Gambling Industry: What Will the 2020 Show?
Today, when only a couple of months are left until the end of 2019, it is time to talk about the prospects of the gambling industry. This article systematises the main trends in the gambling business and key points that all entrepreneurs should pay attention to.
The gambling industry is slowly but steadily gaining momentum, and in 2020, its growth rate will only increase. This fact is confirmed by a large-scale study of the H2 Gambling Capital consulting company. Please find hereby some excerpts from the study, formalised in a table.
Growth Dynamics of the Gambling Industry in 2018-2020
|Indicator||Years||The expected growth rate in 2020|
|Gross income in billions of euros||379,0||390,4||401,5||+11,1|
|Revenues from land-based gambling establishments|
|In billions of euros||333,8||341,6||348,9||+7,3|
|In percentage points||88,1||87,5||86,9||-0,6|
|Revenues from online gambling|
|In billions of euros||45,2||48,8||52,6||+3,8|
|In percentage points||11,9||12,5||13,1||+0,6|
In 2020, the gambling industry will show total profitability of 401.5 billion euros, which is 11.1 billion euros more than the previous year. In percentage points, it is only a 2.7% increase but taking into account the continuous growth of the industry since 2011, this is a pretty good result.
Analysts believe that revenues will increase further. The main reasons for it are active development in the IT-sphere and improvement of the standard of living of the well-off section of the society.
As for the structure of earnings, the main role here is still played by traditional, offline slot machines. In 2020, they will bring 86.9% of the revenue, and the virtual sector will generate only 13.1% of the total profit.
This overbalance towards the land-based business can be explained by two factors:
Casino business remains the industry leader
Its turnover reaches billions of euros per year. It is still difficult for a modern online business to compete with such “giants” as Las Vegas, Macau, Lisbon, and other world centres.
Land-based gambling clubs will continue growing. The main reason is that they not only bring profit to their owners but also allow the owners of infrastructure projects to earn money — these are hotel chains, business centres, restaurant business, and passenger transportation.
The legality of online business is still not certain
While the land-based poker and casino business is doing well, the online segment is facing some legal restrictions in several countries. For example, online gambling is banned in China, Germany, almost all states of the USA, and many other rich countries.
Nevertheless, the share of profits from online businesses shows slow but stable growth. In 2020, it will be + 0.6% of the total profitability. Experts predict that already in 2040, the virtual casino industry will bring 50% of all profit.
Despite the clear supremacy of offline slots, analysts recommend beginning entrepreneurs to invest in the Internet segment. The threshold for entering the land-based casino business is high enough. However, to launch your own website, you will need a relatively small amount of money.
Today, there are several international companies that allow you to work under a franchise and provide the beginners with professional financial and legal support.
The growth rate of the virtual industry will constantly increase, and here is why:
- Global trends in the field of the provision of services on the Internet. The development of innovative technologies allows you to get almost any service on the Web, and the gambling business should not stand out. This approach gives manoeuvrability and a much wider choice of specific solutions. Today, the gambling business is represented by casinos, sports betting, state lotteries, multi-level poker tournaments, high-quality slot games, and a wide range of modern products.
- The growth of mobile gambling. Mobile applications for games are only gaining popularity but by 2025, according to experts, they will completely outcompete desktop solutions.
It primarily relates to artificial intelligence, the capabilities of which are being actively studied by providers.
AI is already used for:
- the analysis of habits of gamblers;
- the creation of a personalised game, which is based on the preferences of a particular user;
- combating all types of fraud.
Many countries are going to use AI to fight against ludomania.
VR (virtual reality) is another promising area. This technology has been actively used on various streaming channels, as well as in live casinos.
In the future, the popularity of VR will only grow. Already today, the cost of the necessary equipment for virtual reality is significantly reduced, and developers are releasing high-quality gadgets at a democratic price.
Because of the loopholes in the law, many countries do not receive huge amounts of the expected taxes, a part of which goes to large offshore corporations or grey taxation zones. Governments of such countries promise to radically reconsider its policy by 2020.
Investors are waiting for the opening of promising and prosperous online markets in Germany, China, Ukraine, the USA, and many other countries.
The gambling industry is a rich and promising field that has shown steady growth over the past few years. Among the main trends of 2020, we can name the appearance of new markets, the well-thought-out use of information technology, and the steady growth of the online segment.
Beginning entrepreneurs should take a closer look at the online business but big investors will be able to “cope with” the land-based market. The Gaminator company will assist you in launching a project of any format.
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