Back in 1994, the Free Trade and Processing Zone Act in the islands of Antigua and Barbuda licensed and granted organisations to extend their trade in the online world. Exactly 22 years later, thousands of casinos and gambling associations are open online and make their way to the homes of millions of people around the globe.

Statista, a German online statistics portal, has found that by the end of 2016, the industry will account for over US$641 trillion worth of transactions.

Technavio, a global market research company, headquartered in London, estimates in their latest report that the online gambling market in the US alone will grow by more than 51%  and exceed US$4 billion by 2020.

The report also discusses the primary market growth drivers, challenges faced by vendors and the market as a whole, and provides an overview of the key trends emerging in the market.

Though the US is portrayed to be the hub for gambling world because of the presence of popular gambling hotspots such as Las Vegas and Atlantic City, in 2015, the US was only ranked 8th in the global online gambling market, positioning itself after China, the UK, Australia, France, Italy, Germany, and Spain.

According to Technavio media and entertainment analysts, the following three factors have contributed to the growth of the online gambling market in the US:

  • Easing of government regulations
  • Scope for increased contribution to national economy
  • Wider reach of online gambling

In 2012, the US Federal government passed a law allowing individual states to license online and mobile casinos and sportsbooks and poker sites within their borders. As of 2015, only three states in the country namely Delaware, Nevada, and New Jersey allow online gambling. However, with the Federal government easing laws, another five states in the US are likely to legalise the online gambling by 2020.

From the US governments point of view, one of the main benefits of legalising online gambling is an increase in tax revenue. The money can contribute towards societal welfare through NGOs, development of hospitals, and educational institutions and importantly, legalising online gambling can create job opportunities.

“Thus, the easing of regulations on gambling serves the wider interest of the government and may be an important trend followed by various other states thereby driving the growth of the market during the forecast period,” says Ujjwal Doshi, a lead analyst at Technavio for media and entertainment services research.

In 2015, the casino segment in the US generated half a million jobs and over USD 13 billion as tax revenue. Casinos pay 25% of their earnings as tax, while the winner pays 10% of the prize money to the government, thus generating a huge income for the country.

In the US, casinos are viewed as one of the glamourous tourist destinations. Since the end of the global recession in 2010, the tourism industry in the country has grown consistently at a compound annual growth rate of 7.7%.  In addition, the US is one of the few countries where advertising of casinos is legal, so provides immense opportunity for online casino vendors to promote their business and attract tourists.

Online gambling extends the reach of the gambling games because it is web-based and does not require the physical presence of the players at the venue. The popularity of computing and mobile devices, especially among the younger generation, is the main reason for the extended reach of online gambling market in the US. Mobile ads are one of the strongest mediums of advertising, which reaches the untapped group of the population that refrain from going to a casino or a bar where betting is allowed, and influences them to try online gambling.

“In the US, the average age of an individual visiting a casino is 45 years, whereas the average age of an online gambler is 34 years. The increasing presence of younger population on the online gambling platforms will be one of the significant factors driving the growth of the market during the forecast period,” says Ujjwal.

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