The size of the global gambling sector increased once again in 2017, with relatively new market players like Virtual Reality casinos and Bitcoin bookmakers being the big growth stories over the past 12 months.
Since it provides so many intriguing opportunities for investment, the gambling industry is obviously an attractive one. The question which potential investors must ask themselves is, which areas should they focus on in 2018 to get the best bang for their buck?
We don’t claim to have a crystal ball, but the niches below seem to show the most growth potential for next year, and are surely worth considering.
Mobile casinos
Mobile casinos have grown in popularity alongside the rise in smartphone adoption. However, until the second-half of 2017, gambling apps were limited in availability, due to Apple and Google restricting their distribution in their app stores.
However, this is set to change in 2018, as two trends converge.
Firstly, there is a more liberal attitude from both platform owners about allowing gambling apps to be published in their stores. For example, Google’s Play now accepts apps from authors who own a valid betting licence in the country they are targeting.
Secondly, there is a rush for more countries to regulate gambling and hand out these precious licences. Sweden is expected to pass legislation in 2018, with Germany and Portugal expected to follow soon after.
This may well drastically extend the market for mobile gaming.
With new possibilities opening to consumers in 2018, mobile casino does look like a potential winner. Aside from the big established brands, there might be great potential in investing in affiliate providers who can target mobile users with info on differing casino rules and welcome bonuses, and tempt new customers.
Daily Fantasy Sports
Daily Fantasy Sports (DFS) arose in the early-2000’s as an ingenious solution to the ban in the US on most forms of sports betting.
DFS takes advantage of a carve-out in the law designed for traditional fantasy sports, which does allow people to bet against each other on the performance of a hypothetical team of players. The traditional variety spreads the bet across a whole season, but DFS compresses the event into one day, increasing the intensity of the experience.
In the US, the DFS market is dominated by a duopoly of FanDuel and DraftKings, and mostly covers the football and basketball seasons.
The two companies have tried to expand into Europe by offering soccer DFS, with mixed success. Indeed, there is a huge debate within the European betting industry about whether there is space there for a DFS product.
One side of the debate maintains that since traditional betting on sports results is allowed across the continent, there will be no demand for the DFS offering.
The other view is that DFS offers a more social form of sports betting, as people can create pools with their friends or colleagues, which makes the competition more fun.
So, who is right?
Most likely, both camps are right.
For most consumers, DFS will never overtake the traditional method of betting on one’s own favourite team, and watching the game, excited by the outcome.
However, that’s not to say that there is no place whatsoever for DFS in Europe, and we can clearly see how the product could be gamified to appeal to new social-media savvy generations.
Don’t bet the farm on DFS taking over Europe, but it might be wise to allocate some funds to this intriguing new niche.
E-sports
E-sports are the new kid on the block in the sports betting world.
Put simply, e-sports is the field of competitive, multiplayer video gaming. Both audience numbers and sponsorship revenue in this niche have grown at an astounding rate in the last few years.
To most non-enthusiasts, the idea of sitting down to watch other people play video games is mind-boggling. And yet, this general disbelief that there could ever be a market for this kind of thing is exactly what makes e-sports such a potentially lucrative investment, particularly once the gambling industry turns its attention to the niche.
Although North American sportsbooks have made quite impressive inroads into the market, European operators have lagged so far. They are almost certain to play catch-up in 2018, however, as they quickly realize that video gamers in Europe are a demographic which traditional betting has barely touched.
The best play from an investment point of view here is either to allocate some funds on the sportsbooks who adopt e-sports the earliest, or in specialized affiliates who manage to dominate organic search in the field.
To sum up
Today we have only covered a few of the most exciting niches of the gambling industry which are up-and-coming. But the truth is there are several more trends that we know of, such as consolidation in the affiliate space and competitive drone racing, that might also be worth considering.
What industry trends and niches are you most excited about in the gambling sector in 2018?