The global iGaming market is a lucrative and fast-growing entity, and one that peaked at a value of $61.5 billion at the end of 2021.
It’s also projected to grow at a compound annual growth rate (CAGR) of approximately 10.9% between now and 2028. As a result of this sustained double-digit growth, the global iGaming space will be worth an impressive $114.4 billion in five years’ time.
Of course, it stands to reason that such a high growth market would be characterised by fast moving trends that create an almost constant state of evolution. But what are the iGaming updates that we expect to see in 2023, and how will they impact the market and its individual operators?
1. The Rise and Rise of the US Marketplace
We’ll start with the projected expansion of the US market, which will be a key factor behind global iGaming growth over the course of the next five years.
This trend will certainly continue at pace through 2023, across both remote betting and iGaming verticals. The latter point is particularly interesting, as while only six states have legalized online casino gambling to date, these local authorities continue to report record breaking revenues and tax levies.
Nowhere is this truer than in Pennsylvania, where casino operators in the state recorded a staggering $162.3 million in gross revenue during February. This isn’t far off the record for the state, while the operators on this PA online casino list achieved new revenue highs for three consecutive months in the final quarter of 2022.
February also became the second-largest revenue month ever in the state of Pennsylvania, with December 2022 producing the record figure of $166.9 million. The last month also saw PA exceed $4 billion in lifetime online casino revenue, and there’s no reason why 2023 can’t see his level of performance sustained as the iGaming market goes from strength to strength.
The question that remains, of course, is whether this type of exponential and sustained revenue growth will inspire any other states to legalize online gambling in 2023?
Well, early forecasts suggest that iGaming legalization and expansion legislation will be considered in a small selection of states, namely New York, Indiana, Illinois and Iowa.
However, New York has already tried and failed on multiple occasions to legalize iGaming verticals, while any legislative attempts in Indiana and Iowa are likely to be met with strong opposition. So, this will be an interesting space to watch in the months ahead.
2. The Need for Established Payment Methods and Localised Financial Modules
Software development giant SOFTSWISS has recently surveyed a number of iGaming experts about their opinions on the most likely industry changes through 2023, with payments and licensing emerging as a key focal point.
In fact, some 60% of respondents and third-party experts named payments and licensing as the most crucial category in the iGaming space, particularly as more payment methods enter the marketplace and the importance of local regulation becomes increasingly apparent.
From a regulatory perspective, operators in mature iGaming markets will have to offer an abundance of safe and reputable payment options to players, while also adhering to local laws and restrictions. For example, operators in the UK are now prohibited from gambling using a credit card and have been since April 2020, whereas this payment method is permitted in the US, Ireland and Canada.
The widespread integration of Google Pay and Apple Pay will also encourage mobile players and sports bettors, while contributing to increased revenues across a broad range of operators.
Similarly, we expect to see a broader range of operators accept and embrace selected digital coins in 2023, even those who aren’t particularly invested or on-board with cryptocurrency. The goal here is obvious, as iGaming brands look to tap into a new and tech-savvy demographic of players while also creating new and bespoke bonus incentives.
First generation tokens like Bitcoin (BTC) and Ethereum (ETH) are among the most popular in the iGaming space, thanks to their availability, liquidity and the sheer number of casinos that now accept them as payment. However, third-generation blockchains also offer value, especially in terms of scalability and creating innovative iGaming experiences.
3. Creating Player-Centric Casinos and Business Models
Historically, iGaming brands have been underpinned by product-centric business models, with a particularly strong level of focus given the development of games, online verticals and their associated tech stacks.
However, this has begun to change of late, and 2023 will see more operators shift their focus to user-centric business models. This shift can partially be attributed to regulatory pressures and the need to identify and safeguard problem gamblers, but it also has much to do with optimising player satisfaction and engagement in an increasingly competitive global market.
A good example of this will see more investment made in customer services, in a bid to proactively solve player issues and prioritise customer retention. This will likely involve several different measures, including the development of more comprehensive FAQs, the integration of ChatGPT technology to improve interactions and an increase in the number of human customer support agents.
Another example involves the launch of increasingly sophisticated mobile and smartwatch casinos, which are responsively designed and able to replicate corporeal and desktop corporeal experiences to players who are on the move.
Of course, this shift in focus will require an adjustment of iGaming tech stacks and investment priorities, but it will undoubtedly mark a significant sea change in the market over the next 12 months and beyond.
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