iGaming Industry: What Is It, What It Consists Of, and How It Is Evolving?

Gambling has always attracted a lot of attention, and with the advent of phones and laptops, such pastimes have become available even without the need to leave home. The iGaming industry was born — gambling for money on the Internet.

The term “iGaming” consists of two words, “internet” and “gaming.” It’s a marketing term that stands for “online gambling.” So, iGaming encompasses any online games for money and other gambling activities, such as sports betting, lotteries, bingo, and much more.

iGaming Industry Development

The development of the iGaming industry was directly influenced by four main factors: 

• regulation;
• technological progress;
• the development of digital culture;
• player trust in online payments.

The first legislative act officially allowing online casino activities was signed in 1994 by the authorities of Antigua and Barbuda. In the same year, the first online platform was launched in Liechtenstein, where users could buy lottery tickets and participate in online draws. The first online casinos also emerged in 1994 when Microgaming began releasing software for online roulette, blackjack, and slots for real money.

In 1996, Cryptologic created an online transaction system that ensured the security of payments in online casinos. Thanks to various initiatives, the global number of iGaming users exceeded 8 million by 2000, with iGaming industry revenues reaching $2 billion. In 2003, the World Series of Poker started — the largest online poker tournament, which attracted the attention of millions of players and spectators from around the world to the iGaming industry.

The growing buzz around the industry has also drawn regulatory attention. In 2005, the U.K. passed the Gambling Act, and a special regulatory body was created to oversee the iGaming space. In 2006, the U.S. authorities enacted the Unlawful Internet Gambling Enforcement Act (UIGEA), which, while limiting the ability of American citizens to access iGaming products, provided some clarity for service providers, particularly establishing standards for online payments. In 2018, the U.S. Supreme Court basically legalized online sports betting by overturning the Professional and Amateur Sports Protection Act (PASPA).

By 2012, the global number of mobile iGaming apps reached 1,000, and the volume of funds passing through such applications exceeded $10 billion. In 2020, the iGaming market volume was estimated at $59.6 billion. By 2022, it hit $105 billion. Analysts predict that the industry’s CAGR will reach 12.5%, and by 2028, the iGaming market will reach $213.58 billion.

Primary Segments

The iGaming vertical is much wider than just online gambling. In a broad sense, iGaming includes any type of online betting on the outcome of games or events.

Let’s delve into what online activities are part of the iGaming industry.

Online Casinos

One of the biggest segments of the iGaming industry is online casinos. In 2024, the online gambling market is estimated at $93.26 billion and could reach $153.21 billion by 2029 with an average annual growth rate of 10.44%.

To cater to the interests of a wide range of players, online casinos offer various types of gambling games. The most popular among them include:

• Roulette. A classic gambling game with a spinning wheel where players place bets on numbers, colors, and their combinations.
• Card games. There are about a thousand card games for money, with the most popular being poker, baccarat, and blackjack.
• Dice. A gambling game with dice rolls.
• Slots. Slot machines of various themes.

Among the main advantages of online casinos over traditional establishments of a similar type, we can highlight:

1. Accessibility. The ability to visit the establishment 24/7 regardless of the actual location, as long as you have internet access.
2. Wide selection of games. Online casinos often offer a wider range of games with different variations and themes.
3. Privileges. Digital platforms offer players various promotions, loyalty programs, free spins, and other bonuses.
4. Comfort. Playing in an online casino can be done from home or any other location, allowing players to avoid crowds and noise typically associated with physical casinos.
5. Confidentiality. Modern iGaming platforms use innovative data encryption technologies and personal information protection. Besides, playing online allows users to remain incognito when interacting with other users.

Betting

Sports betting has become not only an integral part of modern gambling culture but also one of the main drivers of the iGaming industry’s growth.

The most common sports bets facilitated by iGaming platforms are:

• Straight bets. Bets on the winner without any additional conditions.
• Moneyline bets. The ability to predict the victory of one of the teams with a specific score or a tie.
• Totals. Bets on the total number of goals or points in a match, regardless of the outcome.
• Handicap. Bets on handicaps, meaning giving a team or player some advantage or vice versa.

Mobile and online sports betting apps are actively evolving, offering users the following benefits:

• access to sports betting anytime and from anywhere in the world;
• integration with various devices and operating systems for maximum accessibility;
• intuitive and appealing user interfaces for ease of navigation and placing bets;
• optimization of the sports betting process, including fast and convenient transactions;
• implementation of Live Betting features, allowing users to place bets on sporting events in real-time and follow the progress of matches while adjusting their bets according to the situation.

In 2024, the online betting market is estimated at $48.17 billion. Analysts expect the industry to grow at an average annual rate of 11.65% over the next five years, which could see the market reach $83.58 billion by 2029.

eSports Betting

eSports Betting is another actively growing segment of the iGaming industry. Betting on the outcomes of competitions in video games such as League of Legends, Counter-Strike, Fortnite, Dota 2, Overwatch, and many others is becoming increasingly popular among participants in the iGaming space.

In 2023, the eSports betting market was estimated at $12 billion. Due to its rapid growth rate of approximately 13.7% annually, the eSports Betting industry could reach $24.19 billion by 2028. 

Like traditional sports betting, users can bet on the victory of specific teams, individual players, or the final results of tournaments. eSports has become a significant segment of the iGaming industry, attracting a huge number of spectators and participants from around the world.

Lotteries and Bingo 

These are among other segments of the iGaming industry that stand out. Demand for online lottery applications is actively growing. Although the virtual lottery market isn’t developing as rapidly as other segments of the online gambling industry, analysts forecast an average annual growth rate of 0.42% over the next five years.

Another actively growing segment of the iGaming industry is online bingo games, with the global market volume estimated at $1.07 billion in 2022. The industry’s growth rate averages 6.75% annually. Analysts predict that the online bingo market will reach $1.8 billion by 2030.

Impact of Technologies on iGaming Industry

One of the catalysts for the growing popularity of iGaming projects is the development of innovations within software. Advanced technologies and modern solutions enable the iGaming industry to attract an increasing number of users.

Among the key technologies positively influencing the development of the iGaming industry, the following can be highlighted:

1. Blockchain. Decentralized technologies are actively used in the development of iGaming apps and in the loyalty programs of gambling projects. The market size of blockchain applications for gambling reached $3 billion in 2023 and is projected to grow by 65–90% by 2030.
2. Cryptocurrencies. A growing number of iGaming operators are beginning to accept digital assets, providing confidential, secure, and fast online transactions. In 2023, about a third of bets in iGaming projects were made using cryptocurrencies. Analysts expect digital assets to become one of the dominant payment methods in iGaming projects by 2024.
3. Gamification. The ability to complete various quests, create virtual gaming characters, and receive additional rewards and bonuses for leveling them up allows the iGaming industry to attract a wider audience of players.
4. Metaverse. The integration of virtual reality (VR) and augmented reality (AR) technologies into the gaming process enables players to have a more immersive experience. While Metaverse projects in this field are still in the early stages of development, analysts expect the global VR gambling market to reach $15 billion by 2028.
5. The Internet of Things (IoT). Thanks to the IoT, the iGaming industry becomes more personalized. The technology also enhances the availability of online games, simplifies the integration of immersive technologies, and improves the quality of the gaming experience.
6. Artificial Intelligence (AI). Neural networks not only have a positive impact on personalizing the gaming experience but also improve the processes of data collection and analysis within the principles of responsible gaming. AI technologies also expand the capabilities of iGaming operators to interact with players.

Key Challenges

Despite all the advantages of transitioning gambling activities to the online space, providers and developers still face a number of challenges that negatively affect player loyalty and slow down the mass adoption of iGaming initiatives.

The main issues include:

1. User age. Age restrictions for accessing gambling games apply to all types of gambling, so they need to be taken into account when developing iGaming products. The difficulty lies in balancing compliance with these restrictions while ensuring a high level of user privacy. However, blockchain technologies and innovative KYC methods come to the aid of iGaming developers.
2. Legislative restrictions. Internet casinos and betting are still officially prohibited in many regions. Regulatory limits apply in more than 80% of countries worldwide, significantly impacting the pace of iGaming industry development.
3. Gambling addiction. Gambling activities involve high risks of developing gambling addiction since users have round-the-clock access to the Internet and gaming platforms. This negatively affects the reputation of the industry and stimulates the tightening of regulations. Partly, this problem is addressed by adhering to the principles of responsible gaming.
4. Fraud. Classic money gambling games have always been associated with fraud risks, and the iGaming industry is also not immune to them. Moreover, the variety of methods and types of scam in the online gaming space is significantly higher. However, the development of innovative tools to combat fraud and prevent suspicious activity opens up new opportunities for iGaming operators.

Essentially, the iGaming industry faces challenges that are similar to traditional gambling. But modern technologies, cooperation with regulators, player education and awareness, and innovations in security positively impact the resilience of the iGaming sector and its development.