November has seen the fifth consecutive month of growth for the US gambling industry and confirmed a global trend of moving online. But, if we want to know why online gambling is growing so quickly we need to look before everything that has happened in 2020.
Tendencies for growth were there up to a decade ago with the general rise in streaming and online industries. And, as gambling is a frequent early adopter of many technologies, it was quick to incorporate this line of income into the industry.
Online gambling gave three major advantages to the operators:
- It is predictable
- Significantly lower overhead
- Wider access to customers
Unlike the better part of the history of gambling, skinning a player to blow everything they have for a night of gambling is now against the best interests of a casino.
And, because of these advantages, the operators could focus on making their games better for players. Unlike the better part of the history of gambling, skinning a player to blow everything they have for a night of gambling is now against the best interests of a casino.
Rather, as we can see with the growing online gambling in Australia, the operator can focus on having a lot of players having fun for a long time and enjoying their platform without too much stress.
Finally, unlike brick and mortar casinos, there is no hard cap on the number of people playing a single game. One platform can have millions of simultaneous poker tables playing at once, all over the world, without any hazards to the system or the players.
The Growths Was There All Along
Reportedly, the US land-based gambling sector is down 20% in 2020, returning to the collective nominal figures similar to that in 2015. This is to be expected as the pandemic has prevented the majority of players from enjoying this type of entertainment.
Not only does the online sector remain unaffected by organic viruses, but actually thrives as people search for modes of entertainment online. Similar to streaming and video games, online gambling received a leg up in both the number of users and time spent per user.
But, this growth is not new. For almost a decade, online and digital gambling measures constant growth as more people carry devices on which they could play any time of day or night, anywhere on the Planet.
For a long time, this was a natural shift from analog to digital that we are seeing in all industries. But, with the 2020 lockdowns we only now see how many users were willing to switch even sooner, but simply didn’t take the option into consideration
It’s Easy, It’s Fun, and It’s Cheap
A trip to Vegas is something to remember, especially if you don’t have an issue with bankrolling that experience. But, that trip takes time, and even if you manage to win at the casino you still might end up with less money than you had before the trip.
This isn’t the case with online options. Because everyone can have instant access, there is no hard lower limit of how much excess money you need to have to be able to gamble. The majority of online users place less than $500 in their gaming account and spend less than $20 every day.
Such behavior was something unheard of only a decade ago as that approach wouldn’t keep you at the blackjack table even for an hour. And for slots that would be slightly over 80 runs each day. Provided you bet the minimum.
Also, you don’t need to travel to the local casino. As a matter of fact, you don’t even need to get dressed at all. Gambling from the comfort of your own home was preferable to most people.
Focusing on the Player
With online gambling increasing revenue by over 224% or more than 3 times compared to 2019, it is easy to notice how profitable this industry is. But, the main reason why it is so profitable is that it doesn’t need to focus on the profits.
Primarily, the shareholder structure for online gambling is not as diversified as in other industries. Even smaller increases are very noticeable when dividends are paid out. Also, staying in the black can be guaranteed.
With little overhead, the biggest expense for the operator is the license, which in the case of Curacao costs roughly $35000 annually for a master license.
That is why online gambling operators can focus on the players and their enjoyment. The only way to increase revenue is to increase the number of players. And that can’t be done by making the games unfair or without constant upgrading.
This focus on the player made many new players try out the platforms and stay on them. After all, money for gambling is no longer coming out of a dedicated gambling budget but can be paid from the entertainment budget.
Such a shift made it accessible to virtually everyone, and it feels on the bottom line of these companies.