If you could pinpoint a single point in time when the most industries were completely transformed in one fell swoop, then the late 2000s would be a fair estimate. From the birth of social media to the mobile revolution, consumers and businesses alike had to change their actions completely to survive in a brave new world where screens shrank and digital became more important than physical. Not to mention the global recession, which forced industries and governments to be more efficient.

Traditional retailers, service providers, technology manufacturers, and even financial institutions had to completely change the way they interacted with their clients and customers. For the first time in history they were communicating via email more than paper and becoming a lot more flexible in terms of working hours and availability to accommodate true 24-hour culture and the ‘always on’ attitude. For the gambling industry in particular, it was a time of both change and opportunity.


On the up: the continued growth of online gambling

The rapid growth of online gambling shows the potential for investment based on year-on-year figures

Online gambling had already been around for a good decade before digital took over in the late noughties, but it took a while for things to get really going. Playing online poker over a dial-up connection may have been fun at the time, but the technology that would allow the industry to sky rocket wasn’t really there yet. It was only through more portable laptops, and eventually the smartphone (read iPhone in 2007) and tablet (read iPad in 2010) that online gambling could really begin to gallop. In 2008, the global online gambling industry was already worth just over a respectable £16 billion, built up by trailblazing online-only casinos and established gaming organisations who were beginning to see the light. 10 years later in 2018, the industry is now closing in on the £40 billion mark. For the investors, the journey has certainly been a good one, with profits enjoying the same growth as revenue.

There are a few factors behind the huge success of online gaming. To understand them, we need to realise that gambling is unique as a service, and as a commodity. There’s a reason why Las Vegas is so successful, and why there’s an underground gambling industry in pretty much every country on earth – even the ones with legalised gambling. Our relationship with wagering goes back a long way, and there’s a mysterious attraction to risking money on something often out of your control. Having the ability to do this 24 hours a day seems to be one key factor, but add in a more relaxed view on gambling, celebrity endorsement, and the hundreds of fantastic offers, discounts, and free bets that are the cornerstone of many online gambling marketing campaigns.

In a world where the house always wins, gambling on gambling has been a very good move for investors, especially in the UK. Online gambling in the UK has gone from strength to strength in a heavily regulated market dominated by several stock-listed players and smaller independents. For investors in the UK, each of the top 10 gambling companies have made a profit in the past decade. For example, if you had bought ordinary shares in 888 Casino, one of the UK’s market leaders, you’d have doubled your investment by 2018, with dividend payouts close to 3% each year.

Transforming betting culture

Bingo is on the way to becoming the first gambling industry sub-section to be more prominent online

Online gambling has changed betting culture in the UK – reshaping sports betting, how we interact with bookmakers, and even enjoy a game of bingo. The bingo industry in the UK is worth over £1 billion, but there’s a steady trend that is affecting the traditional bingo hall, and making investing in online bingo providers more attractive. Slowly but surely, online gambling is taking market share of physical gaming outlets, and bingo premises in particular are feeling the pressure. The number of bingo halls in the UK now sits at 583, a number which is decreasing year on year, down 1.4% from March 2017. The remote gambling sector however, in which online bingo sites, now makes up 34% of the £13.8 billion revenue generated by gambling in the UK each year. Wink Bingo, a brand owned by 888 Holdings, is a particular success story. Bought for £60 million in 2009, Wink Bingo is the perfect example of an online revenue stream that is riding the crest of renewed interest in a section of the industry which was previously in decline. Thanks to vastly improved access, technological advancement and the fact that players can pick up their smartphone to enjoy a quick game of bingo rather than having to travel to a bingo hall, this subsidiary brand is contributing to 888 Holdings’ profit thanks to continued growth and the fact that online is slowly overtaking traditional ways of gambling. Of course, it’s not just Wink Bingo that caters for lovers of the game. From Posh Bingo to 888Ladies, it has many exciting brands that theme the game in different ways – as you’ll see from the range of online bingo sites it operates.

The global potential of online gambling

888 Holdings have enjoyed sustained share price increases since going public

Online gambling certainly hasn’t found its peak yet either. Currently, only a handful of countries have a model similar to the one found in the UK, which acts as something of a success story when it comes to investing in gambling. The tax revenues collected by the UK government are impressive, and countries and markets that have historically banned or otherwise severely limited gambling present the next big opportunity for investment. The US may have a rich history when it comes to casinos, with Las Vegas, Atlantic City and now places like Detroit becoming world-famous gambling destinations, but the online gambling industry is severely restricted, and in some states, non-existent. With a gaming market worth $73.1 billion currently, and online casino gaming making up a fraction which is way smaller than the one-third of all gambling it comprises in the UK, the industry is ripe for a revolution, with a former casino magnate in President Donald Trump the man who could let the horses bolt. With an underground industry worth between four and five times more than legal gambling in the US, this is a massive opportunity for investors to hit a market early that is already displaying a gigantic demand.

The same rings true with China. Despite legal gambling being offered in Macau and Hong Kong, the Chinese government has already explored opening up further gambling resorts, and is busy discussing how a legalised gambling system would work. This presents an even bigger opportunity than the US, and investors could make a killing if the companies holding their cash manage to branch out overseas.

Gambling is still a fantastic opportunity for investment, with not only a successful track record in relatively small markets like the UK, as well as massive opportunities in markets that are clamouring for the same level of online gambling access. The only speed bumps currently are both legislature and political discussion, but the fact that some of the UK’s biggest gambling operators, earning revenue in the billions, are giving up half their profits to tax, then the opportunity for governments to open up a massive new revenue stream from online gambling could prove to be too enticing. As with any investment, the time is certainly now, with the global gambling industry set for continued growth well into the 2020s, regardless of any situation changes in the US or China.