Keeping up with trends in the online gambling industry is something we try to stay on top of here at OGB. There have been lots of fads that have come and gone over the years. For example when smartphones really began to take off, mobile poker was a massive deal for a couple of years, now it’s on the way down. The same thing will probably happen for Bitcoin gambling which is currently one of the hot topics.
Like everything that’s based on the internet, the online gambling landscape changes so quickly that it’s hard to keep up. Some of these changes are gradual, like those mentioned above. Others are step changes that are enforced by new legislation coming into force in different markets. Probably the biggest of these was the UIGEA legislation coming into effect in the USA, subsequently all but destroying the online poker market there.
Predicting what the next big thing will be certainly isn’t easy, but I suppose that’s true of any industry! In this article we’re going to take a look at some of the trends in online gambling over the last decade or so, and see if we can read anything into those trends. An interesting place to start is with the size of the online gambling market.
The graph below is from a presentation given by Amaya, the owners of PokerStars and Full Tilt Poker (credit to onlinepokerreport.com) and it gives an idea of where things are going generally. The report is a little old (from 2013) but it still gives some food for thought.
What it clearly shows is that online poker has had it’s boom. Indeed few would disagree with that statement. The figures on the chart are a little hard to see, but it shows growth of 36.4% in poker from 2003 to 2013, and they’re forecasting growth of 3.4% over the next few years. As someone who has been involved with the online poker community for almost a decade, I find it hard to see where the growth is coming from as almost everyone I met through poker barely plays a hand anymore. There was always talk of emerging markets in the east, so maybe Amaya have a plan in mind to tap them, or maybe they’re just trying to keep the shareholders happy with graphs that go upwards! One would assume as well that there is some bullish optimism over the potential return of the entire US market to licensed poker, and not just the few states that have approved intra-state play since Black Friday in 2011.
The bottom half of the graph is the interesting part. It details growth in sports betting and casino over the same time period. We’ve seen growth of 12.5% in these two combined markets up to 2013 and the forecast is that growth will continue at 8.5% clip beyond 2018. This is a little bit more believable, as sports betting in particular seems to be in it’s pomp. On the UK sports channels in particular, it seems that every second ad is for Bet365, William Hill, Ladbrokes or some other sports book. There is surely room for growth around the world in sports betting, as it is still not as culturally enshrined in many countries as it is in the UK and Ireland.
Of course, what happens in the US will also have a big impact on these figures.
Amaya have realised that the potential for growth in poker has stagnated, and as such they’ve moved into the sports betting and online casino markets in 2015. Another slide from the same presentation shows how the revenue streams of the big gambling companies are split up.
Casino makes up a pretty big chunk of revenue, particularly for Betsson, Unibet, and 888. Unfortunately the data for Bet365 isn’t shown. Poker is a bit part player for most operators, and it’s easy to see why they aren’t putting as much money into improving their product as they would have been 7-8 years ago.
What Does Google Have to Say?
As I mentioned earlier, my gut feeling is that online poker has probably had its day and is in decline, and that we’re probably approaching, or maybe even past the peak for casino gaming and sports betting. What interested me most when I went to write this article was a tool called Google Trends. The search engine giants make their global search history available to everyone for free. It’s a goldmine of information and a really great tool when researching just about anything. Of course it has to be taken with a pinch of salt and might not stand up as an argument in court, but nonetheless…
Let’s take a quick example to see what it can tell us about where the public is at on a particular topic. We’ll look for an answer to one of the great questions of modern times: Messi or Ronaldo?
Ronaldo in Blue Messi in Red.
The graph tells us about how the two have matched up in terms of the public’s appetite for information on them as far back as 2005. If you look at the trace for Ronaldo you can see that public interest in him has shown massive spikes every time there’s been a major international tournament that Portugal were part of. You can also see that Messi didn’t even appear on the radar until about 2005 when he started making waves in the Barcelona first team. If you look at the time period around last year’s FIFA World Cup, you can see that both men were at the peak of their Google powers, though Messi peaked in July and Ronaldo in June, which reflects their respective success at the tournament.
So, what has all this got to do with online gambling? Well, we can use the same tool to gauge how much people are searching for gambling related terms compared with years gone by, and maybe make some inferences about where things might be going.
Let’s look first of all at the three big terms: online casino, online poker, and online betting.
The trend for poker is obvious. It peaked in 2007 when the online game was at the peak of its powers and player numbers could sustain a dozen big poker rooms. After a bit of a resurgence in 2010 it’s been downhill all the way for poker and as you can see from the dashed part of the red line. That looks set to continue well into 2016 according to whatever way Google predict these things. The numbers searching for ‘online casino’ have steadily been falling too, though not the same extent as online poker. The data predicts that for the first time since it started keeping records, more people will search for ‘online casino’ than ‘online poker’ in February 2016.
Although dwarfed by poker and casino, sports betting is holding firm looks set to be the only search term to increase in popularity next year, with an all time high expected around May/June 2016. This coincides with the end of the football seasons in Europe as well as Euro 2016 in France, and the NHL and NBA playoffs in the US, so it should come as no surprise that these are busy months for the sportsbooks.
So what of the most popular casino games? Are any of the three favourites roulette, blackjack, and slot machines holding their own in the face of this adversity?
Well, they’ve all been on the wane since 2010, and quite what happened in June 2010 that made them all so popular for a single month, I don’t know. Shortly thereafter all three were equally popular for a brief period, but it is slots that have held out best since then. Blackjack and roulette have continued their sharp decline since 2010 and search volumes are down more than 50% since just after the spike. In the case of slots the search volume is down a little of 30% so the appetite for slots games has held somewhat firm.
Search volumes are down across the board for gambling related terms, but revenues and profits continue to rise. Bet365 have more than doubled their operating profit between 2012 and 2014 to more than £400m, and Amaya Gaming see a bright future with projected revenues on the way up. It’s clear that these search term charts don’t tell the full story…for one thing I’ve focused only on English queries but they can certainly offer a guide as to where things are going. It might indicate that maybe conventional marketing is a better bet these days for online gambling companies, and search engine traffic isn’t the be-all-and-end-all for them. That would certainly be in keeping with the amount of gambling ads on TV these days.
Is Anything on the Up?
Before I finish a small bright note for those of you in the industry who rely on Google for your traffic. There are still niches that are on the up. Take a look at the history for the term ‘daily fantasy sports’.
DFS is exploding, mostly in the US. In fact it’s gotten so popular so quickly with the dawn of the new NFL season that Google can’t even offer a prediction as to what’s going to happen next! It looks like an area that’s only going to grow over the next few years, and as yet it has been completely untapped in Europe with no operators offering a decent daily fantasy soccer product.
In summary, Google Trends isn’t Nostradamus but with some clever thinking it can help steer you in the right direction as to what to focus on next and where the online gambling industry might be heading.