What Does the Gambling Industry Look Like? Findings from a Report on Online Games of Chance

• The global online games of chance and entertainment market is worth 50 billion USD.
• Online gambling has entered the mainstream - gaming accounts for 11 percent of all internet traffic.
• Growth is driven by consumer expectations, new technologies and a growing need for security.
• Legal changes in individual countries are meant to adapt legislation to new challenges.

Online Games of Chance

The global online gambling industry has been growing very rapidly in recent years – according to experts' estimates, the market was worth about 30 billion USD in 2011, while by 2018 it had already reached 50 billion USD. Analyses forecast its continued dynamic growth and a breach of the 60 billion USD threshold by the end of 2020, and even 74 billion USD by 2023 – with a projected growth rate of nearly 9.7 percent per year.

– Games left the casinos long ago and have settled into the mainstream of entertainment – especially online entertainment. It is estimated that as much as 11 percent of all internet traffic is related to gaming and betting, so it is easy to imagine the scale of the industry. It is worth paying particular attention to the online casino sector, which in 2016 was responsible for 27 percent of the market – notes James Newman of Playtech, a global leader in providing solutions for online entertainment.

According to Playtech data, the online casino sector worldwide was worth 12.2 billion EUR at the end of 2018 (9 billion EUR in 2015). The largest market is Europe – worth 7.8 billion EUR in 2018. According to industry estimates, online gambling in Poland in 2018 was worth 1.428 billion EUR.

What drives growth?

First and foremost – people. Gaming has become easier and more accessible to an ever-wider audience. This is a similar path to the one previously taken by leisure activities such as television, radio, or even free online games with hidden micropayment systems.

Second – technology. The main trends currently shaping the market are:

- Games and virtual reality – innovations are changing the way we perceive games. The first providers are already offering VR solutions to create more realistic experiences, as well as the ability to play in live virtual online casinos. Additionally, companies are using machine learning to personalize and improve each player's experience.
- Mobile – thanks to the widespread use of mobile devices and the creation of dedicated applications, new types of games make the industry more open and interesting to various consumer groups.
- Gamification – software providers are placing increasing emphasis on building player experiences and creating mechanisms for collecting points, advancing to new levels or unlocking further possibilities within gameplay. Another important element is the use of references to popular culture (e.g. superheroes or favorite movie characters).
- SSBT (Self Service Betting Terminals) – self-service terminals designed to bring the online experience to retail outlets.

Third – security. The value of the market and issues related to player safety forced changes that have made the internet the safest place to play. Customer protection depends on two factors: appropriate technological and legal solutions.

Specialized tools are available on the market that make it possible to identify people gambling in a dangerous way at an early stage and support addiction prevention processes. Proof of the need to use them can be a fine of 2 million pounds imposed in the United Kingdom on a company that failed to react in time when dealing with a person gambling in a dangerous manner.

– Technologies are the main driving force behind market development also in Poland. This can be seen in the example of the online casino segment and the official legal casino launched last year under the auspices of Totalizator Sportowy – the first place where Poles can play online fully safely and in accordance with the law – notes Tomasz Mogiła of Playtech.

The law chasing the virtual ace

In terms of legislation, regulations are already beginning to change in mature markets. This is particularly visible in online gaming, where technological development often outpaces legal regulation. This can lead to situations in which regulations negatively affect gaming experiences or even indirectly support entities operating illegally.

- The world of online entertainment will continue to develop intensively, although at different rates depending on the region. Looking globally, thanks to the level of absorption of new technologies and the size of its population, Asia is a key area. I would point to Latin America, due to the strong roots of sport in its culture, as well as Africa. We also see enormous potential in the countries of Central and Eastern Europe – of course we are closely watching Poland, but we are also observing the planned legal changes in the Czech Republic, Slovakia and Belarus – says James Newman of Playtech.

Totalizator Sportowy offers entertainment to players so that they do not have to use off-shore solutions or the so-called grey market. The company was designated by the Ministry of Finance as the only legal entity with the ability to organize and conduct operations in the field of running an online casino (details on the website podatki.gov.pl). After the change in regulations, among other things regarding the possibility of online gambling – organizing it, with the exception of mutual betting and promotional lotteries, was covered by the state monopoly.