The gambling industry has been having a strong run of late. In 2015 the online gaming market alone was worth $37.91 billion and is forecast to be worth almost $60 billion by 2020.
This fast-growing market has more than doubled in size since 2009 – a time when most of the global economy has been stagnating. Factor in land-based casinos, lotteries and bricks-and-mortar betting shop and the gambling industry as a whole is valued at a massive $525 billion.
And there’s even more reasons to be cheerful if you’re in the gambling industry. The US market looks sure to open up to online casino operators given the precedent set by the Supreme Court, which last year overturned the PASPA ruling against sports betting.
Driven by factors including reduced debt and improved margins, investors in the industry are seeing their stocks going from strength to strength. But how can you get involved? Let’s take a look at some of the ways you can start reaping the lucrative benefits this promising industry can offer.
Affiliate marketing is a great way to get involved in online gambling – particularly if you already have a blog or website with content relating to the industry. Pre-existing knowledge of the industry is a plus, but it’s not essential as there are plenty of online resources to build a solid knowledge base from.
Affiliate marketers play a key role in making online casinos successful, as they help drive traffic to operators’ websites having first warmed customers up to making a purchase. Affiliate content often looks like product reviews that direct the reader to the online casino’s website – but it can also be a banner ad. Whatever form it takes, affiliates get paid for every reader who ends up clicking through and making a purchase on the casino’s website. The casino know which affiliate has sent them there as the link contains their ID or username.
In the revenue share model, affiliates get a percentage of their partner’s net revenue generated by referred players. It’s an approach often favoured by affiliates because it offers long-term income, while for operators it works because it motivates affiliates to generate high quality traffic. Some trusted partners can get up to 50 per cent commission with no negative carryover. Alternatively, under the cost per action (CPA) model casinos offer a fixed rate for every player determined by actions like registration or placing a bet. A third option is a mixed model, which sees casino operators offering a mix of the two.
Affiliate marketing is a good way in to the industry for those who don’t necessarily have a lot of seed money but want to gain a foothold and understanding of the sector. It’s also a useful way for bloggers and webmasters to earn money from the content they produce.
Investing in the gambling industry
The rapidly changing landscape of the gaming sector offers lots of opportunities for those wanting to start their own business or invest in established operations, particularly in the fast moving online space. There are a number of areas investors might look to put their funds, including in:
Online casinos continue to be a strong growth area. The reason for this is clear: they provide players with a way to enjoy a realistic casino experience from the comfort of their own home – and these online games are better and faster than ever before. What’s more, online casinos are also able to attract large numbers of players by offering attractive promotions such as no deposit bonus, which adds further to their appeal.
As well as being able to play from their homes, gamblers can also have a flutter if they’re on the move – on any mobile device. Mobile devices have become more commonly used than desktop PCs to access the internet, and this has been a key reason why online operators have flourished in recent years.
The smartphone market had previously been a difficult one to access thanks to key platform holders Apple and Google proving strict gatekeepers when it came to gambling apps. More recently, however, they’ve come to take a more relaxed stance with the latter, for example, now accepting apps from developers that hold a valid betting license in the territory they’re targeting.
Those licenses, meanwhile, are becoming more readily available as countries rush to hand out licenses and benefit from the tax revenue they offer. As the middle classes in developing countries grow there are increasing amounts of disposable income to be spent, offering a sizable new opportunity for companies willing to move on new markets.
US sports betting
In May 2018 the long-running battle to allow US states to determine their own sports betting laws was finally won. Now there’s a gold rush among companies looking to get a piece of the action. It was a move that added upwards of £1.5 billion to the value of some of the online gambling heavyweights overnight.
Because of this, sports betting is a massive new market in the US – and experts are predicting it will grow even more in the coming years as more states legalize it. The American Gaming Association estimates that Americans illegally wager around $150 billion a year on sports betting – a number with the potential to go up as it becomes legitimate. As of the start of 2019 Nevada, New Jersey, Delaware, West Virginia, Mississippi, Pennsylvania and Rhode Island have all legalised sports betting, with 19 more states having either recently passed a bill or had one introduced.
While investors and entrepreneurs unfamiliar with gaming culture might be inclined to dismiss eSports, it’s a huge new field for the gambling industry. eSports, in a nutshell, is online competitive gaming and it attracts huge audiences already acclimatised to participating in their favourite pastime through their screens. It continues to grow as the already multi-billion dollar mainstream video games industry pushes into the space.
The audience viewing figures are incredible. In the Mid-Seasonal Invitational tournament organised by League of Legends, 60 million people tuned in to watch. So it stands to reason that eSports are only going to get more popular – and backing the right eSports brand could be hugely lucrative.
Daily fantasy sports
Daily Fantasy Sports is already a staple of US sports fandom, but there may be untapped potential in Europe. It originally developed in the mid-2000s as a way of exploiting a loophole left in US gambling legislation designed to allow fantasy sports leagues to operate. Where the leagues conventionally run over the course of a full season, daily fantasy sports instead compresses the action into just one day.
More recently the two biggest operators in the field, DraftKings and FanDuel, have made moves on Europe. It remains to be seen whether the format can find a market in territories where conventional sports betting is already well established – but it’s an area that’s more than proved itself in the US.
While there are question marks hanging over certain areas of the gambling industry, it looks clear that there will continue to be opportunities for savvy entrepreneurs and investors over the next few years as online continues to expand and US sports betting continues to grow.