4.0 ISSUES AND CHALLENGES IN THE ONLINE GAMBLING INDUSTRY
Last updated
Last updated
While the global and online gambling market has grown immensely over the years for the reasons described – and revenues are predicted to keep rising in the years ahead – the industry has to deal with a multitude of problems and challenges.
These issues will hereafter be described and discussed in more detail:
One issue is legislation. Across the world, numerous countries are taking legal action or passing legislation that aims at limiting or outright banning online gambling. Many of the countries going after and doubling down on gambling and betting are in South-East Asia. Singapore has run state-wide campaigns against online gambling, while China and South Korea have closed down many illegally operated gambling sites and arrested site operators.
Another major issue is fraudulent behavior by market actors on both sides. For one, this applies to a few online casino operators whose practices, in turn, damage the credibility and reputation of the entire industry. Likewise, online casino users who try to use fraudulent practices like multiple accounts or attempt to gain illegitimate access to bonus programs through signing up numerous fake accounts represent another big issue online casino operators have to deal with.
As the reputation of online casinos takes a hit from such fraudulent practices, it becomes harder for new players to enter the market. The extensive marketing and PR campaigns necessary to build a solid reputation represent probably the biggest barrier to entering the online gambling market. At the same time, a good reputation is the single biggest asset an online casino operator can have.
The result of fraudulent behavior on the side of casino operators is a skeptical and cautious market in which both gamblers and bettors are careful not to become victims of fraud. These users are afraid of practices such as delayed or non-existing payouts, rigged random number generators, account closure or even loss of personal information. Online gambling review sites have picked up on this and often scare their readers to beware of certain “scams”, while advertising other casino operators as reliable and trustworthy.
Yet, it is important to note that these sites are monetized by referring users to the highest-grossing online casino operators who pay their affiliates once a new sign-up has made the first deposit of a predefined amount. Effectively, online gambling review sites often only add to the skepticism and fear online gamblers already have.
For example, a 2017 study by the British Gambling Commission found that only 33% of participants surveyed felt that “gambling is fair and can be trusted”.6 When asked further, it was found that fraud is a crime people commonly associate with gambling. A 2013 study by Gainsbury et al. which examined the level of trust and attitudes online gamblers have towards online casino operators, showed that less than 50% of existing (!) players agreed or strongly agreed that online gambling was fair, and 37,6% believed that online casinos have a switch that allowed them to have the software turn the odds in the operator’s favor.
This ecosphere of general distrust and skepticism represents a major obstacle to the industry’s continued growth. It can both hinder new users from joining the online gambling market and cause existing users to hesitate to make further deposits and continue their online gambling habits. As a result, user growth and revenues are stalled.
