Chapter 1 – Introduction
Factors affecting growth of digital gaming
An increasing proportion of the population has access to the relevant technologies and broadband is no longer
‘pay-per-minute’
The technologies are becoming increasingly user-friendly
The technologies are becoming increasingly integrated and holistically omni-platform in character
These systems have automated and convenient electronic billing systems which make financial transactions
increasingly easier
Adult populations in the years to come will increasingly consist of people who have grown up familiar with playing
electronic games and utilising computers and smartphones in their everyday lives
The ingenuity of existing and emerging technology companies and remote operators is ensuring that more and
more games and other vehicles for gambling are available through the new technologies
Spending on leisure is increasing
Spending on home-based entertainment is increasing
Gaming is becoming more socially acceptable in many markets
A rapid evolution of the digital gaming business compared to bricks and mortar operations can also
be explained by the fact that investment costs are comparably low making market entry easier.
However, behind many of the first gaming websites were operations based in overseas countries,
many of which operated illegally as they did not have the necessary licence required by the country
where the services were provided. At the time when these private operations first started finding their
way into the online world, it proved very difficult to put an immediate stop to them. They literally
flooded the internet with e-mail invitations and online advertisements, because effective measures to
trace them down did not yet exist.
Being an important source of fraud and money laundering, it became clear that sooner or later
such illegal gambling offers had to be banned and forbidden and its operators called to account.
Governments in many markets started to consider that it was not acceptable that gambling services
could be offered across their borders without having any regulatory requirements to protect
customers (and in some cases their own coffers).
1.3.2 Competition for conventional bookmakers
A wave of bookmakers appeared online in the late 1990s and at the beginning of the 21st century. By
the end of 1996 it was estimated that there were around 15 online gaming sites, increasing to over
200 by the end of 1997. In December 1998, the online publication Bloomberg News reported that 800
gaming sites existed, 60 of which offered real-time betting. There were around 1,800 online gaming
sites by the end of 2002.
Most of the online gaming expansion in the early years could be attributed to new companies that
were not associated with any land-based gambling establishments. This was largely because high
street gambling providers did not want to do anything that might jeopardise their land-based licences
because of the grey legal status of internet gambling (although this perception has since changed or
been addressed by legislation) plus they were worried about potentially cannibalising their high street
markets. In the early 2000s, a new breed of bettors also emerged, i.e., those who preferred to place
wagers from the comfort of their own home, quickly, conveniently, and 24 hours a day as well as those
who valued anonymity. Digital sportsbooks have since taken measures to attract new punters by
making digital betting very intuitive and straightforward.
14 Digital Sports Betting