What Is iGaming? Definition, History, Tips, Trends
In the technology-driven world, internet gaming has become a worthy competitor to offline gambling. But what is iGaming, and how does it differ from offline gambling activities? If you are among those striving to uncover this notion, you are at the right place.
In this article, we will delve into the essence of iGaming, unravel the subtleties of this market, and discuss the factors that shape its growth. Besides, we will look at the benefits and types of online gambling businesses to help you figure out which one appeals to you the most.
With this knowledge, it will be easier for you to decide what branch of the iGaming industry to focus on and what business opportunities you can take from entering this market. Keep reading to decode the world of internet gambling together with Limeup.
What is iGaming?
iGaming stands for “internet gaming” or online gambling and covers all types of interactive virtual gaming activities. Such activities are organized and held with the purpose of entertaining a user, letting people earn money, and gaining profit from it.
The difference between iGaming and gaming lies in the fact that the first term covers gambling activities where people bet via electronic means. To be involved in online gambling, people have to invest real money into such activities.
Meanwhile, gaming refers to physical activities for recreational purposes, such as online video games, card games, board games, etc., where no investment from a user is needed.
Recently, the online gambling market has gained much popularity because of the situation in the world and the benefits digitization offers. Among the most valued ones, there are pleasant user experience, operation security, service availability, and ease of use.
According to the Online Gambling Global Market Report 2023, the global iGaming market is projected to grow at a CAGR of 9.1%, reaching a value of $125.6 billion by 2027. Innovative technologies, including blockchain, VR, and AR, will facilitate its growth and make the user experience even more immersive.
The most popular iGaming hubs in the world include Malta, the United Kingdom, and Gibraltar. Although many states have imposed regulations for online gambling, it’s still restricted in many other countries. This is why it’s important to figure out how iGaming works in your region before delving into this business.
People investing in iGaming solutions choose either to be involved in B2B gambling activities or start their own B2C businesses.
The B2B side of iGaming links different businesses with each other to facilitate the user experience and enable gambling activities online. An example of B2B cooperation in online gambling is the work of a gambling software provider and the online gambling firm using their software.
As for B2C activities, these center on the services and products offered by a business to a customer. Sports betting, online casino games, real-money slot games, etc., are examples of B2C online gambling solutions.
History of iGaming
Now that you know the iGaming definition, we can dive into its history and development. According to Adrants, the history of online gambling can be broken down into several transformational periods. Let’s discuss each one in more detail.
History of iGaming.
– 1994: emergence of iGaming. It was the year when the first online gambling website was created. It was the first online gambling solution available to the public. The website enabled online public ticketing for the International Lottery in Liechtenstein and marked the emergence of iGaming in its modern sense.
In the same year, the Caribbean nation of Antigua and Barbuda released the Free Trade & Processing Zone Act, which enabled online gambling companies to request a license.
– 1996: start of the online gambling regulatory practices. In 1996, the Canadian Kahnawake Gaming Commission was established. The purpose of this entity was to impose regulations on online gambling activities and issue licenses to online gambling businesses.
From that time on, the industry has become more transparent and secure while protecting client money and data.
– 2000s: advancements in the online gambling industry. From the late 1990s to the early 2000s, the industry kept booming. The market’s growth was facilitated by the spread of the Internet, the rise of urbanization, and technological advancements, including the spread and availability of PCs and home consoles. Also, the new feature of multi-player gaming was introduced into this market.
In 2003, the 888.com site was launched, which soon became the first online casino website licensed in the US and one of the most popular examples of online gambling business.
Between 2003 and 2006, the number of players involved in iGaming doubled every year, turning this period into the golden years of online gambling growth.
– 2010s: establishment of iGaming as an independent market. The availability of smartphones and tablets paved the way for the growth of mobile iGaming and gaming on the go. In the 2010s, many new businesses joined the iGaming sector, either providing gambling services by themselves or offering B2B services.
In the meantime, the growth of iGaming attracted the attention of legislators who strived to make this industry more manageable and controlled. In 2018, the US Supreme Court released the PASPA, Professional and Amateur Sports Protection Act, regulating sports betting activities in the US and opening the way to the rapid growth of legal gambling.
– 2020s: industry’s steady growth. As for the current state of online gambling, its popularity varies from country to country because of the difference in regulations and economic conditions.
Online gambling is legal in many developed countries, including the United Kingdom, the United States, Australia, Canada, Sweden, Denmark, Belgium, Netherlands, Italy, France, Spain, Switzerland, and others. In some states of the US, online sports betting activities have become available only in 2018. In other states, such activities are still prohibited.
In contrast to this, we can mention more advanced regions like the UK, where online betting activities have been legal since the early 1960s, and laws regulating modern sports betting were released in 2005.
All in all, iGaming keeps growing, offering plenty of opportunities for both businesses and clients. Today, it’s more regulated and protected compared to 10 years ago.
Client data, money transfer operations, and business processes under the roof are secured by the laws, technological implementations like blockchain, and regulatory basis. Thanks to this, online gambling has turned into a major competitor to offline gambling.
Types of iGaming
There are 5 major iGaming solutions you can launch, including an online casino, online poker company, live dealer studio, e-sports company, and online sports betting studio.
Types of iGaming.
Online casinos
Online casinos work similarly to offline casinos and provide a player with all the same features and gaming opportunities. There is no need for a player to learn how it works if they have ever played traditional offline casino games.
The main source of income for online casinos is money from the losing bets. In fact, the total income from all wagers is higher than the average payout. This allows casinos to earn money easily, provided that the platform has gained popularity and has been promoted effectively to the target audience.
Online casino sites or platforms offer a wide variety of slot games, driving an immersive user experience. By using 3D tablets or VR glasses, players can fully put themselves in the casino atmosphere and interact with other users while not leaving their homes.
Online poker platforms
iGaming platforms of this type earn profit from changing a fee for each pot. Usually, this is a small percentage of a pot called a rake.
As an online poker studio, you can offer different forms of poker games to your clients. For example, users can choose between straight poker, flop, stud, or draw poker. Also, you can provide your customers with the following options:
- Users can play poker in a live stream, allowing other users to watch the game.
- Users can play poker online via mobile or web platforms with other players or with computer-generated bots.
- Users can play poker via the app that should be downloaded and installed.
Live dealer studios
If you want to invest in the online gambling business, you can open a live dealer studio. The more people will watch the games happening in your studio, the more money you will earn.
Live dealer studios are physical studios where casino games are played and broadcast online. Compared to other types of online gambling businesses, a live dealer studio requires more investment. You will have to rent a facility, establish a brick-and-mortar casino, buy or rent iGaming technology and equipment, and more.
E-sports tournament companies
E-sports tournament platforms are among the iGaming solutions where players compete against each other with the purpose of winning a reward. Such tournaments can offer different rewards, but winners are usually given a financial prize.
As an owner of such a business, you can charge a fee for participating in a tournament, watching it online, or advertising one’s products during these events.
Sports betting studios
This is one of the most popular types of the online gambling business. Online sports betting studios earn money from people betting on real-world sports events. Players can place a bet on the outcome of a sports event or choose to wager on the event in real time to predict the final score, guess the winners, etc.
Sports betting studios earn money from losing bets. Also, they can charge a commission for each transaction made via their platform.
Why is the iGaming industry so popular?
Notably, this industry has gained its momentum and grown tremendously during the last two decades. The spread of the Internet and technology were among the factors facilitating this process.
Let’s discuss the features and characteristics that explain why online gambling is so popular nowadays.
Reasons why iGaming is so popular.
Accessibility of services
In contrast to offline casinos, online solutions for online gambling ensure wide accessibility. Now, any user having an Internet connection and a compatible device can play games online regardless of the location and time.
Players can choose between a range of iGaming software providers and participate in international events without leaving their homes. The online gambling industry is available for any player who is compliant with rules and standards.
Operation security
The growth of the online gambling industry depends hugely on the security and quality of financial operations. Gambling providers integrate cutting-edge technologies like blockchain and crypto wallets with their solutions, providing users with a variety of deposit and withdrawal options.
They also implement effective security measures, including SSL certification and know-your-customer (KYC) processes to authenticate their solutions as well as user identities.
Pleasant user experience
Positive user experience in iGaming is ensured with the combination of different tactics and strategies. First, online gambling companies invest in user-friendly interfaces since it’s important for a website to load fast and be responsive and easy to navigate.
Second, iGaming operators do their best to make sure that all players are on equal terms. They set deposit limits, employ certified random number generators (RNGs), add automated player exclusion if the latter violates the rules, provide users with time-out features, and more.
All this is done to ensure a healthy and fair iGaming environment, which is highly valued by the player community.
Virtual socialization
By joining virtual games, players can socialize with other people. Most iGaming software solutions offer various social interaction features.
Online gambling firms strive to make the interaction in the game more realistic and similar to the offline casino experience. To achieve this, they integrate different communication tools into their systems, including video streams, messaging, live chat, and others.
All this helps a player get a 360-degree visibility of the game’s context, observe the behavior of other players to detect non-verbal clues, and overall enjoy the immersive user experience.
Game and feature variety
To participate in several events offline, a player has to spend much time and money, relocate from place to place, and manually look for new opportunities. In contrast to this, online gambling allows a user to choose from a variety of games and features on one centralized platform.
In a day, they can take part in a number of games. What’s more, they can customize their profile and configure the platform features to create a convenient gaming atmosphere.
There are many other benefits that stem from the main ones. All in all, iGaming has grown in popularity because of its convenience, absence of barriers for a player, and rich functionality.
How does the iGaming business work?
The basics of this business are pretty simple and consist of 4 steps:
- A player deposits their money to the account on your iGaming platform.
- They wager their money on the games of their choice.
- They win and withdraw their money or bet again.
- They lose and quit or deposit their money to bet again.
This 4-step cycle forms the basis for the functioning of iGaming. In some gambling activities, players rely on their gut and luck. In others, their knowledge of the situation and their ability to analyze the circumstances plays a vital role.
To choose the best types of games, conduct a study on your target audience. Figure out if your target client has the time and desire to delve into the online gambling context and grow their skills in this area. Or if they participate in online gambling activities to relax their minds and try their luck.
No matter what type of client you focus on, your goal as a business owner will be to convert and retain the players. For this, you can apply various marketing techniques and offer loyalty programs, free wagers, bonuses, big rewards, etc. All this will help you ensure a positive user experience and give you a competitive advantage.
Must-have components of the iGaming business
Key elements of iGaming business.
When starting an online gambling business, it’s important to mind the must-have components to estimate how much work, effort, and expenses they will require. Depending on the business type and goals, the component list can be extended or narrowed. Below, you can see the key elements worth your attention and effort:
- Online gambling software
- Payment processing solution
- Customer support
- Gaming license and compliance
Online gambling software includes a website, application, or platform that will connect your gambling business with players and enable a user to immerse into the world of iGaming. Payment processing solution, in turn, is essential for managing your and your client’s finances and processing transactions.
As for customer support, it plays an important role in retaining the first users. By providing them with a support team ready to answer all their questions and fix any issues, you will increase client trust in your business.
Last but not least, the component of gaming license and compliance will depend on the region where your business operates. So, it’s a good idea to hire a consultant who will instruct you on the strategy of getting a license and being compliant.
5 growing iGaming trends to mind when entering this market
There are a couple of tech trends that have a big impact on the growth of this industry. These trends shape the future of online gambling and should be considered by your team if you seek new features that would differentiate you from the competitors.
– AR and VR. The integration of AR and VR technology into iGaming enables businesses to reach the highest level of realism when it comes to user experience. With the rapid pace of AR/VR technology growth, they become more accessible and affordable to the public.
Virtual reality in iGaming market.
With the help of AR/VR, online casino software providers can recreate the conditions and atmosphere of the offline casino, which excites and attracts the audience and increases the demand for these innovations in the industry.
– eSports betting and video games. eSports gambling is one more emerging trend that lies in betting on the outcomes of competitive games. Such an activity has gained popularity during the pandemic and keeps spreading. As online games evolve, including their graphics, sound, animation, design, gameplay, etc., viewers get more interested in watching the games and bidding.
Example of eSports gambling developed by Limeup.
– Gamification. To retain the audience, online gambling companies try to elaborate on the best strategy on how to create a betting website and encourage users to interact with it. Gamification is the extra engagement method that lies in the integration of game elements into the gambling process.
The process of making a betting website.
On online gambling platforms, this method can be implemented in the opportunity to choose or customize a character, play a quest, get level-based rewards, and more.
– Blockchain technology. Being one of the top iGaming trends, blockchain brings numerous benefits for both businesses and players. The transactions are made securely, confidentially, and quickly. Withdrawals and deposits are processed instantly, which also enables a user to participate in games and bet without delays.
Blockchain technology can be integrated into online gambling solutions in two major ways. The first way is to connect your online gambling platform to a crypto payment system that uses blockchain technology. In this case, a gambling firm accepts payments in cryptocurrencies, including the most popular ones like Ethereum or Bitcoin, in addition to government-issued currencies.
Example of app with blockchain technology developed by Limeup.
Another method is to connect an iGaming solution directly to the blockchain. Under such conditions, the team involved in poker app development creates a platform that interacts directly with the player’s crypto wallet.
Such a method enables a user to maintain maximum anonymity and security as no personal information is needed when they sign up on the blockchain-based platform.
– Streaming and social media. Watching others playing games is no less popular activity than playing by oneself. The number of iGaming streamers grows in proportion to the number of viewers.
Most Watched Streaming Platforms.
To engage the audience, online gambling businesses invent new methods and techniques like social media campaigns, cooperation with influencers, live streaming campaigns, and others. They rely on top social networks like Facebook, YouTube, or Instagram to promote their services there to the target audience.
Conclusion on the industry’s prospects
In this article, we’ve answered the question: “What is iGaming, and why is it so popular nowadays?” As you see, technology advancements and the benefits of online gambling have led to the growth of this industry.
Factors like the rise of AR/VR, blockchain accessibility, user convenience, the absence of limits, and others have shaped the development of iGaming and led to the shift from offline to online gambling.
If your team is ready to grasp the opportunities and innovations of this industry, it will likely pay you off in the form of growing profit and high demand.