Business Insider: The Online Gambling Industry

For centuries, people have been playing games of chance or placing bets on the results of different games. Today people continue to gamble in casinos, card rooms, and more often – online. As the internet’s answer to gambling, online casinos allow players to access their favorite casino games from anywhere with internet access using their computer or mobile devices. Despite opposing regulations, the global online gaming industry has shown rapid expansion over the past decade, and economists expect the trend to continue.

global online gambling

Online gaming has grown due to a number of factors such as internet penetration, the opening of new markets, and new players signing up. Since 2005, the online gambling market has increased by 2.5 times and is predicted to generate an estimated $40 billion USD worldwide in 2014. Throughout its development a host of market players have emerged including online casino operators and software vendors.  Each strive to stay ahead of the competition by offering unique product packages, a great variety of games, new features, and regular system updates. The chart below features direct access to some of the leading online gambling and betting companies such as William Hill, Bwin.Party, Bet365, EUCasino, Betfair Group, PlayMillion, and 888 Holdings.

Mobile Gambling

The widespread use of smart phones and other wireless devices in recent years has revolutionized the online gaming industry with demands for mobile casinos on the rise. Players opt for a mobile casino because it provides a convenient way to place bets from anywhere with internet access using their devices such as Androids, iPhones, or iPads. In turn, more online gambling operators deliver mobile software solutions to their customers. Statistics indicate that mobile gaming will generate $100 billion USD by 2017 and will exceed that of regular desktop users in less than five years.

mobile casino

Source: Morgan Stanley via Viaden Software

The Players

The gambling market demographic continues to become more and more diverse, and the typical gambler no longer fits into the traditional image of a middle aged man. More women play online casinos than ever making up 40% of the market. The age range of online gamblers has also increased as internet penetration in society continues to grow, and currently 30% of online gamblers exceed the age of 50.

Lottery, skill games, bingo, casino games, poker, and sports betting comprise the online gambling shares. However, game preferences vary depending on gender. According to studies, women tend to play bingo games, although they also show increasingly more interest in other types of online gambling. Gambling behavior differs between genders as well. Women usually play for longer at lower stakes, while men play more frequently at higher stakes with shorter sessions. Generally, men play for excitement while women play for relaxation.

The Global Online Casino Industry

With the increasing popularity of online casinos, more countries around the world have permitted regulated online gambling. Gambling sites pour millions of dollars in the economy, create jobs, and generate tax revenue. As the industry spreads, each country adopts its own measures to adapt to the emerging market.

Europe leads the way in the regulated online gambling industry. The United Kingdom has become an industry leader with a £2 billion market that continues to grow. Many gamblers in the UK turn to offshore betting sites in places like Gibraltar. To counteract the loss of taxes from offshore gambling, the UK has enacted a law to tax online gambling based on the player’s residence, effective December 2014.

In Denmark, the Parliament passed a law in 2010 allowing regulated and licensed online casino operators under the control of the Danish Gaming Authority (Spillemyndigheden.dk). Although the Netherlands does not currently permit online gambling, the Dutch market will open up its first regulated online casino in 2015. After many law changes and Schleswig Holstein's pullout from the market, the legal situation in Germany concerning online gambling has become very tricky. However, generally speaking, the German market leans toward legalization.

Although France has permitted certain types of gambling such as poker, sports betting, and horse racing since 2010, the law still has grey area concerning other types of online gambling.  Meanwhile, Belgium only permits gambling sites licensed by the government gaming commission.

The Italian government strictly regulates online gambling and requires a license for each site. In Italy, the gambling generates €100 billion Euros annually from bets, and an estimated 15% comes from online gaming. Popular operators include Lottomatica, Bwin/Party, Snai, Paddy Power, Sisal, and William Hill.

Meanwhile, Spain has regulated online gambling since June 5, 2012, allowing gamblers to safely play online casino games, poker, bingo, and lottery on websites owned by licensed operators, generating billions of Euros. Although land based casinos became legal in Portugal in 1927, online casinos are still in the process of regulation. Online betting and casino games have operated in Greece for the past 10 years, though a law passed by the EU in 2011 required many gambling sites to pay a large fine for non-compliance with new restrictions.

european regulations

Europe continues to lessen restrictions on the online gambling market.

In North America, online gambling became legal in three US states by early 2014, with revenue rising to the millions within the first months of operation. New Jersey, Delaware, and Nevada have allowed online gambling, with more states expected to follow. In Canada, government operated online gambling such as lottery tickets make millions each year.

In Latin America, Brazil represents the largest market, but only allows online bets on horse racing. Still, offshore gambling websites have become popular among Brazilian gamblers, who bet hundreds of millions annually on offshore sports betting sites. Offshore betting will likely increase, when Brazil hosts the World Cup in 2014. Mexico and Argentina both allow online gambling under special licenses. Offshore sites have also become popular in Mexico, and Argentina has the largest number of registered online gambling sites in Latin America.

In Russia, the online gambling market remains strictly regulated for casinos and online bookmakers. Nevertheless, online casinos, especially poker rooms, are becoming increasingly more popular in Russia as well as the mobile versions of casinos. Despite the fact that the Polish government prohibits online gambling, online casinos and sports betting have become popular in Poland. Yearly income from illegal online gambling generates an estimated $2 billion USD.

Online gambling and betting has also become popular in Australia with the online gaming market growing by 30% annually. Gambling online recently started to emerge in Africa. The first regulated online gambling website launched in Kenya in 2013. South Africa currently allows online sports betting and horse racing, but awaits legislation for online casinos in 2014.

Currently, most parts of Asia restrict gambling of all kinds, although some underground sites exist illegally. However, certain areas of Asia such as Macau and Singapore have shown record revenue numbers since allowing land based casinos. With video games already massively popular, should Asia open its borders to legalized online gambling, revenue numbers would surely surpass all markets.

The Bottom Line

Despite the ongoing regulatory backdrop, one thing remains clear – the global online gambling industry is here to stay. In the upcoming years, online gambling revenue will likely generate over hundreds of billions of dollars, with mobile gaming to dominate over desktop casinos. As more countries allow regulated online gambling, the market will only continue to grow.

About The Author

I made my entrance to online gambling in 2004 in an attempt to understand the psyche of the casino goer. I've spent prolonged periods delving into the industry and its inner functions and continue to do so at VegasMaster every day. My research and experience has given me insights into gambling that I hope you'll benefit from.

3 Comments

  1. Ripper77

    It’s insane how much the gambling industry makes! But it’s cool to see how the online gambling industry functions in different parts of the world.

  2. CHARLIE_S

    These are some interesting facts. It wouldn’t shock me if in the future most online gambling occurs on mobile devices.

  3. TOMMY GUN

    I bet that in the years to come the gambling industry is going to make most of its money from mobile.

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