Total iGaming spend could reach $1trn by 2021, say analysts

Coinslot Juniper iGaming
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Juniper Research, specialists in data forecasting for mobile and digital markets, projects mobile and online gaming wagers to almost double in five years.


Analysts at Juniper Research have caused a stir among industry execs this month with the publication of an extensive white paper mapping the growth of online gaming over the next half decade.

While the direction of travel is unlikely to come as a surprise, its headline forecast – that total wagers made on mobile and online will reach $946bn by 2021 – is turning heads.

Extraordinarily, Juniper states: “Wager levels will thus approach total spend on all digital goods and services by 2021, forecast to exceed $1trn for the first time in 2021.”

The almost doubling of the market in such a short period (from $554bn in 2016) requires a staggering and sustained compound annual growth rate of 14.1 percent, making IGaming one of the highest performing asset classes there is.

“Gambling is an act which spans centuries,” reads the report: Online Casinos: Gambling on Loyalty, “and through the use of regulatory measures coupled with new technologies and delivery channels, we have seen this evolve into a mainstream pastime via the use of the Internet.”

The report’s author, Lauren Foye, attributes this spectacular expansion to various technological advances that are only now beginning to change consumer habits and reduce trust barriers. In essence, as smartphones and eCommerce have penetrated social and economic life, consumers have become increasingly open to online and app based services, and more comfortable submitting their financial details online, with huge ramifications for gambling.

Traditionally ‘bricks and mortar’ betting brands have been core drivers of online growth to date, by coaxing their players online. But increasingly it is the additional ‘monetisation strategies,’ those that blur the line between gaming and gambling, that have expanded the market.

By combining conventional hand-held gaming with casino features, developers have created new genres in casual and social gaming. In doing so the market of gambling consumers has rapidly expanded, no longer narrowly limited to those interested in sport, or inclined to visit a gaming venue, that may or may not be local, accessible or desirable. As people can place wagers in almost anything now (skill games, politics, TV shows and so on) the global market today is limited only by: the availability of regulated markets; smartphones capable of running the relevant software; and player bank accounts capable of making the transaction. Juniper’s forecast for iGaming growth is largely based on the continued proliferation of all the above – notwithstanding the disruptive potential of 5G networks.


“User engagement goes a long way towards drawing in return business”


Running in tandem to the expansion of customers, is the intensification of existing customer contact time. Mobile gaming is not restricted by locality, leisure time or the length of a game cycle; developers are focussing on keeping players betting over prolonged periods of time, whilst giving the player the illusion of ‘control.’ Mobile technologies are fuelling this enhanced player engagement through the use of in-play betting, live streams and media.

“User engagement goes a long way towards drawing in return business,” said Foye. “Providing features such as news and media on favorite teams, as well as personalized offerings based on past betting activity, enables greater engagement and is likely to reduce churn.”

Juniper predicts the intensification of player activity will be the strongest driver of growth in the West, where the number of new players is not expected to increase substantially. Instead, the spend per player is projected to increase rapidly until 2021.

Conversely, it expects extensive growth in new customers in Chinese, Latin American and Asian Pacific markets, as supportive regulation, internet access and smartphone technology become more prevalent.

“However, we have significantly amended our estimates and corresponding short-term forecasts for 2015 onward in the wake of the prohibition of online lotteries in China implemented in March 2015,” the report reads. “While we envisage a lifting of the ban in Q4 2016 and significant immediate re-adoption, user numbers will inevitably be affected.”

Bullish on VR; bearish on Bitcoin, Juniper’s white paper also makes projections for sectors within iGaming: Virtual Reality (VR) and cryptocurrencies.

Virtual reality is bound to further intensify customer engagement, it says, – particularly in the online casino vertical – however analysts are divided over the speed of adoption for high-end technology. Currently headsets can cost around $300, but the PCs necessary to run the software are still running at over $1,200. Juniper considers these prices to drop considerably in the next 2-3 years, meaning VR could hit the mass market by 2019. In the meantime, it suggests early adopters of VR are likely to be big betters.

Its prescription for cryptocurrencies such as Bitcoin is not as optimistic, largely due to issues surrounding money laundering and its subsequent regulatory complications.

“Whilst a number of leading sportsbook providers, including William Hill and 888 now offer Bitcoin, Juniper believes that the cryptocurrency is unlikely to see mass-adoption, even in the gambling space,” it said.

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