The piecemeal spread of local licensing frameworks for online gambling across Europe over the last 15 years has converted almost all European markets from “dot.com” to “dot.country” status as local regulators have taken up oversight of the sector.
As a result, Europe remains the epicentre of locally licensed online gambling globally, long serving as the core addressable market and base of operation for the majority of online operators and suppliers across the world.
Regulated revenue growth has been sustained by the transition of markets from grey to white, a secular shift in gambling activity from land-based to online and, within this, from desktop to mobile, as well as product innovation that has often been incubated in the region before proliferating elsewhere.
As of 2022, 27 European online gambling markets had broken through the €100m barrier in terms of annual regulated online gross gaming revenue (GGR), with eight jurisdictions — the UK, Italy, France, Germany, Sweden, Spain, the Netherlands and the Czech Republic — having now surpassed €1bn in online market size, according to VIXIO GamblingCompliance estimates.
Addressable, locally licensed online gambling revenue across Europe, excluding lottery games and the monopoly systems of Norway and Finland, is estimated to have grown at a compound annual rate of 16 percent from €11.2bn in 2026 to €27.8bn in 2022.
Estimated upside of 21.8 percent in 2020 and 20.7 percent in 2021 was boosted by a lasting acceleration in channel shift catalysed by the COVID-19 pandemic, with year-on-year growth moderating to 8.6 percent in 2022 amid the full resumption of land-based gaming operations.
2022 also marked the year in which the mostly inexorable expansion of major European online gambling markets was interrupted, with regulatory and operational headwinds contributing to a flattening of growth in France, Spain and Italy, as well as an estimated mid-single-digit decline in the mammoth UK market.
According to forecasts contained in VIXIO GamblingCompliance’s new European Online Forecasting Dashboard, overall European online growth will continue to trend in the mid-to-high-single-digits in the medium term, with regulated GGR projected to climb at a compound annual rate of 7.6 percent to €37.3bn in 2026.
Such expansion would nevertheless see Europe hold onto its status as the largest segment of the regulated online gambling sector, exceeding forecasted legal revenue of €25.7bn in North America and just below €30bn in the broader Americas region, according to VIXIO GamblingCompliance forecasts.
The belated transition of the Netherlands and Germany to fully regulated and licensed online gambling markets in 2021 has left just a small handful of countries closed off to private competition, with the mature grey market of Finland likely representing the only meaningful new “re-regulated” launch over this period.
Organic growth is meanwhile expected to remain tempered by regulatory headwinds, with the long-awaited overhaul of the UK Gambling Act set to disrupt Europe’s largest market, while alleviating some of the uncertainty that has loomed over the industry in recent years.
Wider regulatory pressure on advertising and the stringency of player protection measures are likely to further intensify amid an inflation-fuelled cost of living crisis, the effects of which are likely to provide a more direct drag on consumer expenditure and growth momentum.
Against this backdrop, the less mature Central and Eastern European region is expected to grow in prominence, accounting for a projected 16 percent of overall European online regulated GGR by 2026 versus equivalent ratios of 13 percent in 2021 and just 6 percent in 2016.
Supported by robust momentum in the Czech Republic, Romania and Croatia, where market share mostly accrues to multi-channel “local heroes” as opposed to Western European online specialists, regulated CEE online gambling revenue is forecasted to grow at a compound annual rate of 11 percent from €3.96bn in 2022 to €5.98bn by 2026.
Regulated U.S. online sports-betting and gaming gross revenue jumped by 61 percent to an estimated $12.4bn in 2022, blazing past the symbolically significant $10bn mark as the U.S. overtook the UK to become the largest regulated online gambling market in the world within four years of the repeal of the Professional and Amateur Sports Protection Act of 1992 (PASPA).
Gross revenue across 23 active online sports-betting states soared by 91 percent year-on-year to an estimated $6.9bn and, in doing so, overtook the parallel U.S. iGaming sector where GGR is estimated to have risen by 34 percent to $5.5bn across a smaller footprint of seven states.
This latest balance shift reflects the differing fortunes of the two verticals in the legislative arena, with 14 new states having launched online sports-betting operations since the start of 2020 versus an equivalent three in the iGaming arena.
The online sector’s tearaway growth has been driven by an unprecedented deluge of successful gambling expansion bills in recent years and a step change in consumer habits following the onset of COVID-19 that has been sustained amid a strong rebound in land-based casino revenue.
On the sports-betting side, strong growth in existing states such as Illinois, Tennessee and Virginia during 2022 was supported by sizeable contributions from newer online markets including Arizona, Louisiana and, most notably, New York.
The Empire State immediately dwarfed New Jersey and Illinois to become the largest state-level online sports-betting market in the U.S. after launching at the start of 2022, with full-year gross revenue in the highly taxed market rocketing to $1.36bn to surpass 2020’s overall U.S. yield of $1.14bn.
The launch of online sports betting in Maryland, Kansas and Ohio during the 2022 NFL season will be followed by an expected post-Super Bowl debut in Massachusetts, with these four states expected to collectively drive well over $1bn in incremental gross revenue during 2023.
A slowdown in legislative progress since 2021, with just three states legalizing sports betting in 2022 and an expected two to five to follow this year, means that market growth from 2024 onwards will necessarily become more organic in nature.
A lack of new markets has already constrained growth on the iGaming side, where legislative momentum has been comparatively glacial and just two additional states — Indiana and Iowa — are expected to go live over the next three to four years.
VIXIO GamblingCompliance’s newly updated medium-term legislative and market-size forecasts indicate that regulated U.S. online gambling revenue will reach $23.8bn in 2026, with online sports-betting climbing at a compound annual rate of 21 percent to $14.8bn and iGaming expanding at an equivalent CAGR of 13 percent to $9bn.
Excluded from this base case are potential online sports-betting launches in California, Florida and Texas, as well as the plausible addition of iGaming in New York, with these potential new markets, which feature in VIXIO GamblingCompliance’s U.S. bull case model, collectively representing multi-billion-dollar upside to our forecasts.
Over the border in Canada, Ontario became arguably the global online gambling industry’s most important new market upon its launch in April 2022, completing its transition from an OLG monopoly to a competitive model.
That status is chiefly a result of Ontario’s sizeable population, exceeded by just four U.S. states, and a unique but ultimately “European-style” open licensing framework for a full product suite, with 73 licences issued as of early February 2023.
The steady transition of major operators from Ontario’s grey market to the licensed sector resulted in quarterly online net revenue progressively improving from C$162m (US$121m) in the second quarter of 2022, debut figures that were widely viewed as somewhat underwhelming, to C$267m (US$200m) in Q3 and C$457m (US$342m) in Q4.
According to base case forecasts outlined in VIXIO GamblingCompliance’s Canada Online Forecasting Dashboard, overall regulated online gambling revenue across Canada will reach just under C$6bn (US$4.5bn) by 2026.
A majority C$4.5bn (US$3.3bn) of this total is expected to be generated in “re-regulated” competitive markets, with Ontario’s C$3bn+ fully regulated system predicted to be followed by the introduction of competitive sports-betting markets in Alberta, British Columbia and Manitoba over the next two to three years.
Once a relatively peripheral region within the global online gambling industry, Latin America has in recent years become elevated in strategic importance for operators and suppliers seeking opportunities for growth outside their core European markets and under a more favourable market access environment than prevails in most U.S. states.
VIXIO GamblingCompliance’s legislative and market-size forecasts indicate that locally-licensed online gambling revenue across 11 Latin American countries will reach US$4.4bn by 2026, up more than fourfold from an estimated US$830m in 2021.
Around two-thirds of this total is expected to be driven by just three markets, with Brazilian online sports-betting GGR projected to surpass US$1bn in the market’s second full year of operation under the tentative assumption of a somewhat belated H2 2024 launch.
Revenue in the maturing Mexican and Colombian online markets is meanwhile forecasted to reach US$1.2bn and US$770m respectively by 2026.
Although the continent will continue to be dwarfed by Europe and North America in market size terms for the remainder of the decade, Latin America is expected to become the fastest growing area of the global online gambling market during the first half of the decade.
Colombia has so far led the way in the region, becoming the first country to issue specific regulations for online gambling ahead of the market’s launch in 2017.
National regulator Coljuegos has since added new gaming products, including live-dealer games, to a legal online market that reached US$375m in market size during 2022 amid rampant inflation and unfavourable foreign exchange headwinds.
Indeed, when converted at the COP-USD exchange rate at the end of 2020, last year’s COP1.7bn Colombian online gambling revenue yield translates into a more sizeable U.S. dollar-denominated total of just under US$500m.
Following Colombia’s lead, Brazil legalised the operation of fixed-odds sports betting, inclusive of online betting, in late 2018 but is yet to adopt regulations needed to facilitate the commencement of a licensing process and market launch.
A statutory deadline of December 12, 2022 passed without President Jair Bolsonaro’s outgoing government implementing a regulatory framework; however, new sponsorship deals between Brazilian football clubs and operators already active in the country’s burgeoning grey market have only increased in frequency at the start of this year.
In Argentina, where gambling is regulated at the provincial level, the province and capital city of Buenos Aires each legalised online gambling through separate legal regimes towards the end of 2018. The more populous province allocated online licences to seven successful applicants at the start of 2021, with several brands having launched Buenos Aires operations last year.
International interest in the Latin American region was further stoked last year by legislative advances in Brazil, Chile and, most concretely, Peru towards legalising and licensing certain forms of online gambling.
Following the signing into law of an online gambling bill in August 2022, Peruvian online GGR is projected to reach US$360m by 2026, encouraged by a favourable open licensing regime permitting the operation of both online sports betting and casino games.
A legislative proposal to regulate online gambling in neighbouring Chile, tabled in March 2022 and under formal evaluation from the start of 2023, would offer further upside of around US$350m to the region’s addressable market by 2026 if successfully adopted this year.
Looking beyond 2023, a pending expansion bill that would legalise online casino games, as well as various forms of land-based gaming, in Brazil would meanwhile inflate the addressable online market to a far greater degree should it clear the considerable remaining hurdles required to pass into law.
Taken together as of February 2023, VIXIO GamblingCompliance’s suite of interactive Forecasting Dashboards model 12.4 percent compound annual growth in regulated online gambling revenue across Europe, North America and Latin America from US$45.1bn in 2022 to US$72.1bn in 2026.
The addressable regulated online market opportunity in Europe and the Americas is therefore projected to grow by more than 250 percent or over US$50bn in absolute terms versus its pre-pandemic level of $20.4bn in 2019.
Amid heightened regulatory scrutiny and decelerated growth momentum in its largest and most mature markets, Europe’s share of this total is estimated to slide to a still sizable 56 percent by the middle of the decade, down from 65.4 percent in 2022 and 90.5 percent in 2019.
By contrast, ongoing legislative expansion and organic growth in the United States, complemented by sizable new market launches in Ontario and Brazil, is forecasted to more than double the broader Americas regulated “Total Addressable Market (TAM)” from US$15.6bn in 2022 to US$32.5bn by 2026.
VIXIO’s new European Online Forecasting Dashboard, exclusively available on the VIXIO Data Hub, features base case market-size forecasts across 25 regulated European online markets through to 2026, illustrating for the first time how we project the total addressable European market to grow.
The latest addition expands our existing suite of interactive Forecasting Dashboards, providing users with forward-looking, proprietary and business-critical intelligence to facilitate flexible forecasting of the addressable market opportunity in all regulated and regulating online markets in Europe, North America and Latin America.
This outlook analyses the latest market size projections outlined in VIXIO’s Forecasting Dashboards, delving into the recent performance and medium-term growth catalysts of these three regions through to 2026.