The Future of Online Gaming — LexisNexis® Risk Solutions
Nearly 80% of the U.S. has either legalized sports wagering or introduced a legislation to do so1. Many states are taking full advantage of the opportunity by approving mobile sportsbook apps and statewide betting while others are choosing the more limited route of in-person wagering at sportsbooks.
In the aftermath of the COVID-19 pandemic, more states have chosen to examine legalizing sports betting to offset budget losses. Disney’s CEO Bob Chapek announced at an investor conference that ESPN is getting “more and more aggressive” in pursuing sports betting partnerships2.
The global online gambling market was expected to grow from $64.13 billion in 2020 to $72.02 billion in 2021 at a compound annual growth rate (CAGR) of 12.3%3. The market is expected to reach $112.09 billion in 2025 at a CAGR of 12%. There is explosive growth happening in the market and within this article, you will discover the 5 top trends from the online gaming industry4:
1. The industry is still acclimating to omnichannel
Like any industry, data is an asset for online gaming. Historically, the data resided in silos and partly offline. However, with changing customer expectations on an omnichannel approach, the biggest challenge is to bring the data together. There are two main options:
The pie is getting bigger with more companies and users entering the industry. As businesses open new digital channels, there will be more opportunities for the industry to acquire new customers. In the process, millennials who are more likely to interact digitally will be attracted by the onsite activities, which may increase the foot traffic in casinos.
Customers want personalization, convenience, and speed. Online gaming is a highly regulated industry. Each state has it own regulations and this creates fragments in the industry, which makes it challenging for companies to leverage innovative measures. One of the best places for the industry to start is with high spend and high frequency customers if they want to test creative customer experience focused workflows. High spend and high frequency customers are more willing to experiment or be a part of an experiment around improving the customer experience5.
3. Being ready in the market is the key to success
The online gaming operators are in growth mode and their focus is on expanding their presence by securing a license to operate in as many states as possible, being compliant with applicable laws, and capturing a customer base. It is important for operators to be ready with compliance and customer experience workflows to expedite the launch of online gaming in new territories. This way, they can capture more customers without losing valuable time.
4. It’s a fragmented industry with a need for a single platform
Different states with different regulations don’t make it easy for operators to launch their products in new geographies or provide a consistent customer experience. The good news is that every state that launches online gaming has the ability to see what previous states have done, presenting an opportunity for improvement.
5. Alternative modes of payment
Operators are becoming more like financial institutions. They are building payment stacks and delivery mechanisms. It is not easy to acquire customers, and it is even harder to retain the existing customers. Customers need easy access to currency to enable a frictionless customer experience. There is a need to mix and match flavors of cash and credit.
Continued M&A activity:
Penn National Gaming bought Score Media and Gaming in a $2 billion deal and DraftKings swept in to purchase Golden Nugget Online Casino for $1.5 billion in stock. These acquisitions are a means to access technology6,7. Major stakeholders will most likely continue to buy versus build because it is the most efficient mechanism by which they can achieve vertical integration and product differentiation. This is just the beginning of a period of robust acquisition activity in the sports betting, online casino, and broader competitive entertainment industry.
The U.S. sports betting and iGaming industry is on its way to being the largest in the world8,9. Operators and casinos should work together to have a 360-degree view of what they can do. Stakeholders who focus on customer experience will be the winners in the end.
The biggest question that still remains is how to enhance the customer experience in a highly regulated and fragmented market. It is crucial to connect the silos. Two of many options for bringing the industry together include having cross state sharing of digital data and or maintaining a ledger to allow one user per website to play.
Sources:
1. Legal Sports Betting: www.legalsportsreport.com/sportsbetting-bill-tracker/
2. Disney Is ‘Aggressively’ Pursuing Opportunities In Sports Betting: www.forbes.com/sites/willyakowicz/2021/11/11/disney-is-aggressively-pursuing-opportunities-in-sporting-betting/?sh=4439f825275d
3. Online Gambling Global Market Report 2021: www.researchandmarkets.com/reports/5321374/online-gambling-global-market-report-2021-covid
4. Global Online Gambling Market Report (2021 to 2030) – COVID-19 Growth and Change: www.prnewswire.com/news-releases/global-online-gambling-market-report-2021-to-2030—covid-19-growth-and-change-301300847.html
5. American Gaming Association: www.americangaming.org/resources/aga-commercial-gaming-revenue-tracker/
6. Penn National Gaming Completes Acquisition of Score Media and Gaming Inc.: www.yahoo.com/now/penn-national-gaming-completes-acquisition-152600630.html
7. DraftKings buys Golden Nugget Online Gaming for nearly $1.6 billion: www.cnn.com/2021/08/09/investing/draftkings-golden-nugget-online-gaming/index.html
8. Sports Betting Market Size Worth $140.26 Billion By 2028: Grand View Research, Inc.: www.bloomberg.com/press-releases/2021-10-19/sports-betting-market-size-worth-140-26-billion-by-2028-grand-view-research-inc
9. Global Sports Betting Market to be worth US$ 179.3 billion by 2028 with CAGR of 8.33% during 2021 to 20228 – Zion Market Research:www.prnewswire.com/news-releases/global-sports-betting-market-to-be-worth-us-179-3-billion-by-2028-with-cagr-of-8-33-during-2021-to-2028–zion-market-research-301370184.html
In the aftermath of the COVID-19 pandemic, more states have chosen to examine legalizing sports betting to offset budget losses. Disney’s CEO Bob Chapek announced at an investor conference that ESPN is getting “more and more aggressive” in pursuing sports betting partnerships2.
The global online gambling market was expected to grow from $64.13 billion in 2020 to $72.02 billion in 2021 at a compound annual growth rate (CAGR) of 12.3%3. The market is expected to reach $112.09 billion in 2025 at a CAGR of 12%. There is explosive growth happening in the market and within this article, you will discover the 5 top trends from the online gaming industry4:
1. The industry is still acclimating to omnichannel
Like any industry, data is an asset for online gaming. Historically, the data resided in silos and partly offline. However, with changing customer expectations on an omnichannel approach, the biggest challenge is to bring the data together. There are two main options:
- Cleanse the existing data to bring it in consumable format: This approach would provide a focused view of consumer data in context of the industry if organizations were to clean their own data and make it available online.
- Leverage the industry to build more accurate and meaningful data from scratch: Though difficult from multiple stakeholders’ perspective, this approach cannot only help the industry leverage data from other industries like retail and banking, but it can also help build a consortium with more meaningful and actionable insights.
The pie is getting bigger with more companies and users entering the industry. As businesses open new digital channels, there will be more opportunities for the industry to acquire new customers. In the process, millennials who are more likely to interact digitally will be attracted by the onsite activities, which may increase the foot traffic in casinos.
Customers want personalization, convenience, and speed. Online gaming is a highly regulated industry. Each state has it own regulations and this creates fragments in the industry, which makes it challenging for companies to leverage innovative measures. One of the best places for the industry to start is with high spend and high frequency customers if they want to test creative customer experience focused workflows. High spend and high frequency customers are more willing to experiment or be a part of an experiment around improving the customer experience5.
3. Being ready in the market is the key to success
The online gaming operators are in growth mode and their focus is on expanding their presence by securing a license to operate in as many states as possible, being compliant with applicable laws, and capturing a customer base. It is important for operators to be ready with compliance and customer experience workflows to expedite the launch of online gaming in new territories. This way, they can capture more customers without losing valuable time.
4. It’s a fragmented industry with a need for a single platform
Different states with different regulations don’t make it easy for operators to launch their products in new geographies or provide a consistent customer experience. The good news is that every state that launches online gaming has the ability to see what previous states have done, presenting an opportunity for improvement.
5. Alternative modes of payment
Operators are becoming more like financial institutions. They are building payment stacks and delivery mechanisms. It is not easy to acquire customers, and it is even harder to retain the existing customers. Customers need easy access to currency to enable a frictionless customer experience. There is a need to mix and match flavors of cash and credit.
Continued M&A activity:
Penn National Gaming bought Score Media and Gaming in a $2 billion deal and DraftKings swept in to purchase Golden Nugget Online Casino for $1.5 billion in stock. These acquisitions are a means to access technology6,7. Major stakeholders will most likely continue to buy versus build because it is the most efficient mechanism by which they can achieve vertical integration and product differentiation. This is just the beginning of a period of robust acquisition activity in the sports betting, online casino, and broader competitive entertainment industry.
The U.S. sports betting and iGaming industry is on its way to being the largest in the world8,9. Operators and casinos should work together to have a 360-degree view of what they can do. Stakeholders who focus on customer experience will be the winners in the end.
The biggest question that still remains is how to enhance the customer experience in a highly regulated and fragmented market. It is crucial to connect the silos. Two of many options for bringing the industry together include having cross state sharing of digital data and or maintaining a ledger to allow one user per website to play.
Sources:
1. Legal Sports Betting: www.legalsportsreport.com/sportsbetting-bill-tracker/
2. Disney Is ‘Aggressively’ Pursuing Opportunities In Sports Betting: www.forbes.com/sites/willyakowicz/2021/11/11/disney-is-aggressively-pursuing-opportunities-in-sporting-betting/?sh=4439f825275d
3. Online Gambling Global Market Report 2021: www.researchandmarkets.com/reports/5321374/online-gambling-global-market-report-2021-covid
4. Global Online Gambling Market Report (2021 to 2030) – COVID-19 Growth and Change: www.prnewswire.com/news-releases/global-online-gambling-market-report-2021-to-2030—covid-19-growth-and-change-301300847.html
5. American Gaming Association: www.americangaming.org/resources/aga-commercial-gaming-revenue-tracker/
6. Penn National Gaming Completes Acquisition of Score Media and Gaming Inc.: www.yahoo.com/now/penn-national-gaming-completes-acquisition-152600630.html
7. DraftKings buys Golden Nugget Online Gaming for nearly $1.6 billion: www.cnn.com/2021/08/09/investing/draftkings-golden-nugget-online-gaming/index.html
8. Sports Betting Market Size Worth $140.26 Billion By 2028: Grand View Research, Inc.: www.bloomberg.com/press-releases/2021-10-19/sports-betting-market-size-worth-140-26-billion-by-2028-grand-view-research-inc
9. Global Sports Betting Market to be worth US$ 179.3 billion by 2028 with CAGR of 8.33% during 2021 to 20228 – Zion Market Research:www.prnewswire.com/news-releases/global-sports-betting-market-to-be-worth-us-179-3-billion-by-2028-with-cagr-of-8-33-during-2021-to-2028–zion-market-research-301370184.html