Alexander Graham Bell, who in 1876 invented his "electrical speech machine," which we now know as the telephone, could never have imagined that Bell Laboratories would in 1978 begin testing a mobile telephone system based on hexagonal geographical regions called "cells."
Not long after Bell's breakthrough in the late 19th century, U.S. punters were betting with bookmakers on the blower--a legal alternative (at the time) to giving cash bets to runners on the street, which was forbidden. So perhaps when the cellular telephone system began nationwide usage in the United States in 1981, Bell Laboratories should have known that the age of mobile betting was just around the corner.
But could anyone have foreseen that the total market for mobile gambling would be worth more than US$2 billion by 2005? It's a staggering statistic, and according to Juniper Research, the figure is expected to balloon to $19.3 million by 2009.
The research firm states in its report, "White Paper - Gambling on Mobile, Second Edition," that by 2009, the Asia-Pacific region will contribute the largest share of total gross revenues at 39 percent, followed by Europe (37 percent) and North America (15 percent). The three financial "mobile pillars" at this time will be lotteries (nearly $7.9 billion), sports betting ($6.9 billion) and casino-style gambling ($4.5 billion).
The Asia-Pacific markets will lead the way, with Japan, Hong Kong, South Korea and Australia "at the forefront of the expansion." The markets in India and the Philippines will experience similar growth as 2.5G services become more prevalent among their user bases.
While the Asian and European markets thrive in the short term, Juniper predicts a similar trend of growth to follow in the United States. The firm predicts that a number of U.S. states will begin introducing wireless lotteries by 2006, with widespread adoption in the United States coming by the end of the decade.
The growth of mobile sports betting will be driven, in part, by in-game betting. Juniper states in its report, "The rapid proliferation of mobile services in Asia, combined with an increasing tolerance of sports betting (cricket is now the second most popular sport for betting, thanks primarily to Indian gamblers) should see the percentages using these services rise markedly in the medium term." To that end, researchers predict that the number of individuals placing bets via mobile phones will rise from its current level of around 4.6 million to more than 100 million by 2009.
Mobile sports betting in 2005 is valued at US$800 million, with European sports betting revenues up from $110 million now to $3 billion in 2009. Despite the regulatory constraints, 7.6 million North Americans are expected to use mobile sports betting services in 2009.
The potential for mobile casino gambling is also impressive, although Juniper cautions that "regulatory proscriptions are likely to hinder or prevent the launch of casino-style services in many countries." Restrictive policies in countries like China and the United States, therefore, will limit the growth of this segment in the short to medium term. The group also points out that the market appeal of casino-style gambling doesn't match that of lotteries, which it projects to be the largest market sector.