2014

The Future of Digital Gambling: The impact of regulation, the rise of online services and the evolving competitive environment

NEW YORK, July 7 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

The Future of Digital Gambling: The impact of regulation, the rise of online services and the evolving competitive environment

http://www.reportlinker.com/p0186705/The-Future-of-Digital-Gambling-The-impact-of-regulation-the-rise-of-online-services-and-the-evolving-competitive-environment.html?d=CPDAIN20

The digital gambling market – encompassing online, mobile and digital TV-based services – continues to grow, accounting for an increasing proportion over overall gaming revenues. The current state of the global economy is placing significant pressure on gambling industry revenue potential, prompting many providers to deliver innovative services to boost both awareness and customer loyalty. Furthermore, strict regulation with regards to the provision of online services will continue to restrict market potential.

Competition is fierce across the industry, with operators investing heavily in their platforms to deliver compelling services to their consumers. With operational scale vital, M&A activity will be ongoing, while acquiring (and retaining) customers will continue to be the key strategic focus for most operators. In addition, operators will increasingly seek to exploit wider opportunities across the digital gambling space, including the development of mobile and digital gambling services.

This report examines developments across the rapidly evolving digital gambling sector. It underlines the challenges facing companies operating across this space, considers the potential opportunities available, provides market sizing and forecasting by sector and geography, and provides actionable insight with regards how to best approach this fast-changing market.

Key features of this report

- Overview of the industry trends, technological evolution and changing business models that have driven development of the digital gambling market.

- Gambling market revenue forecasts to 2013 (including conditional pre- and post-UIGEA forecasts), covering the overall gambling market by region and product type, with breakdowns for online, mobile and digital TV services.

- Market projections for related communications and entertainment products and services including consumer broadband, mobile telephony and smartphone shipments.

- Identification of the key challenges facing the key participants targeting digital gambling opportunities, including actionable insight into how to best approach this rapidly evolving opportunity.

Scope of this report

- Gain a comprehensive understanding of how market trends are impacting on the potential of digital gambling services, and the impact such developments will have on operator business models and strategies.

- Understand how the competitive environment is changing, specifically how regulatory issues continue to disrupt industry progress and market consolidation is on the cards.

- Quantify the digital gambling market opportunity, gaining an insight into the revenue potential of online, mobile and digital TV gambling services.

Key Market Issues

- A combination of technological and societal developments have boosted the potential of the online gambling sector, with growth in this sector of the market now outstripping that of the overall (e.g. retail + digital) gambling market. Broadband proliferation has enabled the rollout of real-time gambling, seen by many across the gambling sector as one of the most significant sources of potential online revenue growth over the coming years.

- Regulation of the EU and US online gaming markets is seen as the key issue facing the industry; the laws governing online gambling will determine the future growth potential of the market more than any other factor. The regulatory framework within each jurisdiction is constantly evolving; while some countries have moved towards explicitly allowing legalized online gambling operations, others, have moved in the opposite direction.

- Despite continuing consumer demand for digital gambling services, the global economic slowdown is likely to have a negative impact on market growth over the next 2-3 years.

- Scale is essential in the online gambling sector, with larger firms able to provide both a broader range of services and higher prize funds to attract customers. A core aim of most major online operators is to build strong presence across all gambling verticals; betting, poker, casino and, increasingly, bingo. Acquiring expertise beyond areas of core competence is a key driver of M&A activity.

Key findings from this report

- The introduction of UIGEA in 2006 was a hammer blow to the fortunes of the online gambling sector; an estimated $4 billion was wiped from online gambling share prices almost overnight, while major public online gambling firms were forced to abandon their US-facing operations.

- The US is under pressure from various angles to ease its anti-gambling stance. However, even if the US market becomes regulated, there are no clear indications with regards to whether overseas operators will be able to offer services.

- Many online gambling firms are placing particular attention in delivering services which appeal to women in order to exploit opportunities across the huge potential market.

- Live (or in-play) betting is the key growth driver for the sector, enabling punters to bet on events in real-time as they progress. To develop a more compelling live betting offering, operators are investing heavily in sports broadcast rights.

Key questions answered

- What are the major trends shaping development of the digital gambling market?

- Which factors are likely to restrict the potential of digital gambling services and why?

- To what extent is regulation holding back market progress?

- Which operators are best placed to exploit emerging market opportunities?

- How will the market for digital gambling services evolve, and which future trends will impact on developments over the course of the next 2-3 years?

- How important will digital services be to the overall gambling revenue mix by 2013?

Companies mentioned

888 Holdings , Bet365 , Betfair , Bwin , Full Tilt Poker , Ladbrokes , Mangas Gaming , Paddy Power , PartyGaming , PokerStars , Sportingbet , Unibet , William Hill

Table of Contents

The Future of Digital Gambling

Executive summary 10

Market context: an uncertain future 10

Competitor strategies: the rise of online services 11

Leading players: strategic overview 12

The future of digital gambling 13

Chapter 1 Introduction 16

Introduction 16

Who is this report for? 16

Definitions 17

Digital gambling 17

Gross gaming revenue 17

UIGEA 17

Convergence 17

Digital pay-TV (DTV) 17

Internet Protocol TV (IPTV) 17

Online gambling 18

Social networking 18

Chapter 2 Market context: an uncertain future 20

Summary 20

Introduction 21

Defining the digital gambling market 21

Digital gambling market drivers 25

Online services drive industry growth 26

Broadband market development drives online gambling opportunities 27

Higher speeds bring new opportunities 31

Online is the key area of focus for operators 32

Regulatory uncertainty restricts progress 33

Regulation and legislation provides significant challenges 33

UIGEA has had a profound impact 34

A regulated US online gambling market on the cards? 37

Intrastate online gambling services set to emerge 38

The European regulatory environment remains uncertain 41

Asia-Pacific will remain a challenging market for overseas operators 49

A more open and regulated sector will develop 50

Global economic conditions provide cause for concern 51

Problem gaming and match-fixing scandals remain major issues 53

Age verification requires greater focus 54

Chapter 3 Competitor strategies: the rise of online services 56

Summary 56

Introduction 57

Competition comes from multiple angles 57

Monopoly operators retain a strong position 57

The importance of scale 58

Mergers and acquisition activity gather pace 59

Customer acquisition and retention strategies remain pivotal 60

Promotion activities focus on building brand awareness 60

Customer retention is just as vital as attracting new users 63

Attracting new demographic groups should be a key focus 65

Online gambling service evolution 69

Betting industry developments 69

Live betting comes to the fore 70

Betting exchanges offer consumers more options than ever before 71

Events betting offers strong growth potential 75

European online poker operators struggle against US competitors 75

Cross-selling opportunities 76

A changing strategic focus? 76

Poker networks will continue to play a pivotal role 77

Beyond the online market 79

Mobile opportunities increase 79

Rising 3G penetration boosts demand for mobile applications 80

Device evolution boosts mobile content potential 83

Major hurdles remain 85

Digital TV services offer strong potential 86

Chapter 4 Leading players: strategic overview 90

Summary 90

Introduction 92

Bwin 93

Company overview 93

Recent developments 94

Portuguese ECJ setback could be a sign of things to come 94

Betting services remain a core area of focus 94

Acquisitions add greater poker expertise 95

Financial performance 95

Betfair 98

Company overview 98

Recent developments 99

Betting exchange debate continues to rage 99

Acquisitions offer new scope and potential 100

Financial performance 100

PartyGaming 102

Company overview 102

Recent developments 103

Settlement with US authorities wipes the slate clean 103

Cashcade acquisition offers a strong foundation for bingo success 103

B2B opportunities increase 103

Financial performance 104

William Hill 108

Company overview 108

Recent developments 109

Playtech deal significantly boosts online presence 109

Offshore move could save pounds Sterling10m per year 109

Financial performance 110

Sportingbet 112

Company overview 112

Recent developments 113

Optimism surrounding non-European operations 113

Football sponsorship builds brand awareness 113

Financial performance 114

Ladbrokes 116

Company overview 116

Recent developments 117

Offshore move brings financial benefits 117

New sportsbook brings enhanced functionality 117

Italian online service gathers pace 117

Financial performance 118

888 Holdings 121

Company overview 121

Recent developments 122

B2B activities provide strong potential 122

Acquisitions deliver a strong position in the fast-growing online bingo market 123

Financial performance 123

Unibet 126

Company overview 126

Recent developments 127

Acquisitions boost product coverage 127

Initial incursion into the B2B market 127

Financial performance 127

Paddy Power 130

Company overview 130

Recent developments 131

PMU partnership provides a strong B2B foundation 131

Australian investments broaden geographic reach 131

Financial performance 131

Significant privately-held operators 134

Bet365 134

Mangas Gaming 134

Chapter 5 The future of digital gambling 138

Summary 138

Introduction 139

Future digital gambling market trends 139

Regulatory obstacles will remain, with B2B services becoming paramount 139

Media firms will play an increasingly significant role 140

Innovative services needed to boost uptake 140

Mobile and digital TV services will be the next major growth area 142

Social networking offers potential 142

Online services drive gambling market growth 143

Asia offers strong growth potential 145

Digital services will generate 10% of overall gambling revenue by 2013 145

Europe will continue to lead the way in the online gambling arena 148

Betting will continue to account for the largest share of online revenues 150

US regulation could provide a $6.8bn boost to the online market 152

Index 156

List of Figures

Figure 2.1: Global consumer Internet subscribers (000s), 2007-2012 28

Figure 2.2: Consumer Internet subscribers by region (000s), 2008 29

Figure 2.3: Internet subscribers by region (000s), 2012 30

Figure 2.4: Share prices hit hard by UIGEA (% change since December 2005) 36

Figure 3.5: Football shirt sponsorships becomes a key marketing tool 62

Figure 3.6: Demographic comparison of gambling sites users: age 67

Figure 3.7: Demographic comparison of gambling sites users: gender 68

Figure 3.8: Share of online betting traffic referred by Oddschecker.com by provider (%), August 2009January 2010 73

Figure 3.9: 3G share of worldwide mobile phone subscriptions & revenues (%), 2005-2013 81

Figure 3.10: Worldwide mobile connections and revenues, 2007-2013 82

Figure 3.11: Smartphone shipments by region (000s), 2008-2014 83

Figure 4.12: Bwin revenue by sector (euro 000s), 2005-2008 96

Figure 4.13: Bwin revenues, regional share (%), 2005-2008 97

Figure 4.14: Betfair financials (pounds Sterling 000s), 2005-2009 101

Figure 4.15: PartyGaming revenue by sector ($m), 2005-2009 106

Figure 4.16: PartyGaming revenue sector share (%), 2005-2009 107

Figure 4.17: William Hill revenue by sector (pounds Sterling m), 2004-2009 111

Figure 4.18: Sportingbet revenue by sector (pounds Sterling m), 2007-2009 114

Figure 4.19: Sportingbet revenue regional share (%), 2007-2009 115

Figure 4.20: Ladbrokes net revenue by sector (pounds Sterling m), 2003-2009 119

Figure 4.21: Ladbrokes online revenue sector share (%), 2007-2009 120

Figure 4.22: 888 Holdings revenues by sector ($m), 2004-2009 124

Figure 4.23: 888 Holdings revenues, regional share (%), 2004-2008 125

Figure 4.24: Unibet revenue by sector (pounds Sterling m), 2005-2009 128

Figure 4.25: Unibet revenue regional share, 2005-2009 129

Figure 4.26: Paddy Power revenue by sector (euro m), 2004-2009 132

Figure 5.27: Worldwide gambling market by region ($bn), 2008-2013 144

Figure 5.28: Worldwide gambling market by sub-sector ($bn), 2008-2013 146

Figure 5.29: Worldwide digital gambling market by sub-sector ($bn), 2008-2013 147

Figure 5.30: Worldwide online gambling market by region ($bn), 2008-2013 149

Figure 5.31: Worldwide online gambling market by gambling type ($bn), 2008-2013 151

Figure 5.32: Worldwide digital gambling market ($bn), 2008-2013: the impact of potential future US market regulation 153

List of Tables

Table 2.1: Global consumer Internet subscribers (000s), 2007-2012 28

Table 2.2: Consumer Internet subscribers by region (000s), 2008 29

Table 2.3: Forecast consumer Internet subscribers by region (000s), 2012 31

Table 2.4: Share prices hit hard by UIGEA (% change since December 2005) 36

Table 3.5: Share of online betting traffic referred by Oddschecker.com by provider (%), August 2009January 2010 74

Table 3.6: 3G share of worldwide mobile phone subscriptions & revenues (%), 2004-13 81

Table 3.7: Worldwide mobile connections and revenues, 2007-2013 82

Table 3.8: Worldwide smartphone shipments by region (m), 2008-2014 84

Table 4.9: Leading digital gambling operators by revenue ($m) 92

Table 4.10: Bwin snapshot 93

Table 4.11: Bwin revenue by sector (euro 000s), 2005-2008 96

Table 4.12: Betfair snapshot 98

Table 4.13: Betfair financials (pounds Sterling 000s), 2005-2009 101

Table 4.14: PartyGaming snapshot 102

Table 4.15: PartyGaming revenue by sector ($m), 2005-2009 106

Table 4.16: William Hill snapshot 108

Table 4.17: William Hill revenue by sector (pounds Sterling m), 2004-2009 111

Table 4.18: Sportingbet snapshot 112

Table 4.19: Sportingbet revenue by sector (pounds Sterling m), 2007-2009 115

Table 4.20: Ladbrokes snapshot 116

Table 4.21: Ladbrokes revenue by sector, 2003-2009 119

Table 4.22: 888 Holdings snapshot 121

Table 4.23: 888 Holdings revenues by sector ($m), 2004-2009 124

Table 4.24: 888 Holdings revenues, regional share (%), 2004-2008 125

Table 4.25: Unibet snapshot 126

Table 4.26: Unibet revenue by sector (pounds Sterling m), 2005-2009 128

Table 4.27: Paddy Power snapshot 130

Table 4.28: Paddy Power revenue by sector (euro m), 2004-2009 132

Table 5.29: Worldwide gambling market by region ($bn), 2008-2013 144

Table 5.30: Worldwide gambling market by sub-sector ($bn), 2008-2013 146

Table 5.31: Worldwide digital gambling market by sub-sector ($bn), 2008-2013 148

Table 5.32: Worldwide online gambling market by region ($bn), 2008-2013 149

Table 5.33: Worldwide online gambling market by gambling type ($bn), 2008-2013 151

Table 5.34: Worldwide digital gambling market ($bn), 2008-2013: the impact of potential future US market regulation 153

To order this report:

Gambling Industry: The Future of Digital Gambling: The impact of regulation, the rise of online services and the evolving competitive environment

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