European online gambling and betting is a successful and dynamic sector, representing almost half of the worldwide market. In Europe, the online market is slightly more than 17% of the total gambling market, leaving land-based operators the majority share of 83% of the European market.1

 

 

Global leadership of the European industry but for how long?

graph 1

The European market is today the largest market for online gambling worldwide. Of the €34.6bn of online gaming gross win (stakes minus winnings) generated globally in 2015, more than 47.6% per cent was attributable to the EU market. This leadership comes from the innovative character of European operators, the high internet penetration in Europe and a lack of regulatory opportunities in the US and Asia to build similar industries. But Europe’s leadership is uncertain due to the increasing fragmentation of the EU market along national ‘boarders’ and economic protectionism.

 

A growing sector in Europe

Being a relatively young and new market, the online gambling sector in Europe is still developing, albeit slower due to the increasing regulatory pressure. Online gambling’s Gross Gaming Revenue (GGR – stakes minus winnings) is expected to rise from €16.5 billion in 2015 to €24.9 billion in 2020.

Betting is the most popular European online gambling product at 37% of the market, whilst online poker and casinos make up respectively 24% and 12%.

graph 2

 

Only a minor share of gaming is performed online

The European online gambling sector accounted for 17.5% of the total European gambling market in 2015. Independent forecasts expect online gambling’s market share to steadily rise to 22% in 2020. However, the revenue of the offline market is also predicted to increase from €77.7 billion in 2015 to €84.3 billion in 2020, meaning that the growth of the online market is not to the detriment of the offline market and its traditional providers.

 

Different customer and product profiles

graph 3

Revenues generated by traditional land based operators stem from long-established products, such as those found in physical betting shops, casinos and bingo halls, and offerings like scratch cards and lottery tickets. Online gambling offers a wide variety of products, often found on one integrated site where consumers can place a bet on the outcome of a basketball game, or play poker. There is also a very low substitution level between the online and traditional land based sector because of the different player profiles.

 

A growing sector profitable to both private and monopoly operators

Traditional lottery operators also offer consumers the opportunity to participate in online lotteries and increasingly also include e-betting and e-poker in their ever extended offer. Today these monopolies account for more than 20% of the European online gambling market, with the proportion being much higher in Northern Europe than in Southern and Eastern Europe.

 

Conclusion

  • The online gambling sector is a young and vibrant sector of the digital economy, and one of the few digital fields led by European companies.
  • • The traditional land based operators and monopolies continue to expend their offline revenue while also rapidly expanding their online offer.

1 H2 Gambling Capital, May 2016

 

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