iGaming in 2024: The Evolution, Impact, and Future of the industry

There are many aspects to the iGaming industry which have led it to become the key player in the economy today, affecting regulations and making headway in emerging markets despite challenges.

EVOLUTION OF THE IGAMING INDUSTRY

Over the past decade, the iGaming industry has experienced pronounced growth and change, played in part due to accelerated technological advancements and the pandemic bringing consumers online. One particularly noteworthy shift has been that of desktop iGaming users coming onto mobile devices – so much so that 58% of online casino players are now users on mobile devices. Within the span of the last decade, we have seen consumers shift from real-world casinos, to online, to mobile casinos – which has massively helped drive the industry forward.

To add to it, the emergence of cryptocurrencies has revolutionised payments in the industry, allowing for seamless transactions and opening new avenues for blockchain iGaming. Nearly every online casino now accepts cryptocurrency deposits, with dedicated platforms specialising in crypto iGaming experiences.

Moreover, we have seen the regulatory landscape undergo significant changes, with many countries introducing legal regulations to govern iGaming. In the early 2000s, operators primarily obtained licences that allowed them to operate in multiple countries. However,  many countries, especially in Tier-1, are now introducing their own local regulations, reducing online casinos operating across borders with one licence, thereby leading to a more regulated environment impacting how operators conduct business across borders.

IMPROVED ECONOMICAL IMPACT OF IGAMING

With the increasing number of countries adopting local regulations when it comes to iGaming, we are seeing operators and businesses having to navigate the various tax implications and rules to be able to operate properly in different jurisdictions.

Operators in specific markets need to now establish a company in their chosen market, and open a bank account there to carry out transactions. However, as much as this sounds like extra steps for operators, it in fact helps positively impact the economy of the chosen market, as the taxes go to the country issuing the licence instead of the country where players are spending their funds. As an example, the iGaming industry in Malta now accounts for over 12% of its GDP, showing its economic impact. On top of that, the creation of regulations often leads to creation of jobs, thereby contributing to an improved standard of living in the country.

Currently, the United Kingdom, the United States, Japan, China, and Australia have emerged as leaders in both market share and technological advancements within the iGaming sector. These countries have well-developed online gambling and land-based gaming sectors, contributing to the growth of the industry as a whole. During the COVID-19 pandemic, the majority of these market players opened their online casinos, not only retaining their player base but also expanding it several times over.

Additionally, these countries were among the first to implement local regulations, thus securing dominant positions in the market. Advertising online casinos with local licences has become more accessible, providing the opportunity to reach and engage a larger audience.

FUTURE MARKETS

In the coming years, Alpha Affiliates expects to see growth for the iGaming industry in Latin American, Asian and African markets due to the large population in these regions, coupled with growing internet penetration.

The population in Latin America is very large, and the overwhelming majority of residents do not have access to offline casinos, making online casinos more accessible to them. The nation has a strong affinity for gambling and enjoys sports betting, bingo, and lotteries – making it a key contender for the industry.

Asia is one of the most densely populated regions globally. Many countries, such as Thailand, Vietnam, and certain regions of India, are in the discussion stage of regulation within iGaming, and while places like Japan are restricting online gambling, sports betting is highly popular among its residents. In India specifically, the growth of iGaming has become evident with the development of the internet. Among players, sports betting is increasingly popular for cricket and the local Indian Premier League, as well as live dealer games.

In Africa, the markets with the highest potential and therefore where we are likely going to see the most activity are South Africa, Tanzania, Nigeria, and Kenya. The region’s potential lies predominantly in sportsbooks, and with the growth of mobile phones and the internet, online casinos and betting platforms are increasingly being introduced to the markets.

THE FUTURE OF IGAMING AND CURRENT CHALLENGES

IGaming has the potential to grow in many aspects due to technological advancements. One such way is through cryptocurrency casinos. Cryptocurrency removes restrictions on the movement of funds. And with a high approval rate, it increases the number of players worldwide by increasing access. We are going to continue to see operators take advantage of the decentralised aspect of the technology to provide access to their services across borders.

Virtual reality also poses another very tangible avenue for innovation in iGaming. We are already seeing the beginning of the transition of online casinos into the metaverse, and this will provide yet another exciting way for users and operators to drive forward the industry.Still, despite its promising trajectory, the iGaming industry faces challenges, particularly regarding regulatory compliance and market integrity.

The most significant risk to the development of the iGaming business is the proliferation of so-called “Grey” online casinos. These establishments operate without obtaining a licence, and unfortunately, at times, fail to pay out winnings to their customers. This primarily impacts the reputation of online casinos since users, after encountering such issues, may become hesitant to make deposits in other platforms. This, in turn, can decrease the overall number of online players. Moreover, these casinos often evade tax payments, leading to a shortfall in government revenue, not to mention shady working environments for employees.

For this issue to be mediated, iGambling operators need to be stringent when it comes to ensuring they are meeting all possible regulations and promoting education for users to be able to identify potential scams and not fall prey to shady tactics from these casinos.

In any case, the iGaming industry has continued to evolve throughout the years with no sign of stopping. Driven by technological advances, regulatory developments and consumer preferences, we can expect this exciting space to carry on developing and transforming for years to come.

Companies in the space will see this as an opportune time to expand their markets, take advantage of technological innovations and continue to play a part in the economy, while new users and operators get to join at the best time in this budding industry.

Written by Irina PisankoCPO at Alpha Affiliates