The online gaming industry will increasingly target casual players

The online gaming industry will increasingly target casual players, rather than its traditional constituency of sports bettors, poker and casino players, according to a new report from iGaming analysts, Media & Entertainment Consulting Network (MECN).

THE NEW 'CASUAL GAMING and Gambling on the Internet' study from MECN suggests that long established iGaming business drivers have reached their maximum potential, leaving operators on the lookout for new revenue streams. Rather than focussing on the traditional gambler, iGaming companies are increasingly looking towards a new constituency of casual players in order to boost income. Bingo, social networks and money games such as keno and lottos will all be in the sights of the online gaming sector in 2011 according to the report, with firms increasing investment in the new target areas.

Social gaming

The study suggests that the explosion in popularity of social gaming took many operators by surprise, something they will be looking to remedy this year. As Gigi Levy of 888 put it, "The industry had a blind spot". The report cites the upsurge in growth of Zynga Poker as a case in point. The free-to-play online Texas Hold'em game is a Facebook favourite and has more than 36 million active users each month. At any one time, between 200,000 and 400,000 people are playing the game online, dwarfing the figures of even the leading real money poker rooms. A 2010 Econsultancy survey stated that 19 percent of its respondents take part in social gaming with that figure rising to 28 percent for those aged between the ages of 16 and 30. This is estimated to be a £1 billion sector, and one which the iGaming industry will be keen to tap into in the coming months.


Bingo is another potential growth area highlighted in the report. As we have seen in recent times, the online version of the game has enjoyed a huge surge in popularity with the social aspect of the online game a crucial factor in its growth. Bingo sites have encouraged participants to interact with other players while taking part, with this increased interaction fostering a greater sense of community and more importantly for operators, greater brand loyalty and player retention. The likes of Playtech, 888 and PartyGaming have all heavily increased their investment in online bingo.

The report also considers the new growth opportunities in the newly regulated markets of France and Italy where casual players are now the primary source of revenue generation. Fantasy sports, where players create an individual virtual team to compete against other teams based on statistics of real-life professional sports teams, are also seen as potential growth areas, acting as 'strategic entryways into markets with legal restrictions' most notably in the USA, where fantasy football and baseball leagues have earned huge mainstream followings. Skill rather than luck based games such as solitaire, Zuma, 9 Ball Pool and mahjong are other areas the report highlights as potential sources of growth for online operators.

Revenue and growth

The report suggests that the iGaming industry now appears to have recognised the importance of social gaming and its potential as a new and growing source of revenue. "The online gambling industry is striking back and is launching its own social gambling offers. The rapidity and determination with which this is happening comes as a bit of a surprise: 85 percent of all operators surveyed expressed their intention to increase their efforts in social networks/gaming in the next two to three years."

The potential for growth in the online lotto sector, especially for private sector operators, is another area touched on by MECN. Online lotto sales, which are estimated to grow to $5.5 billion by 2015, have been largely overlooked by many in the industry according to the study. However, the outlook for growth could change rapidly with state domination in the lotto arena potentially coming to an end. MECN's Martin Oelbermann explains, "Large private operators will soon discover online lotto and numbers games. What started in 2009 witn hefty investments in bingo will spread to lotto and numbers games - maybe already in 2011."

The current gross revenues for numbers games and lottos stand at around $100 billion (including traditional retail sales) with Internet sales amounting to approximately $1.9 billion in 2010. MECN predicts that Internet sales will rise to as much as $5.5 billion by 2015.

In its report, MECN goes as far as to say that the Internet could have the same impact in the lotto sector as it did in the sportsbook arena. Martin Oelbermann continued, "The race to win over casual gamblers is surely on, and lotto/numbers games will play a vital role in this race. Therefore, state lotteries and NG0 operators should start getting ready if they do not want to lose their last stronghold."

So, it would seem that the iGaming industry has recognised, it somewhat belatedly, that the Internet has become a much more interactive and social environment in recent times.
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