Juniper Research has published its third report on mobile gambling. When we reviewed the second edition in February 2005, we titled the article "Mobile Gambling - A Future Money Machine," but perhaps this very optimistic view should be adjusted.
While Juniper's 2005 report projected the combined mobile gambling handle to be $2 billion by the end of 2005, the latest report estimates handle to be just under $2 billion by the end of '06.
Bruce Gibson, the research director of Juniper Research Ltd. and the author of the mobile gambling report, nevertheless holds the opinion that "mobile gambling is still one of the most talked about mobile entertainment services and offers great potential for rapid market growth as the various barriers to market development diminish."
The present report features projections through 2011, at which time Juniper estimates the total market will be worth $23 billion. (In the second mobile gambling report, the projection was $19.3 million by 2009.) The numbers could be even larger if more liberal gambling environments are introduced in key countries, particularly in North America.
That leading m-gambling operators are scarcely willing to give away market information is a good indication that the market development is syrupy.
The bulk of technical in-house investments have been made by the top sports betting operators, which are generally more involved with cutting-edge technology.
"As with most mobile value-added data services, technology is both an enabler and a constraint," Gibson, who worked in the IT and telecom industries for over 20 years, explained. "It depends on the market you are in, and where you are within it. There is no doubt that the more sophisticated gambling services, such as complex casino games and some sports book applications, benefit tremendously from the higher bandwidth and improved handset capability that goes with 2.5G and 3G services. As the pace of deployment of these services increases around the world, the technical environment for an enjoyable mobile gambling experience for end users will become more commonplace."
Gibson points to consumer trust as another negative for the m-gambling market, although many would argue that this is not so much an issue anymore considering the well known operators that are now involved in the Internet and mobile gambling spaces.
The main mobile gambling products are casino games, lotteries, sports betting and betting exchanges. Key market drivers for mobile gambling, according to the Juniper report are: the inherent desire to gamble in some sectors of the population; rapidly advancing mobile network and handset technology; the inherent advantages of mobile communications in terms of convenience and pervasiveness; and the continued growth of the mobile communications subscriber base, particularly in the Asia Pacific region.
The most important market constraint is regulation, and linked to that is age verification. The industry is keen to prevent underage gambling, which is a significant risk because of the large base of young mobile users.