Online Gambling Grows Despite Challenges

Online Gambling Grows Despite Challenges

While online casino, sportsbetting, and poke sites enjoyed explosive growth in the late 1990s and early 2000s, it faced its first significant obstacle in late 2006 when the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in the US. Many online gambling companies abandoned the US market (the largest single geographic market in the world as far as online gaming) to focus their efforts instead on Europe and Asia, which stifled the overall growth of the market for several years.

Even in those relative dark times, though, worldwide online gambling revenue still managed to eke out a small year-over-year gain from 2006-2007 (based on estimates from the Global Betting and Gaming Consultancy), with worldwide revenues creeping up from $19 billion to $20 billion. That would increase to about $24 billion in 2008, $26 billion in 2009, and an estimated $30 billion in 2010.

The recent moves by the US Department of Justice to drive PokerStars and Full Tilt from the US market will more than likely cause overall revenues to take another hit in 2011, but the real story is the resiliency of the online gambling market, and the growing demand for Internet casinos, poker rooms, and sportsbetting sites worldwide. Other countries besides the US have also attempted to stamp out online gambling, while other countries such as France and Italy have attempted to regulate online gambling on the national level, which has made it difficult for some sites to market their offerings in those countries.

As far as the revenue mix, sportsbetting still remains the most popular gambling option with online bettors, responsible for 40-45% of the overall market. Poker and casino games clock in at about 20-25% each, with state lottos, bingo, and other games making up the remainder. The growth of online gaming has also come despite headwinds from struggling economies around the world, perhaps benefiting from a shift of gamblers who in the past might have visited gambling destinations such as Las Vegas or Macau staying home instead, looking to stretch their gambling dollars as far as possible.