Gaming/Gambling Forecast for Economy
By Space Coast Daily // March 18, 2021
Ever since the legalization of the gaming and gambling industry, it has experienced a steady growth rate and created jobs for a substantial part of the population whilst consistently contributing to international revenue.
This industry has managed to keep its head above waters regardless of the state of local and global economies.
The gaming and gambling industry is made up of any type of gaming or betting including but not limited to slot machines, card games, roulette, sports betting, online gaming, bingo, scratch card games, and lotteries.
A list of online casinos can be easily found nowadays on the internet using only smartphones and other gadgets . Over the years, a lot of this business took place in casinos. More recently, the gaming industry has taken advantage of the internet and delved into the virtual internet-driven gaming and online gaming industry.
Players everywhere can access games through handheld mobile devices with internet access. Due to ease of access, online gaming is steadily growing and getting a new influx of day-to-day users globally.
Growing at a compound annual growth rate (CAGR) of 4.1% since 2014, the global gambling market reached a market size of nearly $449.3billion in 2018. According to the economic forecast, growing at a CAGR of 5.9%, it is expected to have increased to nearly $565.4billion by 2022.
The gambling market is segmented into three types mainly
The casino market is segmented into three based on the sales channels. There’s the offline, online, and virtual reality(VR) segment. Offline gambling was the largest segment of the casino market as of 2018 making up for 94.3% of revenue. The VR segment going at a compound annual growth rate (CAGR) of 21.7% is forecasted to be the fastest-growing segment going forward.
In 2018, the lotteries segment amassed $207.3 billion accounting for 46.1% of the total gambling market value of $441.3 billion.
Just like the casino segment, the lotteries market is segmented into offline, online, and VR. The offline segment of the lotteries market amassed 96.2% of total sales revenue as of 2018. It is expected that the virtual reality segment at a compound annual growth rate of 14.9% will take over that spot in the nearest future
The sports betting segment is expected to be the fastest-growing segment overtaking lotteries going forward at a CAGR of 6.9%.
As with other segments, the sports betting market is segmented by sales channels into offline, online, and VR. As of 2018, the sales channel that brought in the most revenue was the offline channel accounting for 65.7% of sales. The VR gambling segment is expected to be the fastest-growing segment going forward at a CAGR of 14.3%.
Other sectors of the gambling market are also segmented by sales channels into offline, online, and VR. Offline gambling was the largest segment of the other gambling market by sales channel in 2018 at 94.4%. The VR gambling segment is expected to be the fastest-growing segment going forward at a CAGR of 15.6%.
Even though the gaming industry has been able to thrive despite the state of the local and international economy, the pandemic and lockdown dealt a huge blow to the industry.
With at least 74.6% of revenue coming from offline sales channels the closure of entertainment centers and casinos as part of the lockdowns imposed in the 1st quarter of 2020 impacted revenues and profitability for companies. It was predicted that the global market for casinos would decline by 10.8% in 2020.
While brick and motor casinos stagnate, online casinos are faring better although limited by lower discretionary spending. The increase in spending is coming largely from gaming addicts and consumer clusters spending more on online retail and entertainment during the pandemic.
As casinos reopen worldwide, there are still a few concerns. The travel and tourism sector accounts for a substantial number of gaming customers especially in gaming destinations like Las Vegas, known as the gambling Mecca of the world, and other gambling destinations where tourists make up a ton of the customer base.
Pre-COVID-19, each of those casinos attracted around 200 thousand visitors every day. Due to stringent border restrictions, visitors’ numbers have dropped.
With the global economy now in recession, recovery will be delayed further. Although online casinos are well suited for safe indulgence in gambling in the midst of a pandemic situation, this sector is still fledging and is plagued with legality issues.
Illegal in most parts of the United States, underdeveloped online funds transfer platforms also add another layer of challenge to growth.
In Europe, the region with a well-developed online and offline gambling infrastructure, casino owners are innovating in digital payments by using digital wallet services to transfer funds to customers.
There is an exponential rise in the number of live casinos and e-sport competitions driving the growth of the global gambling market.
The online gambling industry has utilized the opportunity to use digital currency and gambling on blockchain-based platforms to ensure that a higher number of consumers use these modes of payment in the global market. The increasing number of bitcoin and cryptocurrency transactions will augment the development of the global gambling market.