The online gambling industry is global in nature, but at the same time, it is subjected to a patchwork of regulations, with each national jurisdiction having its own rules. Combined with the fact that players from different countries have unique preferences and approaches to this kind of entertainment, it’s clear that the industry consists of many interconnected niches.
This paper will compare legal conditions and market trends in various locations around the world to formulate a big-picture view that best explains this fast-growing business field.
Major Markets – UK, EU, USA & Canada
Online gambling is legal in most of the Western world, and English-speaking nations are among the biggest markets for this kind of activity. The value of all online gambling transactions in the US alone is estimated to be more than $US 50 billion per year, with the EU contributing another 30 billion.
Canada and the UK are much smaller, so they understandably generate less revenue from online gaming, but they are also in the range of 3-5 billion dollars per year. This blackjack casino operates amongst a growing competitive set in Canada who are going head-to-head for the coveted real estate space at the top of Google. It is this fierce competition that is driving the growth of these industries in salient markets across the world.
A large portion of this action comes from people in their 30s and 40s who play games primarily as entertainment. The average age of the UK player is 38 years, while the average annual spend is slightly over 20 British Pounds. This is similar to other countries from this group, but there are some differences in terms of how widely online gambling is embraced in each country.
Canada leads the list with user penetration of nearly 70%, compared to around 50% in the UK and 40% in the USA. There is a visible movement towards mobile gambling in all of the major markets, and more than 90% of all gaming platforms are now available from a smartphone. This trend goes hand in hand with the tendency to have short playing sessions of less than 30 minutes where players risk small sums for the possibility of an instant win.
Offshore Havens – Small Nations with Permissive Regulations
Since casino sites registered in Canada or the UK must meet very strict requirements regarding financial transactions and the prevention of compulsive gambling, there are operators who are avoiding these markets and migrating to jurisdictions where they face less scrutiny. This led to the development of the so-called offshore sector, which consists of websites that hold licenses from small island nations but operate on a global level.
Some of the jurisdictions that are known for approving international casino websites include Malta, Gibraltar, Curacao, Isle of Man, Alderney, Kahnawake, and several others. They typically attract large gambling companies by offering a combination of low taxes and flexible oversight, and they have local bodies that issue formal gambling licenses. As the industry continues to grow and the total number of gambling sites continues to multiply, small countries and territories have an even stronger incentive to act as virtual centers of global gaming.
Nations that Restrict Online Gambling – Russia & China
In some parts of the world, online gambling is completely outlawed and can’t be practiced without legal risks. China is perhaps the most notable example, as this huge country prohibits almost all forms of gambling and even prevents its citizens from playing on foreign websites.
Russia is another big market that places severe restrictions on this type of activity, as it allows legal gambling only in certain parts of the country and generally precludes foreign online casinos from operating within its borders. Some of the other countries where it’s illegal to play casino games online include Japan, United Arab Emirates, Cambodia, North Korea, and Lebanon. Of course, this doesn’t mean that residents of these countries completely abstain from partaking in online gaming.
Many of them clandestinely access offshore sites via VPN or go to underground websites that provide gambling services illegally. Because such activity occurs far from public view, cases of fraud or gambling addiction go unreported and present an even bigger threat. This is one of the reasons why some of the nations from this group (i.e., Russia) have been softening the restrictions in recent years.
Fastest Growing Region for Online Gaming – Asia-Pacific
While Asian nations are generally opposed to gambling and traditionally weren’t seen as big players in the iGaming industry, that status is rapidly changing as several locations in the Asia-Pacific region are turning into high-volume gaming hubs. Macao and Hong Kong have long been known as the centers of casino gambling, and they are still important in the online era. Other nations such as Vietnam and the Philippines also generate massive income from online casinos that cater primarily to foreigners.
We shouldn’t forget Australia and New Zealand, which are gaining prominence in the online gambling industry despite their relatively small populations. If the current trends persist, in a decade, this region could be just as profitable for online gaming companies as North America or Europe. It will be interesting to see if any local operators emerge to serve the robust demand for gambling services or if some of the global brands manage to establish a dominant position in Asia-Pacific.
