Executive summary
ary
Europe continues to account for the largest single share of the global interactive gaming market with
49% of the value being derived from the region in 2014 according to H2 Gambling Capital research.
Going forward, the European share is expected to stabilise or even fall as uncertain growth in the
region’s regulated markets is countered by growth markets in North America, Asia and Latin America.
During 2014, 16.4% of the European gaming sector’s gross revenues were generated via interactive
channels.
Global online gaming gross yield by region, 2014
Latin America/Caribbean
2%
Asia/Middle East
30%
Europe
49%
Africa
1%
Oceania
5%
North America
13%
Source: H2 Gambling Capital
Recent trends
Financial results from 2014 onwards show operators’ profitability being hit by increasing taxes,
compliance costs and marketing expenses. It is not surprising therefore that the industry has been hit
by a wave of M&A activity over the last 12 months or so. For example, Canada-based Amaya Gaming
Gro up acquiring the parent company of PokerStars and Full Tilt Poker and GVC's move to take over
bwin party. UK-focused M&A deals have exceeded £11bn throughout 2015 (including new owners
for Sporting Index and Sky Bet), with mega-mergers planned between Paddy Power and Betfair, and
Ladbrokes and Gala Coral.
The major trend in digital gaming is the use of mobile devices and operators attempting to be almost
platform-neutral (or ‘omni-channel’), recognising the different needs of customers at different times of
the day across all types of device. Some gaming sites report increasing shares of their total revenues
stemming from mobile and gambling search words, which are increasingly originating from phones
and tablets.
Advances in technology have meant that live in-play betting – where bettors can place bets during an
event – has become increasingly popular and can represent as much as 50% or more of the amount
wagered on a particular event. However, the prospect of ‘betting rights’ and sports organisations
demanding fees in exchange for data rights could hit the profitability of in-play betting.
6 Digital Sports Betting