A decade ago, Macau was the city of choice for anyone that wanted to invest in casino stocks. But since early 2017, Macau’s revenues have been stagnant, leaving investors to focus on other markets. The online casino industry is fast emerging as a great alternative for stocks investors but it’s not without challenges.
A $50 Billion per Year Industry
The online gambling sector is an ever growing industry. In 2018, the industry steered past $50 billion, officially turning in more revenues than Facebook and other social media sites. The UK, Australia, Malta, and Curacao lead the list of countries that regulate the biggest online casinos today.
These countries all allow investors to set up online casinos in their respective jurisdictions. They have bodies that regulate casinos and discipline those that break rules. The US lags behind in cooperating with online casino business but still contributed at least $4 of the $50 billion the industry earned in revenues last year.
Nonetheless, an industry worth that much means at least one thing: there is plenty of money being made. This doesn’t necessarily mean investing in online casinos will result in automatic profits but the potential is there.
Declining Growth Rate
The remote gambling industry is past its peak meaning the days when investors earned insane amounts of profits after investing in online casinos are gone. The industry’s golden age, the mid and late 2000s, and early 2010s are also behind us.
Despite this, the industry’s annual revenues are increasing at significant speeds. To be specific, the industry is growing at a rate of 10.9% every year and will continue growing at this rate until the mid-2020s. By then, the industry is expected to be worth a whopping $94 billion.
A growing industry is certainly a great place to invest your money. If you invest in the right company, there is only one way for your investment, and that is to earn profits. Of course, not every casino is headed for growth.
If Las Vegas’s stats are to go by, most casinos are buried in debt. They may be opening new branches everywhere but their net profits are minimal. Still, people invest for many reasons apart from company profits.
In an example, the most valuable and best casino site stocks don’t always come from the biggest casinos. Yet, investors will back their money on these companies hoping they can grow. Essentially, the companies’ potential for growth is a bigger reason for people to invest in them than their current net revenues.
Great Variety of Companies
There are at least 5000 online casinos today. Most of the casinos are small amateur sites that barely turn a profit. On the other hand, the top 500 casino sites offer a great deal of variety for stocks investors. The best UK casino sites according to bestukcasino.org.uk are not only good to play in for gamblers but also hold lucratively valuable stocks.
British online casinos like 888 Casino, Betway and LeoVegas aren’t just popular in the UK. They are famous everywhere in the world where online gambling is allowed. 888 Casino and William Hill even have licenses to operate in the US, a country within extremely strict online gambling laws.
Speaking of the US, North America is now accepting online gambling businesses. Successful casinos will soon be able to serve US-based casino fans without facing legal problems. This will, in turn, mean the companies become more profitable and more lucrative for investors.
The Input of Online Sports Betting
Back to the USA, online sports betting is a small fish compared to most Las Vegas businesses. From slots to blackjack, poker to land-based sports wagering, online sports betting is relatively small in the USA. Surprisingly, Americans wager more than $150 billion illegally on sports.
This year’s super bowl, for example, attracted $6 billion in bets. Out of the amount, only 5% of it was done legally. The remaining bets were completed in illegal overseas-based online betting sites. This may soon change after states were given the mandate to make rules related to online sports gambling in May last year.
Of course, the US hasn’t always been progressive in matters related to online gambling. States have always had the freedom to legalize online casinos but most are yet to do this. Regardless, online sports wagering is a multi-billion industry in Europe, Asia and other parts of the world.
In the UK alone, online sports wagering is estimated to be a £14 billion industry. Across the world, the industry is worth more than $30 billion. When combined with the online casino business, investors have a lot of businesses they could invest in.
Rise of E-Sports
Investors not interested in buying stocks from online bingo and blackjack casinos are now placing their bets on the newest casino related sector: e-sports. Sure, e-sports is mostly about video gamers competing in front of large screens while millions of people watch them. But that also means one thing: e-sport is ripe to be tapped by investors.
Billionaire NBA legend Michael Jordan is amongst the most famous people who’ve already locked shares in some of the upcoming e-sports leagues and businesses. Huge brands like Toyota, YouTube and Twitch have been at the forefront of building the nascent industry by investing millions of dollars into it.
Online, e-sports is now accepted by bookmakers. Professional team players have become prime ambassadors for all sorts of brands with the most famous players earning up to $10 million per year. In the next decade, e-sports and related betting companies with be huge businesses that could reward early investors.
In Conclusion.
Nothing is ever guaranteed in investment. Casino stocks investors often express their frustrations after backing certain companies only for them to fall. Still, there are people who see opportunities in different sectors of the gambling industry.
If you’ve been thinking about investing in online casinos, do due diligence. Many experts believe the golden age for online casino stocks is long gone and you’re better off investing somewhere else. However, the industry keeps rising and opening up for more opportunities. Do your research and make an informed investment decision.
