In recent years, the gaming industry experts are observing with interest the battle between online and offline casinos. They explore features, trends and factors having the greatest effect, make plans and forecasts. Slotegrator's experts have carried out their own analytical study and come to interesting conclusions.
Growth and Drop
The 2015 results defined the growth in incomes of online casinos and the drop in incomes of land-based casinos.
According to statistical studies of the Center for Gaming Research at the University of Nevada, only within six month (the end of 2014 to the beginning of 2015), revenues of land-based gambling houses fell by 2.17%. The total drop in revenue amounted to 11.5% in 2015; in financial terms it is as follows: from € 132.9 billion to € 117.7 billion or $ 149 billion and $ 132 billion respectively.
However, in spite of everything, this segment still holds a leading position in the global offline gambling market.
The Revenue structure of the global offline gaming business, according to research company RUB90.
The proportion of online gambling in the total income of the global gaming market continues to grow. In 2014, it was 6%; in 2007, it was already 8.8%, while in 2015, this figure rose to 9.6%. This is a very significant growth rate, indicating that the industry is now experiencing a real boom.
The Revenue structure of the global online gaming business, according to research company RUB90.
However, as we can see, the online casino revenues in relation to the land casino revenues are still not very large. In 2015, despite the drop, the land-based casinos brought their owners almost € 118 billion; the online casino, despite the growth, provided only € 7.8 billion.
What influences the growth of land-based and online casinos?
It is a surprising fact, but GBGTS experts predict that online gambling is unlikely to break through 10% mark in the total share of gambling revenues.
Why is it so? As Slotegrator experts note, the market of online casinos is modern, fast growing and technologically oriented. Its growth is primarily influenced by the development of modern IT. However, virtual platforms will never outperform land-based gambling houses, the growth of which occurs due to the development of new gambling areas with large casinos such as Macau, Singapore, the Philippines and others. Over the past 10 years, incomes of Asian land-based casinos rose from $ 7.7 billion to $ 56.6 billion, i.e. almost by 7.5 times. Despite the slight decline in 2014-2015, the experts predict growth this year.
Online casinos are far ahead of their land-based counterparts in terms of the number of players due to the huge Internet audience and the availability of playgrounds. However, the bets on the Internet are incomparably lower than in land-based casinos. For example, a minimum bet in the online casino roulette is $ 1, and in land-based casino one - $ 5-10. In general, online slots can be played at $ 0.01 per spin.
The scope of online casinos is very attractive for investors and players. It is less risky, more comfortable and brings the same level of enjoyment. Therefore, taking into account the development of Internet and mobile technologies, the online gambling will continue to grow.
In 2015, the land-based casinos income amounted to about $ 132 billion, according to the data provided by PricewaterhouseCoopers (PwC). In 2017, their net profit will reach $ 182.5 billion. According to PwC experts, the income of land gambling establishments will increase by 9.3 % per year.
The major markets ensuring stable growth include the Asia-Pacific region, which grows at a rate of 18.3% per year and exceeds US gambling establishments in terms of land-based casino revenues, as well as Europe, Middle East and Latin America. According to Global Gaming Outlook by PwC, by the end of 2015, the Asian market revenues amounted to about $ 79.3 billion; US - $ 73.3 billion; Europe, Middle East and Africa - $ 18.3 billion; Latin America - $ 5.6 billion.
The online casinos revenues are also growing at an incredible pace. According to H2 Gambling Capital, the net revenue of online gambling in 2010 was $ 6.24 billion and by the end of 2014 - $ 8.7 billion; Slotegrator experts predict that by 2017 this figure will increase to $ 18 billion. Such rapid growth is also supported by the data of France Press agency, which states that the online casino revenues increased by 28% only within the period of 2010 to 2014.
Revenue forecast for online and offline casinos in USD billion.
Expenses of land-based casinos are quite substantial. They mainly consist of costs for the maintenance of establishments: gambling halls, equipment, facilities, payments for services of personnel and fairly high taxes.
Online casinos expenses are much lower, but still substantial. The key ones include the cost of site creation and optimization, licensing, gaming platform and content.
It is also necessary to remember that the success of any institution depends on the advertising. Therefore, sums spent on marketing campaigns can be very impressive.
Online and Land-based Casinos Visitors
Casinos are considered to be the individual pastime for visitors. People come to a land-based or online gambling establishment not to find the noisy company and not to communicate actively. It is important for them to be able to fully escape from everyday worries and thoughts and immerse in the game.
Players of land-based and online casinos have different motivation. Let us consider the motivation of land-based casino players. The attendance of a gambling establishment is a way to emphasize one’s status and wealth. Someone is attracted by the atmosphere, free food, drinks, twilight, beautiful women, a sense of excitement, and friendly staff. The motivation of players of online casinos is as follows: to spend free time in a comfortable environment without having to go somewhere.
Visitors of land-based casinos are mostly people who are quite respectable and have a stable income and an established social status. However, under the influence of modern tendencies of the time, this audience has been gradually changed by demographic characteristics. Previously, a classic player was a middle-aged man; today, about 40% of casino visitors are women aged about 45 years. About 30% of all offline players are people aged 51-65 years.
The audience of online casinos is vast, diverse and considerably younger. They are men and women aged 18 years and older of different levels of wealth and status in society. This is due, primarily, to the fact that many online casinos make it possible to play for free or making minimal bets in order to attract and retain high-traffic. As a result, according to the statistics, a huge part of the audience consists of fans who like to bet in their leisure or work time. The emergence of mobile versions of casinos allowing you to play "on the go" has expanded this audience segment. The game brings such people the psychological satisfaction. They usually do not want to spend substantial sums of money on their hobby.
A separate category of target audience involves professional players who are available both in land-based and online institutions. These people benefit from the game. They usually do not need additional sources of income in order to secure a decent standard of living. They rarely fly into passion; their game consists of numbers and rehearsed actions. However, their percentage in the total mass of visitors of gambling establishments is not very high.
Online and Offline Casinos: What is Next?
Many factors influence the future development of the gaming industry. They include the overall economic growth on a global scale and the growth of individual regions in particular. An important factor is the legislative policy of the states with a great potential.
Both online and land-based casinos will continue to grow within the overall development of the industry, according to the experts of Slotegrator, which has been involved in distribution of advanced solutions for online casinos for many years. Recent economic forecasts are very favourable. As can be seen from the above analysis, the audience has high demand for entertainment and the interest of users is growing. Based on this, we can safely talk about the positive dynamics of development in the future.
The percentage shares of online and offline casinos in the total income of the gambling industry are unlikely to change significantly in the near future. About 90% of revenues will come from the land-based segment, and 10% - from the Internet.