One of the most afflicted industries from the pandemic was entertainment. The prevention of travel and crowded environments, as well as the cancellation of many global sporting events, had a significant impact on the gambling industry. Brick-and-mortar gambling companies experienced decimated levels of revenue in 2020 due to lockdown restrictions. However, these events gave way to the rapid growth of the online gambling market—an emerging trend that is here to stay.
While the cancellation of sporting events played a massive component in online gambling activity, the effects were only short-lived. The online gambling space was quick to recover as people stuck from home were seeking out ways to keep themselves entertained—with online casinos driving activity. With many consumers having an increased amount of discretionary income, this led to online gambling performing extremely well in 2020. Many notable publicly traded companies who control market shares in the online gambling space, such as DraftKings, Penn National Gaming, and MGM Resorts, saw significant rises in share price following troughs in the first two quarters of 2020.
In a recent industry research report, the global online gambling market is expected to grow at a CAGR of around 7% in the next 5 years, reaching $67 billion in 2025. In a recent report from the American Gaming Association (AGA), analyst Chris Grove said: “Online betting in the U.S. is in the first chapter—maybe even just the foreword—in terms of the growth story.” Currently, 14 U.S. states have legalized mobile sports betting, with another 19 currently considering legislation in 2021. From the state government's perspective, gambling can serve as a method of generating tax revenue.
Some of the catalysts for the industry on a global scale include governments warming up to the legalization of gambling and the technological advancement of mobile gambling offerings. One area to keep an eye out for is the mass implementation of crypto-payment services. The use of blockchain technology, an immutable digital ledger, would enable online gambling sites to process transactions faster and ensure secure transfers of payment. This could further expedite the transition from retail to online should consumer confidence grow in safely using these online services.
It will be interesting to examine the long-term implications that online gambling has on the presence of retail gambling and it is certain that this industry is positioned to be a big player in the world of entertainment going forward.