In a special report, VIXIO GamblingCompliance, a relevant provider of independent legal, regulatory and business intelligence to the global gambling industry, offers some perspectives on the main trends to watch during 2023 across major markets in the Americas, Europe, Africa and Asia. This Global Gambling Outlook 2023 provides a clear and concise overview of the key regions set to undergo significant regulatory changes during the course of the next 12 months.
Making a summary of the global outlook, in 2023, the two overlapping trends that have defined the online gambling industry for the past several years are only set to accelerate. On the one hand, local regulation is due to spread to new markets, with Peru, Brazil, Massachusetts, Ireland, Nigeria and others following the likes of Ontario in providing licensing opportunities for operators and other providers. Conversely, regulatory compliance will continue to become more complex and challenging in more established jurisdictions, including the UK and Australia.
This article will exclusively focus on the United States and Canada. In terms of forecasts, analysts from VIXIO GamblingCompliance estimate total gross revenue from all US online gambling (online sports betting and iGaming in certain states) to reach USD 23.0 billion to USD 28.6 billion by 2026. After bonuses and other deductions, net gaming revenue may extent to USD 12.2 billion to USD 15.7 billion by that year. Considering only the US sports betting market, it is expected to be worth USD 16.3 billion to USD 21.1 billion in total annual gross revenue in three years. While sports betting involves betting on real-world sporting events either in retail locations or through mobile devices, iGaming is completely an online platform.
A BALANCE OF 2022
Relatively speaking, 2022 was a quiet year for the US sports betting market. Just three states approved legislation during the year, compared with 10 in 2021 and nine in the pre-pandemic year of 2019. Again, election-year politics were a factor that hampered progress in several states, while it can also be concluded that the lower-hanging fruit has already been picked with sports betting now legal in 37 of 52 US jurisdictions. Still, industry efforts to approve online sports wagering via state-wide referenda in the giant markets of California and Florida proved to be expensive bets that did not pay out, and proponents saw lobbying initiatives fall short in other key states too.
Florida will be back in focus in 2023 as a federal appeals court rules on the validity of a landmark tribal gaming compact of 2021 aiming to grant the Seminole Tribe state-wide exclusivity over mobile and retail sports wagering. Likely to take center stage, however, is Texas. Early in the year, Lone Star State lawmakers will be back in session for the first time since May 2021, with a coalition of sports betting operators and famed Texas sports teams, including the Dallas Cowboys, pushing again for legislation to establish a market estimated by VIXIO to be worth well in excess of USD 1billion in annual revenue at maturity.
NEW US MARKETS IN 2023
Regardless of any new legislation, there will be major new markets for sportsbooks to enter in 2023, as the trio of Massachusetts, Ohio and Maryland (for mobile) all go live. The first of those states will very much be one to watch as few would be surprised if Massachusetts puts in place pioneering rules on responsible gambling and advertising such as it has done for land-based gaming.
Beyond sports betting, the reality is it would be a decent outcome for industry advocates if even one state passed legislation for online casino, with Indiana again set up to be the most likely contender on the iGaming front. The paradox of Internet gaming offering so much more potential tax revenue for state governments than sports betting, yet proving so much harder to convince lawmakers to legislate for, is likely again to be a key policy theme of the year.
For land-based casinos, legislation will be reconsidered in long-term holdouts Georgia and Texas, but progress is tough to predict at this stage. Instead, the casino spotlight should shine brightest on New York, where three licenses for casinos in the New York City area will be up for bidding.
ONTARIO IS UP AND RUNNING
With an honorable mention of New York’s high-tax mobile sports-betting market, a very strong case can be made for Ontario (Canada) to be considered the online industry’s most significant new market opening of 2022. The market was launched in April 1st 2022, and soon local regulator AGCO published advertising and marketing guidance for iGaming operators. After that, October was another month of huge activity, with updated standards to impose October 31st cut-off date for grey-market; a consultation from AGCO about promotional partnerships, and retail sports betting being launched at land-based casinos. As of December 1st 2022, there were 57 online gambling brands active in Ontario’s newly launched competitive market
It remains to be seen whether 2023 proves too soon for other Canadian provinces to follow in opening up their own markets. It’s a safe bet, however, that provincial governments will at least closely evaluate the early lessons learned from Ontario.
Throughout 2023, the success of the Ontario model will become easier to judge as leading offshore operators will have completed their transition to the legal market and a full line-up of Canadian, US and international brands will all be competing. One thing that will become more obvious is how Ontario’s regime differs from those of US states, where offshore brands are persona non grata and advertising standards are generally more liberal.
Besides, 2023 will see pockets of the industry attempting to convince Ontario regulators to loosen those standards when it comes to the promotion of bonuses and other inducements, but just as likely are tighter rules on marketing given the stated intention of officials to monitor for whether further restrictions are warranted.