The real business of casinos in 2019 and beyond

Photo Credit: Aliaksandr Marko

The end of 2019 is fast approaching and just like all of the other years over the past decade, it has been a fairly great year for the global gambling industry. From massive acquisitions and partnerships to monumental regulatory developments, the year has seen its fair share of activities in as far as gambling is concerned. With the activity continuing to gain a lot of public acceptance as a mainstream form of recreation, we have to appreciate just how far the industry has come.

Recreation aside, perhaps the most notable reasons why we have seen an increase in gambling activities is the promise of economic benefits as well as tax revenues that go towards improving the areas where gambling activities are present. It is undeniable that both of those have been achieved and to a very significant extent they have been the basis of even more expansion. However, there is much more to the story.

Where Has It Come From?

To effectively elaborate on the growing lucrativeness of the gambling sector, we need to indulge in some retrospection. Looking back even just a couple of years we can see a tremendous shift in the way things used to be especially when we use revenue as the metric. For instance, in 2018, global gross gambling revenue was a whopping $450 billion.

Needless to say, those figures are mind-blowing but all the same, they are a rather acceptably accurate depiction of the state of the gaming market. It is worth noting that this may not actually reflect each and every market but it will be very useful information for any person looking to invest in the business. It is worth noting that the biggest markets were North America, Europe, and Asia-Pacific. They received the most attention which means that other markets’ statistics may have flown under the radar.

Where Is It Headed?

Some subtle improvements in various verticals were recorded for 2016 and 2017 but a recent report forecasted that the industry would get to a value of $495 billion in 2019. That is a pretty huge year-on-year jump. Factoring in the compound annual growth rate (CAGR) of 4.1 percent since 2014, the gambling industry is expected to adopt a CAGR of 5.9 percent that will see it clock a whopping $565 billion by 2022.

There are currently several economic techniques that are used to assess the impacts of the growing gambling activities and this may make revenue statistics seem too optimistic. Well, a lot definitely has to be put into consideration when forecasting the future of the industry and most of them were factored into the revenue projections. But is that enough?

According to Darcy Lancelot from speaking at the recent Taiwan 2019 Asian Gaming Summit, there is undeniable growth in the industry but rather than solely relying on crude accounting to forecast the industry’s future, experts should consider other approaches. She believes that while even rudimentary revenue analyses are critical for investment charting, it is possible that they can be misused by parties that do not have full comprehension of their limits.

So, yes. The industry is definitely growing but some of the statistics will not be spot on. However, even if they do not match up to what will eventually in the near future, they could be great policy-making tools if they are done correctly. Luckily, in many of the verticals of gambling across the world, this is exactly what is being done.

Capitalizing on Growing and Emerging Markets

Rather than relying on the idea that gambling as a whole is going to get bigger and bigger, many companies have seen it fit to pick specific areas of capitalization. This is probably the best option since there are actually a few sectors of the gambling market that have recorded notable declines despite overall growth.

So, what is gambling likely to be all about in the future? The answer seems to lie in the following areas:

More Regulation

In a number of jurisdictions, gambling has proved to be an inevitable wave. In the United States, for instance, the Supreme Court lifted the federal ban on sports betting. Japan is also set to unveil Integrated Resorts in the near future. The economic potential of the activity cannot be ignored and its prevalence is hard to suppress which makes proper regulation the only way forward.

Better regulation will not only mean more benefits for the economies of various economies but it will also ensure that the best possible customer protection measures are being adhered to. In 2019, regulatory measures are no longer just a concern of the authorities – even the operators are getting involved in a bid to make the market fair to all.

Mobile Gaming

Digital gambling has been a big deal since the 90s. Mobile gambling, on the other hand, is fairly new but it is growing like wildfire thanks to the rapid advancement of mobile technology and access to the internet. Placing bets on your mobile phone is getting easier by the day and every operator is either already riding the wave or is preparing to do so. This will allow them to exponentially expand their customer bases and boost revenues significantly.

Esports Betting

Esports betting is an emerging market that is very enticing and that is simply because of the massive popularity and extensive growth of the Esports industry. Fans of Esports tournaments and events have been looking to enjoy a bit of gambling fun for so long and it seems their wishes are already coming true. Currently, only a few gambling operators offer betting markets on Esports but the number has been growing steadily. If the revenue projections and forecasts for the esports market alone are anything to go by, there is a lot to look forward to.

Digital Currencies and the Blockchain

Cryptocurrencies and blockchain technologies have been headliners over the past decade and one of the areas they have recently disrupted is the gambling industry. The future looks very bright as the disruptive technologies have contributed to the much-needed increase in the variety of gaming and payment options available to customers.

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