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Is Online Gambling Taking a Piece of the Pie From Gaming?

Posted by TekRevue Contributor on December 27, 2018
gaming iphone

In many respects, online gambling is still stifled in America, but the industry’s global market share is growing and many business models in adjacent industries are changing in response.

Previously here on TekRevue, we broke down online gambling revenue and talked about some predictions concerning the future of the industry.  In this article, we will go a step further and look at what kind of impact online gambling will have on the future of the gaming industry.

First, we will look at the growth of online gambling and some of the predictions powerful financiers have made.

Morgan Stanley projected that the online gambling market will reach $5.2 billion by 2020 and could reach double that if online gambling was legalized in all fifty states.  So, institutional money is projecting online gambling to be a huge economic force in the coming years.

However, only 10 states currently have some form of legal online gambling even though states have expressed interest in opening up this tax base.  So, while the growth may not be on the level of Morgan Stanley predictions, a growing online gambling industry is a safe bet.

Currently, the global online gambling market is hovering around $50 billion, but some outlets project this could grow nearly $20 billion as some countries move to relax stringent gambling laws.  Casinos such as 888 Casino are flourishing in a competitive but growing online gambling world.

Gambling is unique in many ways, however, it does have to compete with other forms of entertainment.  And, the most direct competitor is arguably gaming.

Gaming and Online Gambling

Gaming is a massive industry that has blown up in market share much more than online gambling.  Gambling companies can rely on the fact that physical casinos still do considerable business, but as shown by the consumers’ thirst for gaming, many consumers want their entertainment online.

Furthermore, video games have crushed competitors such as board and card games, and they offer something distinctly unique for traditional family board game nights.

The gaming market share accounted for $137.9 billion in 2018, and 2.3 billion gamers contribute to this number.  Furthermore, digital game revenue accounts for over 91% of this total, so more and more business is done online.

But, the gambling industry sees more than just a competitor for playtime, increasingly gaming companies utilize gambling within their games to draw in profits.

Many of the most popular games sell loot boxes and card packs that many believe are a not so subtle form of gambling.  Legislators in Belgium and the Netherlands have argued that these types of games are effectively gambling, and as such should be more regulated.

Further regulation and legislation threatens the gaming industry, but so far no big steps have been taken that will hurt the gaming industry.  However, a shadow does loom large over the gaming industry, one that gambling may pounce on.

Large game designers and companies are taking elements of gambling from online gambling websites and casinos, and they are implementing them in lesser-regulated video games.  Dependent on legislation around the world, video game companies could be in for a world of hurt.

On the other hand, regulated online gambling and casino companies are likely observing these trends in gaming and looking to attract to users to their website.  These video games have shown that gambling is still popular, and younger generations will likely feel a casino is not all that different than some of the video games that they enjoy.

While the gaming industry shows no evidence of slowdown neither does online gambling.  Perhaps rather than viewing that as pure competitors, they can be viewed as different industries that enjoy a similar fanbase.

Gamers who plays card games like Hearthstone, shooting games like CS:GO or sports games like FIFA will all be familiar with these gambling like concepts in their games.  So, there transition into online gambling particpation is not a far step to take, and it will be one that many gamers make in the coming years.

Specifically if regulators crack down on video games for this feature, online gambling could see huge growth.  We could also see many traditional gaming companies transition into the gambling world.

Tried and tested gambling games will likely always be with us: poker, slots, roulette, and so forth.  But as casinos and gambling increasingly move into the online sphere, expect the forms which gambling takes to change in order to meet consumer demands.

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