The first choice of new operators is the operating market. The issue is not only geographical—you need to take into account both the budget and the industry’s legal status. In this article, based on our experience and that of our clients, we will briefly highlight the different types of gambling markets and some of the pros and cons of each jurisdiction using specific examples.
Features of markets
Online casinos and sportsbooks are opening all over the world, and their number is growing every year. However, not all markets are equally attractive to operators, and more importantly, not all markets are similarly regulated.
Our experts are convinced that the main feature of studying gambling markets is that in addition to demographic differences, including the gender and age of players, preferences in games and bonuses, the volume and frequency of bets; and regional characteristics associated with cultural differences and historical habits, markets differ in the degree of regulation and, accordingly, reputation in the global gambling community.
Types of Gambling Markets
Firstly, gambling markets are divided by region. Countries around the world differ in their level of development in terms of regulation and the size of these markets.
However, there are general trends in the development of regions; let’s discuss trends in the largest markets.
Europe has several legalized and well-regulated gambling nations, making it one of the biggest gambling markets in the world. With the legalization and regulation of gambling in many countries, including Italy, Spain, Germany, France, etc., the European gambling market has developed significantly. The gambling market in Europe is predicted to expand at a compound annual growth rate of 12% by 2030.
Asian markets are increasing. Our detailed overview of the region is in our e-guide here. By 2030, the Asian gambling market is expected to reach $50 billion due to factors like the expanding Internet, rising smartphone usage, cryptocurrency availability, and laxer laws.
Only three US states—New Jersey, Nevada, and Pennsylvania — regulate online gambling and sports betting in North America, and these are the most significant markets. Canada has also regulated gambling, and Mexico’s online gambling market will reach $2.72 billion in 2024.
Latin America is showing unprecedented growth. Today, these countries are attracting the attention of the entire global gambling community: Brazil has regulated the gambling market, just like Peru and Colombia; a legalization bill was passed in Chile, and Ecuador is on the way to this.
Secondly, gambling markets can be classified according to their legal status: regulated markets, gray markets, and black markets. It is worth noting that thanks to modern technologies such as cryptocurrency and VPN, players can visit casinos in other countries.
Regulated markets
Jurisdictions that directly permit and regulate gambling and issue local licenses are called regulated markets. This model was first introduced in Europe and quickly spread to critical markets in other regions.
Nowadays, the UK, Czech Republic, Sweden, Germany, Italy, Brazil, Kenya, Nigeria, and numerous other international jurisdictions are on the list of markets where online gambling is regulated.
We’ve found that regulated markets are the most mature and in-demand operators. Still, local licenses are often overpriced, and strict advertising restrictions can make it difficult for new entrants to compete with established operators.
Black markets
At the opposite end of the spectrum are black markets. These are jurisdictions that explicitly prohibit gambling for political, cultural, or religious reasons. Countries may ban land-based gambling, online gambling, or even both forms of gambling. Most countries with Muslim populations in Asia and North Africa fall into this category, but the reason is not always cultural.
Operators might occasionally be permitted to cater only to foreign clients. This holds true for nations whose primary source of revenue is tourism. In them, casinos are usually only allowed to operate at resorts. Recently, some jurisdictions, especially in island nations, have begun issuing online licenses that, among other things, prevent owners from targeting local players, thus siphoning off revenue from overseas.
Gray markets
Finally, there are gray or unregulated markets. These jurisdictions do not explicitly prohibit land-based and online gambling but do not provide specific rules and licensing processes or have severe gaps in existing legislation.
While most large, wealthy markets have moved to a local licensing model, small ones that are unable to maintain a credible regulatory or oversight body often become gray markets.
Gray markets are a good option for newcomers to the industry as they allow operators to offer their services without the need for local licenses or strict regulations. The main disadvantage, according to the observations of our team, is the inevitable instability since laws can be passed at any moment.