First Quarter Was Biggest on Record, Consultancy Says

21 May 2008

Global Betting and Gaming Consultants has said the first quarter of the 2008 calendar year was the largest on record for the Internet gambling industry.

GBGC, a financial consultancy covering the land-based and Internet gambling industries, revealed industry-wide first-quarter gross revenue of $3.8 billion, up 25 percent against the year-ago period.

The figure represents gross revenue generated by commercial betting, gaming and lottery operators, but excludes revenue generated by government-run lotteries. Including government-run lottery revenue, however, $3.8 billion rises significantly -- 18 percent to $4.5 billion.

"Our initial conclusion is that the online gambling industry will prove stronger than most, including its land-based counterpart, in the face of an economic downturn," Simon J. Holliday, a partner with the consultancy, told Interactive Gaming News.

GBGC projects that, by product category, sports betting will achieve gross revenue of $5.7 billion across 2008, rising to $7.6 billion by 2012. Bingo, Mr. Holliday said, is "the fastest-growing product category," and is expected to achieve gross revenue of $2.1 billion in 2008.

He noted that the consultancy's bingo figure now incorporates revenue generated across all relevant bingo games, which, previously, was spread across other metrics.

By market, Europe is expected to generate $8.1 billion in gross revenue this year, rising to $12.8 billion by 2012.

With regard to the United States market, Mr. Holliday said expected settlements between several operators and the Justice Department, coupled with an easing of credit conditions, will "pave the way for consolidation and the to enact permissive legislation."

With nationwide permissive legislation in place, he continued, the consultancy projects the United States market -- in total -- would be "immediately worth in excess of $10 billion in the first year and would double within a further four years."

This year, however, GBGC expects the United States market to generate gross revenue of $4.5 billion.

Concerning Asia, Mr. Holliday said the consultancy's forecasts remain conservative, but that the region is expected "to achieve the strongest growth percentage -- between 18 and 20 percent across the next five years."

"All in all it has been another encouraging quarter for the industry, with most companies posting strong sets of full-year results," he said. "The industry promises as much upside as at anytime in its history and has proven its worth in the post-UIGEA environment."

The consultancy, based in the United Kingdom, arrived at its figures by compiling data from 2,440 Internet gambling Web sites, over 500 owners and approximately 50 listed companies, Mr. Holliday said.

Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.