Internet Gambling to Show More Growth than Land Establishments

by Hillary LaClair, Senior Editor

               Gaming consultant Marco Felice Baranzelli has released the results of his latest study in the global gambling market, which show that internet casino gambling will produce a higher average annual growth than that of land casinos by the year 2012.

                In 2007 internet gaming showed $328.5 in revenue as compared to the $309.6 billion in 2006. By 2008 online gambling represented a mere 4.8 percent of that total. However, the offline market is estimated to grow 2.2 percent per year until 2012, whereas internet gambling will show growth rates of 10.3 per year. The total revenue of internet gambling from now until 2012 is expected to reach $24.4 billion, 6.3 percent of the overall market (including online lotteries).

                Baranzelli explained the online gaming has shown a significant growth rate over the last few years, and is anticipated to continue this pattern over the next five years. Because there are no geographical boundaries to an online casino that is constantly accessible to users, the market will continue to grow rapidly.

                The study shows that the total online gaming revenue will increase 13.5 percent per year until 2012. More specifically, online poker will increase 16 percent per year, online casinos will increase 15 percent per year and online sports betting will increase 11 percent per year. Most internet gaming establishments are comprised of one of these three types of wagering, with sports betting as the largest segment, followed by online casinos and then online poker. This excludes skill games and internet lotteries.

                In 2007, the online sports betting market saw revenue of an estimated $4.8 billion, a 19 percent growth rate per year since 2007. Outside of the U.S., still the largest sports betting community in the world despite its legal difficulties, the sports betting market was an estimated $3.4 billion in U.S.. This shows a 17 percent increase from the year 2006. Of the 11 percent increase in global online sports betting over the next five years, Europe will see a 23 percent increase.

                The online casino market resulted in an estimated $3.2 billion in 2007, a 28 percent annual increase from the $.06 billion in the year 2000. While U.S. internet casino gambling has decreased 24.7 percent in 2007, Europe showed a strong 34.3 percent increase in 2007 from the year prior. Online casinos are expected to grow 15 percent per year from its current $1.9 billion in revenue to $3.8 billion in the year 2012.

                Online poker made an estimated $3.0 billion in 2007, a substantial 107 percent increased from the values reported in 2004. According to Baranzelli, online poker has grown more than any other type of online gambling. Europe showed a 38.4 percent increase in the year 2007, and is predicted to increase 47.9 percent in 2008.

                Baranzelli notes that the leading gambling websites have remained the same for several years, with only a few achieving a mass consumer base. Despite various anti-gaming legislations, leading websites have not changed. When the UIGEA was passed in 2006, the U.S. market made up nearly 50 percent of the global internet gaming market. By 2007, the U.S. market had diminished to 36 percent.

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