Challenges for iGaming industry in 2021
Frequent legal changes, always-demanding players, and new markets opening up raise the pressure in the iGaming sector. The changing dynamics necessary for staying relevant in this business are becoming more difficult to withstand, especially during the global pandemic. The gambling business estimates the chances for overcoming the obstacles and continuing their services, but for now, no one can be sure about the upcoming months. Let’s explore the main challenges that the iGaming industry will face in 2021.
The global gaming market is expected to reach a value of USD 295.63 billion by 2026. Despite many legal restrictions, gambling businesses can still promote their services, attract new players and expand their client base. The question is for how long they will continue to do so. Before we talk about this years’ challenges, we should first explain how the business works and what shapes its profits.
It’s an industry that’s built on the act of placing a bet on the outcome of an event, sports match, or (relatively recently) an online game. The activities include poker, sports betting, online casinos, and all the online betting platforms. When it comes to market size and revenue generation, this sector is on par with the film and music industries.
The business’s fundamental part is players who regularly place sports bets and engage in various online games. It’s becoming increasingly difficult for online gaming operators to attract new customers as the law restrictions in the vast majority of countries forbid promoting iGaming activities. Those who are more innovative manage to reach the target audience using a combination of various communication channels.
What challenges await the iGaming industry in 2021
The upcoming months are a big unknown for many business sectors. It is no different with the gambling and online casino industry.
Market competition is expanding
Since the US gambling laws started to liberalize in some states slowly, the market competition began to grow. The sector experiences considerable activity from startups that are about to take over a significant part of eSports. For example, The Forge Arena, made by Phoenix Rising Studio, is a startup looking to become a new player in eSports with a high chance of attracting many customers. eSports takes the form of organized, multiplayer video game competitions and is part of the gambling activity as players can bet on a chosen team’s victory.
Cryptocurrency becoming a standard
Another interesting challenge for iGaming in 2021 is the advancements in blockchain technology. Payments in cryptos have become increasingly attractive to gamers worldwide due to their low transaction fees and funds transfer speed. Many online casinos have integrated cryptocurrency into their payments systems, and there are even some operating exclusively on Bitcoin. However, many gambling operators stayed in the “old” system and for sure lose some part of their customers.
Apart from that, there are some unresolved issues with cryptocurrency that block many companies. One of them is the Gambling Commission that requires a certain level of transparency regarding this kind of transaction. As we know, payments in cryptos follow an anonymous approach to payments, and here’s where things get complicated. Since it’s difficult to track the origin of payments in Bitcoin or other cryptos, the chances are some online casinos will stay behind with the innovative payments.
The popularity of eSports and video games
We mentioned the Canadian startup that is going to shake the world of eSports. Well, that is just the beginning. The market is changing as well as the target audience. The gambling operators are becoming aware that they should aim more at Millenials. The problem is that this group engages more in video games and eSports than traditional casino games. They are more likely to place a bet on video game tournaments like Fortnite than good old poker. Casino companies try to move into the realm of video games, but this might be the biggest challenge for some of them.
Player acquisition and retention
The problem that never gets old is attracting new players and keeping them in the business without violating the law. As we said, gambling companies use a combination of communication channels such as emails or social media to reach their target users. But the results of these actions are not always satisfying.
Only platforms that deliver personalized experiences will survive this fight. Gambling operators who don’t have the strategy to attract and maintain customers in the base won’t stay in the market for long. The associated costs and restrictions in iGaming advertising are making it even more difficult.
Unknown future of law restrictions
Unfortunately, the regulations regarding the iGaming business are not certain. Many governments and parties oppose the idea of gambling marketing and may threaten the development of this industry. For now, online casinos operate in regions where advertising activities aren’t forbidden or where the law has not yet caught up with the idea of internet gambling.
Not everyone sees the challenges as something negative
According to IGB, the iGaming industry will continue to strike records in sports betting just like in the previous year, where they had incredibly high revenues. The fact that everything shifts to mobile is more convenient for all the players who are the backbone of this business. That’s why the popularity of mobile gaming and online sports betting will further grow, and the current challenges will only help drive innovation in this sector.
The online gaming industry must adapt to new challenges in the market and deal with the pandemic’s unknown future. But, considering its last year’s results, chances to repeat the success are high. iGaming is one of the fastest-moving sectors and serves great entertainment to players (not only during lockdown). Unless the creators stop investing in making the games more engaging, their business will continue to run and deliver an unforgettable experience to users.