In this iGaming Report 2023, we’re going to explore the iGaming market worldwide, growth by region, and trends that are shaping this industry along with market leaders. As the digital era continues to unravel, fuelled by the Covid-19 pandemic and the rise of artificial intelligence, the iGaming sector is booming across the globe, more in some regions than others.
Before we jump into the analysis of iGaming trends, market size, share, and industry leaders, let’s thoroughly understand what are the factors that are driving the exponential growth of the industry.
6 Factors Contributing to the Growth of the iGaming Industry in 2023
Research and Market reports show that the gaming industry is expected to expand to $252.10 billion by the end of 2023 from $229.39 billion in 2022 at a CAGR of 9%. Here are factors that are contributing to the rapid growth of the iGaming sector worldwide.
- Growth of Internet usage: According to Statista’s report, around 64.6% of the total global population, i.e. close to 5.18 billion people are using the Internet now. With this rapid rise of internet absorption even in the developing countries of the world, online games saw growth in the user base, and hence the growth of the industry.
- Regulatory Changes: Many countries including India, Canada, Netherlands, and more legalized iGaming in the span of 5 years, creating a favorable environment for iGaming operators to operate legally and expand their user base in multiple countries.
- Technological Advancement: iGaming software, and applications along with graphics and UI have seen dramatic technological overhauls, leading to a massive rise of users onboarding online games. According to TrueList, about 3 billion people worldwide play video games, which will surpass 3.5 billion by the end of 2024.
- The Amalgamation of eSports and iGaming: In recent years, iGaming and eSports have converged to bring together two already thriving industries. Both industries came together for cross-collaboration and promotion, resulting in exciting developments and rapid growth.
- Secure Payment Methods: Payment methods on iGaming platforms have become efficient and safe, increasing player confidence and facilitating seamless deposits and withdrawals. This ease of doing transactions on the iGaming platforms has contributed significantly to the rise of the industry.
- Marketing Strategies: iGaming operators and marketing agencies have come up with innovative and relatable marketing campaigns to resonate with young audiences, thereby attracting new players.
iGaming Global Market Size 2023
The global online gambling marketing stood at $81.08 billion in 2022 and is expected to grow up to $88.65 billion by the end of 2023 at the compound annual growth rate (CAGR) of 9.3%, according to Online Gambling Global Market Report 2023 by Research & Market. In the coming 4 years (end of 2027), the online gambling market is expected to reach $125.6 billion at a CAGR of 9.1%. This is further expected to expand up to $583.69 billion by the end of 2030, according to Grand View Research.
iGaming Market Size & Forecast – Region-Wise
Let’s study the market size, revenue, volume, and forecast statistics of the iGaming industry in the key regions including Asia, Europe, North America, South America, and Africa.
North America
According to Statista, the online gambling market is expected to reach US $25.22 billion by the end of 2023. The revenue is projected to grow at a CAGR of 12.07%, leading to the projected market volume of US $39.78 billion in 2027.
On the other hand, the online sports betting market is expected to expand to US $9.55 billion by the end of 2023, making the United States the leading player globally in terms of online gambling revenue in 2023.
In the US alone, the average revenue per user (ARPU) in the online gambling market is expected to reach US $346.30 in 2023, with around 105 million users by 2027.
By the end of 2023, the user penetration in the online gambling market in the country will be at 14.3%.
Europe
According to Statista, the online gambling market revenue in Europe is expected to reach $43.01 billion in 2023 at an annual CAGR of 6.14% between the period of 2023-27. The projected market volume stands at $54.58 billion by 2027.
The online casino market in the Europe region has an expected market volume of $19.20 billion in 2023.
The average revenue per user (ARPU) in the online gambling market is expected to reach $0.82K in 2023, with a total number of users expected to reach 62 million by 2023.
The average revenue per user (ARPU) in the online gambling market is projected to amount to US$0.82k in 2023. The user penetration in the online gambling market will stand at 6.2% in 2023.
Europe is the fastest-growing region in the online gambling market.
Asia
According to Statista, the online gambling market revenue is projected to reach $10.4 billion in 2023, with an annual growth rate of 7.95% between the period 2023-27. The projected market volume in Asia is $14.23 billion by the end of 2027.
The online sports betting market has an expected market volume of $6.74 billion in 2023.
The average revenue per user in the online gambling industry is expected to reach $330.80 in 2023 with a total number of users reaching 41.81 million by the end of 2027.
The user penetration is comparatively low in the online gambling market, at 0.7% in 2023.
The Asia-Pacific is the largest region in the online gambling market in 2022.
South America
According to Statista, the online gambling market revenue in South America is expected to reach $4.25 billion in 2023 at an annual growth rate of 14.77% in 2023-27. The projected market volume stands at $7.38 billion by the end of 2027.
The online sports betting market volume is expected to reach $1.83 billion in 2023.
The average revenue per user (ARPU) in the online gambling market is expected to touch $526.50 in 2023, surpassing Asia and North America. The user penetration will be at 2.0% in 2023, indicating promising growth of the online gambling sector in the South American market.
Africa
According to Statista, the online gambling market revenue is expected to touch $1.62 billion by the end of 2023, growing at an annual rate of 8.60% between the period 2023-27. The projected volume stands at $2.26 billion as per the report.
The online sports betting market is expected to grow to $0.75 billion by the end of 2023.
The average revenue per user (ARPU) for the online gambling market is expected to amount to $296.00 in 2023, just behind the US. The total number of users in the online gambling market is expected to reach 6.90 million by the end of 2027, with the user penetration standing at 0.4%.
iGaming Trends to Watch in 2023
As per the SOFTSWISS report, the unprecedented iGaming industry growth is fueled by poker, bingo, sports betting, and casino, among others. Here are further trends that are going to reshape the online gambling industry in the foreseeable future.
AI-Powered MarTech Tools
iGaming operators now are equipped with AI-powered MarTech SaaS that allows them to segregate their data into granular reports for campaigns that result in better performance. Now they can segment their player data on the basis of age group, geographies, game preferences, and even specific behavior like gaming patterns. The result of which is a hyper-personalized approach to increase user retention and transactions on the platform.
Soaring Online Advertising Costs
In 2023, the cost of user acquisition has shot up as much as 3X of the year before. The banner advertising is no longer effective and search engines are more discerning, leading to affiliates and gaming operators focussing more on dynamic content including video, and audio formats. This led to a sharp increase in online advertising costs for gaming operators.
A Touch of Stardom
There are two benefits of onboarding a star as a brand ambassador for gaming operators – influencing the trust factor among players, and attracting more players onboard. Therefore, iGaming operators are now bringing in the star quotient to their online games to get more user registrations. For example, India’s leading money gaming platform WinZo has roped in former captain of Indian cricket MS Dhoni to attract young audiences to their platform.
More Focus on Player Engagement
Major focus of the iGaming operators will be on player engagement through 2023. Given the economic downturn and the macroeconomic conditions across the globe, market-conscious gaming operators are keener on player involvement rather than player acquisition.
Personalization is the Key to Success in 2023
Gone are the days when developers developed games just for the heck of it. More focus is now on bringing personalization to the gaming platforms to deliver value to players, instead of just a betting platform. Gaming operators are now more keen on taking a user-centric approach while developing and updating online games.
iGaming Goes Mobile
Over 60% of the global population is now using a smartphone – which means ample opportunities and a pressing need for iGaming operators to go mobile. Over the past few years, players on mobile gaming platforms have dominated the numbers. Gaming enthusiasts now prefer smartphones as their most preferred channel to engage with an iGaming platform.
The new-age gaming operators are now moving from PC gambling to mobile gaming. Also, advertising has witnessed a significant change with more advertisers now focusing on mobile marketing to acquire new users and retain the existing ones.
AR & VR in iGaming
AR and VR technology has witnessed an upward trend in the iGaming industry. For more immersive and life-like experiences in iGaming, developers are now cashing in on this new-age technology after Pokemon Go’s massive overnight success.
If we go by numbers, Industry ARC suggests that AR & VR Game market will expand to $11 billion by 2026 with a CAGR of 18.5% in the period of 2021-26.
AR & VR will also be integrated into mobile games and wearable devices like smartwatch for an immersive gaming experience.
Flexible Payment Methods
To reduce friction and improve engagement on the platform, iGaming operators are introducing new and improved payment methods including Google Pay and Apple Pay. They are also integrating local payment methods to build trust among their users and help them facilitate safe transactions on the platform. Also, the introduction of cryptocurrency on the iGaming platform has also enabled users to make payments and withdrawals in cryptocurrencies.
Local Regulations
Worldwide countries are working and devising frameworks to regulate iGaming to control local markets and improve its monetization on a national level. 2023 is a pivotal year for the development of regulations across the globe. Recently, India announced new regulations around iGaming in April 2023. They announced setting up self-regulatory organizations to approve games that comply with the country’s rules of operation.
Bonuses & Promotions to Curb Addiction
While a regular mobile game would reward users for spending more time on the application, the same doesn’t hold true for iGaming apps and platforms. In 2023, bonuses and promotions will serve a less popular but equally important function – to regulate addictive behavior among players. If a player spends lesser time on the platform, the operators would reward them with reward points or real money to limit their activity.
Responsible Gaming
In the past few years, efforts are being made by government bodies and even iGaming operators to promote responsible gaming. This includes preventing addiction, dealing with problematic players, managing marketing activities, providing safe payment methods, and others.
Over the last few years, the efforts to make iGaming a safe industry have paid off. The number of problematic players is decreasing, while the at-risk group still needs attention.
According to iGaming Business, the percentage of problem gamblers fell to 5.97% in 2022 from 9.6% in 2020. However, the at-risk group shows an upward trend at 64.47% in 2022.
Data Privacy First
5 years into GDPR, more and more countries are now taking data privacy as a priority, which includes the iGaming industry as well. Players in iGaming want to protect their data from fraud, theft, and even unsolicited marketing outreach, therefore they place triple demands on platforms that ask for their financial data for transactions. iGaming entities usually ask for two points out of three.
Similarly, affiliates also prefer to protect their data and share only those absolutely necessary. In 2023, more stringent measures are expected to come into place in terms of data privacy regulations.
Some of these include:
- Players want to know what data iGaming operators are collecting, who it will be shared with, how it will be, etc.
- Players want more control over what data they’re choosing to share.
- There has been a 50% rise in data protection complaints ever since GDPR came into effect.
- Even with more measures to protect data, frauds have become sophisticated and dodge the protective layer easily.
No Place for Casinos Without Verification
To enhance the ease of joining an iGaming platform, operators often dodge the requisite verification process. However, this will now draw negative attention and make it difficult for iGaming operators to obtain a license from authorities like Malta Gaming Authority, which is known for its strict and immediate player verification requirements.
Previously, businesses used to skip this step or make it shorter to make it easier for players to join a casino. Even banner ads with affiliates without verification result in better conversion rates, since the player doesn’t have to do anything – just register and play.
Despite the benefits, this methodology is neither safe nor sustainable. Going forward, casinos without a proper verification process will be unable to obtain a license.
Types of Online Casino Fraud 2023
Key Players in iGaming Industry 2023
Key players in the iGaming industry in 2023 are investing in new partnerships and acquisition channels to attract new players to their platforms. Additionally, they are also working on user experience on their platform to reduce friction for new users. They’ve also added new and safer payment methods to build trust among new players to add funds to their accounts.
The key players of the iGaming industry in 2023 are given below.
