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Last year was pretty good for gambling operators. This conclusion is confirmed by a large number of gambling providers. However this is already the history, and we are primarily interested in the future? What business climate will accompany the gambling business in 2017? What impact will have new trends in politics on it?

Online Gambling

In 2016, the global online gambling market grew by more than 9%, since more than 85 countries worldwide legalized online gambling. Online betting and online casinos account for 70% of revenues from the online gambling market. Games of chance on the Internet are extremely successful due to the wide range of games offered and the convenience of gambling without any restrictions. The key players on the online gambling market that generate revenue are China, the United Kingdom, Australia, the United States, France, Germany, and Italy.

The global online gambling market will probably exceed 60 million dollars in 2020.

Consolidation of the Online Gambling Market

The development of online gambling in recent years has been determined by the fact that the emergence of the online gambling market has not yet reached its maximum, however, it is very close to this maximum. This led to some takeovers and mergers of gambling companies. Some of them occurred due to strategic reasons, while the others, for example, the absorption of Bwin, took place because companies simply cannot compete successfully with bigger organization. In the future, the development of technology and changes in consumer preferences will surely result in an increase in the level of competition on the market.

According to the Financial Times, William Hill is currently struggling to find a new CEO. Last year, there were trilateral talks about the merger between Rank Group and 888, but the deal did not occur. If this had happened, Playtech would have lost one of its biggest customers. Nevertheless, if the three-way merger of William Hill, Rank, and 888 failed, perhaps it would be done with Playtech! Experts predict that the merger of William Hill, 888 and Playtech or any two companies from this list is very likely in 2017.

New Technologies for Gambling Industry

New technologies continue to have a strong impact on markets. Mobile gambling will continue to grow and develop beyond any doubt. However this growth, associated with the increase in the speed of mobile data transmission, is possible only for new and better products. As for users, these changes should not be particularly noticeable for them. Probably, improvements will occur against the background of traditional dynamics.

Technologies of virtual and augmented realities can also offer some surprises. We can assume that in the near future slots and other games of chance will become as vivid and impressive as never before thanks to the development of Microsoft HoloLens, Playstation VR, and HTC Vive.

Bitcoin

Last year, the UK Gambling Commission decided that Bitcoin could be used as a legitimate payment tool for online gambling in the United Kingdom. Famous operators from all over the world are also beginning to use bitcoins. Experts believe that we will see a surge in the popularity of bitcoins on the Internet in 2017. And this happens not only because it is convenient but also because the use of bitcoins will allow reaching a greater transparency. After all, every financial transaction, each spin of the roulette wheel and each roll of dice are documented in the blockchain. These data cannot be hacked, replaced, or faked, and at the same time they are available for everyone. Any gambler will be able to find out whether the gambling house is honest and integral or not. It is believed that we are at the beginning of the era of transparency, in which the blockchain technology will change the whole world. Its importance can be compared with the spread of the Internet or smartphones, without which our life is now difficult to imagine.

Security Is a Huge Problem

Taking into account the development of new technologies and their influence, security issues are considered to be vital for online gambling companies. Recently, DDoS attacks on gambling resources have become popular. Last year, online bookmakers suffered significantly from them. It turned out that even such giants as William Hill were not protected from such attacks. In the autumn of last year, the services of the British operator operated intermittently for two days. Given that WillHill earns 5.4 million dollars per day, losses from hacker attacks can be considered to be very serious. Therefore, the investment of gambling operators in security will be huge in 2017.

Growth of the Number of Gamblers among Females

In 2015, the trend for increasing the number of female gamblers was formed. Last year it gained momentum, and in 2017, the growth is expected to continue. Studies show that females prefer to gamble privately on their personal electronic devices, where they can play confidently without being afraid of the mockery of male gamblers. And women under the age of 35 are much more active in gambling than women whose age exceeds 35 years.

Online casinos for females have begun to appear. The first of such gambling houses Cameo Casino with the motto "made by women for women" was opened in 2015. Although Cameo Casino was not successful and closed its doors without having worked even two years, nevertheless, the market was ready for such a novelty and the idea was immediately picked up by others: 888Ladies, Pink Casino, Maria Casino. These operators use special advertising campaigns, which are intended for females only.

Expansion of Credit and Debit Cards

The biggest problem of online gambling is differences in the legislations of various countries. Although some countries allow land-based casinos, as they contribute to the development of tourism, they have an extremely negative attitude towards online gambling. Examples include such countries as South Korea, Japan, Portugal, and Norway. However online gambling cannot be completely banned, because users can easily get access to foreign websites via proxy and freely play games of chance using international credit or debit cards.

The governments of countries do not take serious measures to ban these websites for two reasons:

  1. They assume that people who participate in such activities are sufficiently educated and aware of the consequences, or are financially secured, so that the losses cannot cause significant damage to them from the financial point of view.
  2. The second reason is that the complete ban of foreign gambling resources will force advertisers not to place their advertisement on national websites, which leads to loss of revenue.

Changes in Consumer Habits

One of the key trends in the gambling industry is the growth of the market of social and mobile gambling. The increase in the number of users of mobile devices has accelerated the growth of online gambling and betting market. Social games that earn money on monetization in social networks are currently one of the main directions in gambling popular among players.

Now there is a significant change in the behavior of consumers on the global online gambling market. The increased popularity of social gambling applications is the main factor that is expected to contribute to the market growth. Developers of gambling software follow the trend and invest in the development of innovative social games of chance for mobile devices. The number of people participating in the social gambling business is growing, since they are motivated to "compete with friends." Other reasons for the growth in the number of social gamers are:

  • Communication and interaction with the help of games,
  • User-friendly gameplay,
  • Numerous tournaments.

In addition, the more frequent use of the F2P (Free to Play) model in social games will also stimulate the market growth. This model does not generate revenue directly, because it does not charge participation fees. Instead, the revenue is generated via the sales of virtual goods, which open access to more opportunities or provide an advantage over competitors.

Offline Gambling

Which factors affect the gambling business? The list of such factors includes:

  • Politics (regulation, political climate).
  • Business climate (market size, market growth, etc.).
  • Trends (demand for existing and new products and technologies).

The first two factors are supposed to be especially important in 2017.

Macau

The gambling business of Macau reached the bottom and began to grow last year. A steady increase in casino revenues is predicted for Macau in 2017. Although there may be unpleasant surprises. For example, Donald Trump said some provocative things about the U.S. trade with China during his election campaign. And even more, he angered Beijing when he received a phone call from Taiwan. The US-China relationship cannot be called friendly, so it is likely that Beijing will want to revenge Trump by taking action against American investments in Macau that belong to Trump's friends Sheldon Adelson and Steve Wynn.

The slowdown in China's economic growth rate is unlikely to affect outbound tourism, since the country moves to an economy based on consumption growth, unlike resource-based and industry-based economy. The fast-growing middle class and growth of wages in China will stimulate gambling revenues in the region and positively affect the development of casinos in nearby countries: Vietnam, Malaysia, Russia, the Philippines, and, of course, Macau.

More than 55% of Macau casino revenues were received from VIP gamblers last year, despite the fact that their number was only about 100,000 people compared to 30 million annual visitors of Macau. In the future, this figure should decrease, since government regulations aim at combating the illegal gambling of high-rollers and diversification of revenues via the development of the resort infrastructure.

USA

The best chance for the legalization of sports betting in the United States in 2017 would have been if Donald Trump had become the president. Well, he won the elections, now we need to wait and see.

Donald Trump has been the owner of the legendary Taj Mahal Casino in Atlantic City for many years. There are several representatives of the American gambling business in the team of his consultants. However they don't support online casinos. One of them is Sheldon Adelson, who is the owner of Las Vegas Sands Corporation. His fortune is estimated at $31 billion. So, he is a heavyweight gambling tycoon. He donated several tens of millions of dollars for the Trump's election campaign, and he does not support online gambling at all.

In addition, Steve Wynn, Phil Ruffin, and Carl Icahn are influential advisors of the president. Phil Ruffin, who is the owner of the Treasure Island Casino in Las Vegas, is Trump's personal friend. Steve Wynn owns several casinos in Las Vegas and Macau.

Karl Icahn is probably the most famous American raider. He purchased numerous companies, quickly increased their cost in various ways (job slashing, mergers, etc.), and then resold them with profit.

Icahn is Trump's special advisor on issues of regulations, including gambling. One of its companies is the Tropicana Group, which owns Tropicana Casino in Atlantic City and operates Trump Taj Mahal Casino in Atlantic City. Carl Icahn is probably the most important gambling advisor: if he decides that he can make money on online gambling, Americans have good chances to observe the legalization of online gambling in the nearest future.

It is difficult to predict the outcome of this confrontation between the Donald Trump's advisors, but anyway the trend towards the legalization of online gambling in the United States in 2017 will be significant.

Germany, Japan, India, Brazil

Each of these four countries seems to a very important market in its region, and all four governments are considering the possibility of legalizing or liberalizing their gambling legislations in 2017. Four countries have a total population of 1.7 billion people, which is very important for the development of the market.

The fast-growing middle class in India and the huge number of gamblers in Brazil, as well as the high level of per capita income in Germany and Japan encourage the emergence of gambling industry. Terms and conditions of licensing and taxation in the newly adopted legislations of these countries will be very important. If all four countries open their gambling markets, it will be like a new Klondike for the gambling industry.

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