The iGaming industry has proliferated in recent years. Currently, the online gambling market is valued at approximately $66.7 billion annually, covering all available markets. Thanks to advances in technology and widespread access to the internet, millions of people around the world have been able to enjoy gambling from the comfort of their own homes. The variety of offerings is truly impressive from online casinos and sports betting to poker and virtual slot machines.
In this article, we will look at what iGaming is, its history, key features, and development prospects. Whether you are an experienced player or a novice, this information will help you better understand the exciting world of Internet gambling.
What Is iGaming?
Online gambling is a general term for gambling on the internet, which can be viewed in a narrow and broad sense.
In the narrow sense, iGaming refers to betting money at online casinos, bookmakers, and other gambling games using electronic means of payment (cards, e-wallets). This includes sports betting, casino betting, and other gambling that is done over the internet.
In a broad sense, Gaming encompasses the entire online gambling industry, which includes various verticals and participants. These may include:
- online casinos;
- sports betting;
- sweepstakes;
- lotteries;
- bingo;
- fantasy sports;
- cybersports.
In addition, this industry includes companies that develop gaming software and online casino platforms, such as SOFTSWISS. They can also be games of skill, where the outcome depends more on the skill of the player, such as poker, blackjack, chess, and backgammon.
In other words, in a broad sense, iGaming includes not only the games themselves but also the entire ecosystem associated with them, from software developers to operators and platforms.
History of iGaming
The iGaming industry has proliferated due to urbanization, technological advances, and the ubiquity of the Internet. Below we look at the key events that have shaped online gambling since its inception in the 1990s.
1990s – the birth of iGaming
1994
In this year, the Antigua and Barbuda Free Trade and Data Processing Act was passed on November 10. It allowed the government to issue licenses to companies wishing to open online casinos. This was the first step towards the legalization of internet gambling.
In October 1994, the first online gambling site was launched with the ability to sell tickets for the Liechtenstein International Lottery.
1996
In Canada, the Kanawake Gaming Commission was established in the territory of the Kanawake Mohawk Indians. The main function of the commission was to issue licenses to online casinos around the world. In the same year, the first online casino site was created – InterCasino, which offered users gambling over the Internet, and the first online poker site was launched – Planet Poker. By 1997 there were already 200 gambling sites registered worldwide.
2000s – growth and development
2003
Chris Moneymaker won the World Series of Poker, after which the popularity of online poker skyrocketed. This was the real catalyst for the growth of the entire industry.
2004
Creation of major online platforms such as PartyPoker, which attracted millions of players from all over the world.
2005
This year the UK introduced the Gambling Act, which created the Gambling Commission to regulate all gambling. The Act also legalized the operation of gambling websites.
2006
Passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) by the U.S. Senate, which prohibited financial institutions from processing transactions related to online gambling. This dealt a serious blow to the industry but did not stop it from growing. However, the Act was repealed and revised a few years ago. Now each US state sets its own rules at the state level.
2010s – mobile technology and regulation
2011
On Black Friday, the FBI shut down the largest online poker sites in the US, including PokerStars and Full Tilt Poker, accusing them of violating the UIGEA. This event was a turning point for the US market.
2012
The introduction of mobile gambling technology and apps, allowed players to enjoy games directly on their smartphones and tablets. Mobile gaming became one of the main drivers of industry growth.
2013
Legalization of online gambling in selected US states such as New Jersey, Delaware, and Nevada. This marked the beginning of a new era of regulation and legalization of iGaming in the United States.
2018
The US Supreme Court strikes down the Professional and Amateur Sports Protection Act of 1992 (PASPA), paving the way for online sports betting in the US.
The 2020s – innovation and globalization
2020
The COVID-19 pandemic caused a significant surge in online gambling activity as many land-based casinos were closed. Online casinos and poker sites recorded an increase in player numbers and revenues.
2021
The iGaming industry continues to expand, attracting the attention of major companies and investors. New technologies such as virtual and augmented reality have begun to be integrated into online gaming, offering users an even more immersive experience.
2022 and beyond.
Globalization of the industry continues, with more countries legalizing online gambling and implementing regulations. Blockchain and cryptocurrency innovations are also beginning to play a significant role in the future of iGaming.
The history of iGaming shows how quickly and dynamically this industry is evolving, adapting to new technologies and changing market conditions. Every year it becomes more complex and interesting, offering players around the world new opportunities and experiences.
iGaming Regulation Worldwide
The global internet network allows not only local but also foreign operators to provide online gambling services to players. Legislative bodies of different countries pay attention to this and develop their own rules to regulate the iGaming industry.
In many countries of the world, online gambling operators operate legally and under the control of the state. In Europe, such countries include, for example, Belarus, Czech Republic, Estonia, Sweden, Finland, Norway and others. These markets are often referred to as regulated markets. Typically, regulation includes licensing of operators, control of financial transactions, and protection of players, similar to land-based casinos.
In some countries, such as Israel, online gambling may be completely banned. Other countries do not have a clear authorization or ban on online casinos. The Netherlands, for example, had no legal restrictions or regulations for iGaming until October 2021. After the introduction of the relevant legislation, online casinos became part of a regulated market subject to legislative control.
Thus, the regulation of iGaming around the world is diverse and depends on the legislative and cultural specificities of each country. The main complexities include differences in legislation, interaction with international markets, and combating criminal activity. Some countries have strict regulations and high-security standards, while others are just beginning to develop their iGaming laws and policies.
Types of iGaming business
The iGaming business includes several key areas, each with its differences and peculiarities:
Online casinos
Online casinos, accessible through both web and mobile applications, occupy an important place in the iGaming industry. These platforms offer a variety of games such as slots, roulette, blackjack, and poker. Intuitive design helps improve user engagement, and some platforms utilize gaming aggregators to expand their game offerings. Competition in this niche is high, requiring operators to obtain licenses and provide a variety of games and bonuses to attract players. Like online bookmakers, casinos place great emphasis on secure payment methods and reliable protection of user data and transactions.
Sports betting platforms
Sports betting is an important part of iGaming. Bookmakers, accessible through web and mobile apps, provide users with an online betting interface. They offer bets on various sports and leagues around the world. Odds may vary and real-time data helps players to stay up-to-date. The success of such platforms depends on customizing the user experience and a user-friendly interface that provides easy navigation. Security is especially important for real-time transactions, and payment options should be diverse for global accessibility. In addition, each platform must comply with legal requirements in different regions.
Lotteries
Lotteries are in the business of selling tickets for drawings with big prizes. This niche attracts players with regular draws and large jackpots, making participation easy and affordable. Operators need to create a user-friendly interface to make it easy to buy tickets and retain players. Security is very important because of the nature of the transactions, and a variety of payment methods allow more people to be reached. As with other areas of iGaming, it is important to comply with legal requirements depending on the region of operation.
Other
Other types of iGaming applications include virtual platforms for bingo and instant win games that offer a fast and exciting gaming experience. There are also specialized poker apps where players can participate in various poker games and tournaments.
Fantasy sports apps allow users to create virtual teams of real-life athletes and compete based on their real-life performances. Cybersports apps provide the ability to bet on video game competitions, which is especially popular with younger audiences.
All of these apps require well-designed UX/UI, robust security measures, a variety of payment options, and legal compliance in the respective jurisdictions.
Licensing in iGaming
Licensing plays a key role in ensuring the integrity, safety, and sustainability of the online gambling industry. It serves several important purposes. Firstly, licensing protects players by ensuring the integrity of games, protecting personal data, and preventing fraud. Secondly, it regulates the market by creating a transparent environment for operators and preventing illegal activities. In addition, licensing allows states to collect taxes from gambling, which contributes to economic development and funding of social programs. Licensing also ensures compliance with international standards, which helps to integrate local markets into the global industry and maintain high standards of quality and safety.
The licensing process involves several key steps. Operators must apply and undergo a thorough vetting process that covers their financial strength, technical capabilities, and past achievements. They must adhere to strict regulations and standards regarding game integrity, data protection, and responsible gaming. All gaming platforms and systems must be independently verified to ensure that they meet established standards. Licensed operators are required to submit regular reports and be monitored by regulators to ensure compliance with all regulations.
Gambling Licenses are issued by national regulators such as the Gambling Commission in the UK and the Malta Gambling Authority (MGA). Some jurisdictions, such as Curaçao and Gibraltar, also issue licenses that are recognized internationally. In some cases, industry associations set additional standards and conduct independent reviews to complement the licensing process.
For companies in the iGaming industry, one of the main challenges is the difficulty of complying with numerous regulations and requirements. This is where software providers play an important role, offering specialized solutions for different markets and complying with the rules of each jurisdiction. They integrate responsible gaming tools, customer identity verification (KYC) protocols, and geolocation technologies to help companies develop products that comply with legal regulations.
Software providers ensure that iGaming operators can focus on creating an engaging gaming experience while being confident that their operations comply with local laws and regulations. This furthers the goals of iGaming legalization and regulation – to provide a safe, secure, and fair environment for all players.
Where iGaming is heading?
The iGaming industry is growing rapidly, fueled by advances in technology, mobile devices, and changing player preferences. This growth is expected to continue in the coming years, bringing with it innovations, opportunities, and potential challenges.
Here are some key points to look forward to:
Market Growth.
The iGaming market is expected to continue to grow in the coming years, fueled by factors such as:
- an increase in the number of users – more people around the world are accessing the internet and mobile devices;
- changing attitudes – attitudes towards gambling are becoming more loyal, leading to an increase in the number of players;
- legalization – more and more countries are legalizing and regulating online gambling, making it more accessible and legal.
Mobile platforms.
Mobile devices are already becoming the dominant way to access iGaming.
The trend is set to intensify: thanks to continuous improvements in technology and the convenience of gaming on smartphones and tablets.
Technological innovations.
Virtual reality (VR), augmented reality (AR), and artificial intelligence (AI) will be introduced, creating a more immersive and interactive gaming experience.
Cryptocurrency.
The use of cryptocurrencies for payments in iGaming will become more widespread, offering anonymity, security, and fast transactions.
New games and formats.
New games and formats will emerge to meet the changing preferences of players.
Cybersports is already an increasingly popular area of iGaming and this trend will continue. Social gaming may also become more popular, allowing players to interact with each other.
Regulation and responsible gaming.
Regulation of iGaming is expected to become stricter. This may lead to some operators being forced out of the market, but overall it will benefit the industry by making it safer and fairer for players. Cybersecurity and data protection will remain key concerns, requiring constant attention and improvement. Combating gaming addiction and ensuring responsible gaming will become even more important priorities for operators.
It is important to note that each market is unique and trends may differ depending on geographical location, legislation, and cultural sensitivities. Overall, however, the future of iGaming looks promising – the industry is expected to continue to evolve, offering players an increasingly immersive and engaging experience. Adapting to these changes, addressing security concerns, and ensuring responsible gaming will be critical to the long-term success of the industry.