While the sports betting industry has existed for centuries, the last few decades have seen the online betting landscape change dramatically, with new entrants pushing the industry forward, innovating, and evolving with the times. The industry is now valued at over $150 billion annually, and the figures continue to grow – in 2018, global sports betting revenue was estimated to be $178.5 billion.
But just how big is the industry, and how does it compare to other traditional and emerging gambling markets? We take a look at the four major markets – sports betting, lottery, poker, and cryptocurrency – to gain a better understanding of the scope and size of the industry, and how it compares to other gambling markets.
Sports Betting
While traditional sports betting has existed for centuries, the last few decades have seen the industry expand exponentially, facilitated by technology and innovation, as well as a rise in competitive sports betting markets, propelled by expanding worldwide internet access and the expansion of sports betting franchises across the globe.
From a small market worth a few million in the 1970s to multi-billion dollar industries today, the growth of the industry has been nothing short of incredible. According to the International Council on Sport and Leisure (ISL), the global sports betting market was valued at around $30 billion in the 1980s, rising to around $150 billion in the 2010s. The industry’s popularity and growth is exemplified by the rise of eSports, with global audiences of over 200 million watching competitive games like League of Legends and Counter-Strike: Global Offensive. And whereas traditional sports betting took places in the arena and at the betting window, today’s audiences can place bets from the comfort of their homes, using various betting apps and websites.
Lottery
Lottery is another market that has seen exponential growth in recent years, facilitated by cutting-edge technology and innovative businesses, such as Lottoland, which allows users to play scratchcards for cash. Originating from Australia and South Africa, scratchcards have been around for decades, but gained popularity across the globe in the 2010s, especially in Europe and Asia, where jackpots often exceed $1 million. It is estimated that the lottery market is worth over $50 billion annually, and is growing rapidly – in 2018, the industry in the UK alone is estimated to be worth around £5.7 billion.
Lottery is one of the most popular and established gambling markets, alongside sports betting and casino games in general. The odds of winning are determined by complex mathematical formulas based on a variety of factors, such as the number of players, the type of game, and the area. This makes it more addictive and exciting for players, as well as those betting on the games – with jackpots regularly exceeding $1 million, it’s easy to understand why.
Poker
Although there is no exact figure available, it is estimated that between one and two billion people play poker around the world at some point in their lives. The game’s popularity stemmed from its simplicity, with no downloads, no complicated rules, and no chance of losing more than you bet. This made it accessible to a far wider audience than previously allowed, and as the internet grew and people sought new ways to stay connected, so too did poker. Today, the game is available virtually anywhere in the world, in one form or another, and its popularity continues to grow, evident by the rise of esports, with thousands of people gaming around the world for championship pots of up to $25,000.
The odds of winning poker hands are always in your favor – the player with the highest ranking hand wins – so for every hand you play, you have a chance of winning. This encourages users to keep playing, even when they’re losing, which can result in serious financial losses for the players. While the winnings from poker seem relatively small in comparison to other gambling markets, its rapid growth makes it one of the most popular gambling games, if not the most popular. And with the industry worth billions every year, the profitability is there for the taking.
Cryptocurrency
Finally, let’s not forget about cryptocurrency, which has experienced exponential growth in recent years. It’s a virtual currency that is completely decentralized, relying on users’ computing power to keep the network secure and ensure the value is always retained. It’s a great way to gamble, as the price is always determined by supply and demand, with no one controlling or influencing the value. The anonymity it provides allows users to bet beyond traditional geographical boundaries, meaning it appeals to a far wider audience than previous generations of digital nomads would have dreamed off – anyone, anywhere, anytime, can become a player, and there’s no restriction on how many accounts a person can have. Its popularity grew largely due to the 2017 crypto-boom, with the value of all cryptocurrencies increasing by over 1,600% in that year alone.
The figures for the overall industry are impressive – as we’ve established, the global sports betting market is valued at around $150 billion annually, while the European Union’s gambling market, for example, is valued at around €30 billion. Despite the industry’s popularity, particularly in esports and poker, there are still substantial barriers to entry, which can prevent certain individuals and groups from participating. Taxes, for example, are a major issue, with many governments, including those in Europe, taking a dim view of online gambling – the UK, for example, has strict regulations around betting, including a ban on sports betting outside of the country’s regulated sportsbooks.
But just how big is the sports betting industry? The answer to that question depends on which country you are in, as some countries allow virtually unlimited sportsbetting, while others have very restricted regulations around the subject. Nevertheless, even within those borders, the industry can vary from region to region. For example, while Australia has an overall competitive landscape, with over a dozen bookmakers available to consumers, the same cannot be said for New Zealand – its largest bookmaker, Sportsbet, only allows bets on a select number of sporting events, effectively limiting consumer choice and the value of the market in general. In 2018, it was estimated that there were around 7.6 million active registered sportsbetting accounts in Australia, while in New Zealand there were only around 140,000 registered sportsbetting accounts. So while Australia has an extremely competitive sports betting market, with 12 bookmakers to choose from, New Zealanders have very limited options, with just one company, Sportsbet, providing fixed odds betting and a handful of regional operators handling other sports.
The Future of Sports Betting
Looking ahead, what can we expect from the sports betting industry in the coming years? First and foremost, the industry will continue to grow, with no signs of that expanding market share drying up any time soon. According to the International Council on Sport and Leisure, while in the UK, for example, the total value of wagering in 2018 was £6.45 billion, with around 13.9 million active registered sportsbetting accounts; in Germany, the figure was £6.2 billion, with around 24.9 million accounts; and in Spain, it was €5.45 billion, with around 19.3 million accounts. And these are just three of the biggest European markets – in all, 27 European countries now allow some form of sportsbetting, with Denmark, Sweden, and Switzerland as the biggest European sportsbetting markets.
As for the UK, the country’s gambling association, the UK Gambling Authority, stated in July 2019 that online gambling had an overall effect of £6.45 billion on society in 2018, with £5.94 billion falling into this category:
- Winnings from sports betting
- Bets placed on fixed-odds betting and betting exchanges
- Fees from poker
- Operator and management fees from casinos
- Lost revenue from lotteries and greyhound races
- Profit from illegal gambling operations
- Other
- TOTAL
Of that figure, £5.94 billion was attributed to sportsbetting, with £1.45 billion falling into the other gambling categories. While it’s safe to assume this will continue to be the case in the near future, it is also important to note that these numbers could fluctuate significantly, based on a variety of factors, such as football and cricket seasons, as well as other sporting events, such as horse-racing and other forms of racing, which could see new gambling markets emerge – and indeed, already have, with a virtual world, Second Life, now offering betting options for its residents.