not as good as on desktop versions. Some games are also difficult to adjust to a small screen;
- Higher chances of developing gambling addiction for the players.
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A surge in sports betting
The analysts from EGBA, H2 Gaming Capital, and YouGov confirm that betting will continue to dominate the gambling industry in 2022. According to ReportLinker, sports wagering will be the fasted growing market segment in the next five years (2022 – 2027) at a CAGR of 6.9%.
According to the Global Gambling Report 2021 by You Gov, sports betting is one of the most popular online products among gamblers, closely followed by lottery draws. Data provided by the research center shows that in the following countries, sports betting is the number one iGaming activity:
- Italy;
- Australia;
- Spain;
- Mexico;
- Sweden;
- The US.
The chart below gives further insight into the online gambling products popularity across the globe.
After the US Supreme Court legalized sports betting in the country in 2018, many large online gambling operators have begun to add wagering on sports events to their game rosters. These movements in the US market create an opportunity for the growth of the wagering market in the region.
The other tendency for 2022 is a prominent share of football betting in the global gambling market. It was evident in 2021, with FIFA World Cup and EURO 2020 events boosting the interest in wagering on football. Moreover, sportsbook operators sponsor football clubs, like AC Milan and Real Madrid, as a part of their marketing strategy.
Without any doubt, the growing sportsbook market has many positive sides. The main benefit is the opportunity to increase the profits. After its legalization on January 8, 2022, the New York sports betting market attracted nearly $2 billion in bets.
At the same time, one of the most serious downsides is high exposure to gambling harm among bettors. The National Council on Problem Gaming states that sports bettors are more likely to develop an addiction than other gamblers.
Cryptocurrency boom
In November 2021, the biggest digital currency – Bitcoin – has reached its peak value of $68k. According to Time magazine, the global cryptocurrency market has grown to a $2.3 trillion cap, with Bitcoin alone accounting for $1 trillion. So, it is no surprise that blockchain technology is conquering the gambling industry as well.
Many online casinos, sportsbooks, and lottery operators utilize Bitcoin, Ethereum, Dogecoin, and other cryptos as a payment option. Some digital currencies like CasinoCoin were created specifically for gambling.
The experts state that consumers are actively embracing crypto products in the gambling industry. According to the report by game aggregator SoftSwiss, in 2020, the crypto gambling traffic was three times higher compared to the previous year. The data also shows that 4% of all online gambling is crypto-based.
As Sally M. Gainsbury and Alex Blaszczynski stated in the study How Blockchain and Cryptocurrency Technology Could Revolutionize Online Gambling, although blockchain technology cannot be widely adopted at the current state of events, it has a great potential for transforming the online gambling industry. The experts have outlined the following pros to crypto transactions and blockchain-based games of chance, including:
- Secure transactions that occur almost instantly;
- Crypto payments are transparent without a possibility of interference;
- No risks of fraud and payment evasion as all transactions are irreversible;
- Low or none deposit and withdrawal fees, which allows gambling operators to lower house edge;
- Anonymity for players, which allows circumventing gambling restrictions in countries where games of chance are banned;
- Players don’t have to create an account to gamble, which eliminates the need to manage and protect users’ funds and accounts;
- Games that run on the blockchain are fair and open to verification, as the outcomes are determined without the interference of a third party;
- Blockchain technology allows verifying the player’s identity via their digital wallet. Unique identifier codes linked to the wallets help prevent money laundering and other illegal behavior.
At the same time, experts believe cryptocurrencies bear some risks for the gambling industry, such as:
- High volatility of the crypto assets;
- The absence of a regulatory framework for the cryptocurrency sector in many regions (especially Asia) leads to a higher risk of players exploitation;
- Difficulties in regulating crypto transactions, as the payments are not connected to any banking institution;
- Gambling sites that use blockchain are resistant to censorship, which may make it harder to impose restrictions on them;
- Player anonymity increases the risks of fraud and money laundering. It also complicates the implementation of responsible gaming initiatives, like self-exclusion. However, reliable crypto wallets require identification for anti-money laundering and know-your-customer purposes.
Nonetheless, cryptocurrency is a large market that is likely to influence the gambling industry in 2022.
The impact of VR and AR on the gambling industry will increase
On October 28, 2021, the founder of Facebook, Mark Zuckerberg, announced the rebranding of the service. Zuckerberg also stated that Facebook would become Meta and create a metaverse space. This news caused a surge of interest in the metaverses and boosted sales and investments in the virtual reality sector.
According to the study published by the research expert Thomas Alsop, by the end of 2022, the global VR market value will reach $6.71 billion. Following a $1.1 billion revenue drop in 2020, the virtual reality market is now back on track. Spiked by the metaverse popularity, the global VR revenue is expected to rise above $12 billion by 2024.
The VR sector has been influencing the development of the casino industry for some time now. In a 2017 publication, Sally M. Gainsbury and Alex Blaszczynski noted that gamblers across the globe are rapidly adopting innovative products, like virtual reality gaming, esports betting, social media games, and skin gambling. The experts, however, warn that the mass embrace of immersive and interactive VR games of chance could result in the blurring of barriers between gambling, gaming, and social media. Thus, posing a higher risk of gambling addiction among gamers.
Currently, very few gambling operators, such as PokerStars, provide VR casino options. The poker website offers such features as:
- 3D avatars;
- live interactions;
- imitation of gestures.
However, the metaverse anticipation is likely to change the situation. The Global Gambling Market (2014-2022) report by the Research and Markets predicts that VR gambling will be the fastest-growing niche of the iGaming industry with a CAGR of 15.6%.
Augmented reality (AR), along with VR, will have an impact on the gambling industry. According to Roy Mendelson, the gambling consultancy specialist, in July 2021, the first AR casino opened for business. The iGaming platform offers AR-incorporated slots, roulette, blackjack, and other games of chance. AR technology is also often used in live dealer games to recreate the atmosphere of a brick-and-mortar casino. One of the biggest perks of AR gambling is its accessibility. AR casino games do not require any additional software or hardware, like VR headsets or goggles.
The implementation of VR and AR in the gambling sphere has many benefits, including:
- Enhanced user experience;
- Experience close to real life;
- Social element.
Nonetheless, there are some factors constraining the growth of the VR trend in gambling:
- As VR headsets cost $450 – $750 on average, not all players can afford it;
- High cost for implementation of VR and AR technologies on the gambling platforms;
- No consistent regulations;
- High risk of problem gambling due to immersive nature of VR games.
Trend on esports betting will continue in emerging markets
The lack of traditional sports events during the global coronavirus pandemic has boosted interest in non-traditional sports, like daily fantasy sports (DFS) and cybersports. Major esports tournaments like the International, League of Legends World Championship, and Free Fire World Series attract hundreds of thousands and even millions of viewers from all across the globe. According to the research expert, Christina Gough, and data published on Statista, in 2021, the global esports market value almost doubled from 2020, reaching $1.08 billion. Gough expects that by 2024, it will reach $1.62 billion, with Asia and North America being the most profitable esports markets.
It all leads to the high popularity of betting on non-traditional sports. Large sportsbooks, including Willian Hill, bet365, and Pinnacle, are already adding esports products to their roster. The rise in esports betting can also be attributed to the high-quality customer experience on the esports wagering portals.
The 2021 YouGov study on the global gambling attitudes shows that interest in betting on fantasy sports and esports tends to be much higher in emerging markets. 39% of surveyed Brazilians stated that they would be on fantasy sports if it was easy. Top-5 markers with the highest interest in betting on esports and DFS include:
- South African Republic;
- Brazil;
- India;
- Mexico;
- Argentina.
Embracing the trend for wagering on esports and DFS could bring major growth opportunities for the global gambling market, including:
- Guaranteed data integrity for bookmakers, as the results of the game, are recorded automatically and without any interference of a third party;
- Betting operators can offer an advanced variety of in-play bets, as they have access to all the data related to the game;
- High accuracy of the betting odds in real-time, which is possible due to the machine learning algorithms;
- Ops can provide an enhanced data-driven customer experience. For example, widgets, prediction trackers, comparison graphs, and other visualizations can help players keep track of the game.
There are, however, some risks attached to the esports and DFS wagering sectors:
- Esports and fantasy sports are still in the gray legal area in many countries, which may pose a regulatory risk;
- The complexity of the game rules and wide selection of games drive some bettors away;
- Some players are suspicious about the integrity of video game competitions and are reluctant to place their bets. However, this attitude towards cybersports may change with a deeper understanding of technology.
Online gambling on wearable devices
Smartwatches and other wearables are gaining popularity across multiple industries. Modern technology made it possible to exchange messages, make calls, and even play games of chance from a smartwatch. Once used for fitness and tracking purposes only, now wearable devices can be used for gaming, calls, and messaging. The Global Smart Watch Industry report by ReportLinker predicts that the market will grow from $56.1 million in 2020 to $169.8 in 2027 at 17.1 % CAGR.
Major gambling ops have already seized the opportunity to bring the online casino experience to a new level and begun to offer smartwatch gambling apps. Large gambling operators are starting to expand their mobile offers to wearable devices. For instance, software development studio Playtech has recently developed slot gaming apps for Apple Watch.
This rising wearable trend has several benefits from the gambling industry:
- Enhanced user experience and high accessibility for gamblers;
- The design of the gambling apps on wearable devices allows for a more appealing and focused gaming process.
At the same time, the development of this trend can be constrained by the following factors:
- Gambling on wearable devices remains a niche product with a narrow audience. Most of the online casino players will go to gambling websites or use mobile apps;
- Gambling software developers may be challenged by the wide selection of operating systems for smartwatches alone, excluding watchOS and WearOS.
Gambling market in 2022: financial prospects
As seen from the multiple reports, in 2022, the global gambling industry is expected to develop financially and grow in terms of revenues. The Global Gambling Industry Analysis by ReportLinker estimates that by 2027 the industry will be worth $911.9 billion with a CAGR of 3.6% (2020 – 2027). Sports betting and lottery remain the most profitable gambling products with a CAGR of 4.4% and 2.8%. The share of online games of chance in total gross gambling win will also gradually grow. As seen from the H2 Gambling Capital data, the online share sector in the global market will gradually increase over the next four years.
The ReportLinker’s Online Gambling Market forecast for 2022 – 2026 indicates that the market will be dominated by major gambling companies. The study highlights that the following companies will have the most impact on the industry:
- bet365;
- Entain;
- Flutter;
- Betsson;
- Kindred.
Key development strategies for these operators will include:
- Mergers and acquisitions;
- Partnerships;
- Product innovations.
In 2021, several major casino stock deals took place, including Caesars Entertainment purchasing William Hill US for $3.04 billion in April. The acquisitors that are likely to be finalized in 2022 can be seen in the table below.
| Buyer company | Acquired company | Price of the deal | Finalization time |
| Flutter | Sisal | $2.2 billion | Q2 2022 |
| 888 Group | William Hill the US | $2.2 billion | Q1 2022 |
| Blackstone Group | Crown Resorts | $6.3 billion | Q1 2022 |
According to ReportLinker, in 2022, the competition in the iGaming market is going to be even fiercer than in previous years. Quality of offers, content, UX, brand identity, and other factors will be a focus.
Conclusion
As seen from the analytics from ReportLinker, EGBA, iGB, and H2 Gambling Capital, the gambling industry and especially the online sphere will continue to grow in 2022. The latest developments, including virtual reality and blockchain technology, are likely to influence the market. Additionally, non-traditional sports, like daily fantasy sports and esports, will secure a place in the market as well.
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