Is Investing in an Online Gambling Business Profitable?

Is Investing in an Online Gambling Business Profitable?

Investors understand all too well the importance of identifying the right opportunity. Pick the right one and you’re on a trip to the moon, pick the wrong one, and well it’s best not to dwell too much on that. They also understand that a guaranteed investment is something of a unicorn. No matter how good an investment may look, things can change in the blink of an eye.

But when it comes to investment opportunities, there is one industry that genuinely does look like a sure thing. The global online gambling industry is growing at an exponential rate and is expected to hit a mind boggling market value of $114.4 billion by the year 2028. That’s thanks to a compound annual growth rate (CAGR) of around 10.9% each and every year. 

In short, online gambling seems to be the very definition of a sure thing. With this in mind, we’ve decided to take a closer look at the industry and what opportunities it offers. 

Multiple investment opportunities

The recent push for the legalization of sports betting across the United States has led to an unprecedented boom in the gambling industry. As it now stands, more than half of all US states have legalized either online sports betting or retail sports betting with many passing legislation for both. 

DraftKings, one of the market leaders, recently revealed that its 4th quarter growth exceeded expectations to jump by 47%. Meanwhile, its nearest competition, FanDuel reported revenues of $2 billion for 2021, an uptick of 113% year-on-year. This incredible rate of growth will only increase as more states push through sports betting bills in the coming years making an investment in the right sports betting company a pretty solid one. 

Then there is the online casino industry. While this industry has yet to reach the dizzying height of sports betting in the USA, in other regulated markets across the globe, online casinos are booming. Take the UK for example. A look at the list of new online casino sites for 2022 shows that there are 45+ sites that have launched since January. And it’s no wonder. The UK Gambling Commission reported a significant spike in online casino activity throughout pandemic-enforced lockdowns. While online activity has dropped since the reopening of traditional casinos, the online casino industry has continued to grow at a steady rate. 

It doesn’t take a degree in financial studies to see that there are significant opportunities for investment in the online gambling industry and we have only looked at two markets in the examples above. 

New markets joining the industry

In the last year we have seen multiple countries legislate for online gambling. The most notable and most successful has been the Netherlands. Dutch lawmakers passed legislation to regulate online casino and gambling providers in response to the many unlicensed companies that targeted the country in the past. Since its launch in October of 2021, the industry has grown from strength to strength generating €185 million in gross gaming revenue (GGR) in the fourth quarter of the year. 

Uzbekistan also enjoyed similar success with the launch of its online gambling industry while Ukraine was making a positive start prior to its invasion by Russia. Then there are the legal markets that are not regulated correctly such as Ireland. Online gambling has been legal in the country for many years but the government has only recently started debating the establishment of a regulator.

These are just a few samples of how governments around Europe are starting to recognize the true value of a regulated online gambling industry. And we haven’t even mentioned South America where the likes of Brazil and Argentina are also creating regulated markets. 

Should you invest in startups or existing companies?

This is where your investment savviness will shine through. Investing in established companies can be a good thing as your investment is quite secure, but your gains may not quite be on the scale that you require. However, mergers and acquisitions are big in the world of online gambling and this could significantly improve your profits. 

Investing in startups like the new online casinos in the list mentioned above is a little riskier and will require a lot more research on your part. If the startup is backed by an established brand this is a good indicator that the business may succeed. But as with all investments, this is by no means a guarantee of success. 

If the revenue figures and growth rates mentioned above are anything to go by then any investment in an online gambling company stands a good chance of success.

About the author

Johnny is dedicated to providing useful information on commonly asked questions on the internet. He is thankful for your support ♥

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