People all over the world enjoy the many gambling sites available online, making this one of the most lucrative businesses present today.
Its influence on the economy is equally astounding, comprising a great portion of the revenue streams coming through the online space on a global scale.
Below, we take a look at the economic effects of online gambling and how this industry is making its mark in our world today.
A History of Online Gambling
In 1994, the Free Trade and Processing Act was passed by the country of Antigua and Barbuda. This allowed for licenses to be given to organizations who wanted to open online casinos. By the late 1990’s, online casinos had significantly gained in popularity, with over 200 sites operating and dedicated to gambling; a huge increase from 1996, when only 15 sites were available. Additionally, 1999 made way for multiplayer gambling, where people could finally chat and play together in an interactive environment.
By 2001, it was estimated that 8 million people participated in online gambling, and would continue to grow despite the legislative challenges the industry would face in the coming years. Since 2008, economists have estimated that the world revenue for online gambling totalled $21 billion, proving its stance as one of the most lucrative online businesses in today’s world.
Types of Online Gambling and How it Works
There are a wide range of gambling options catering to different types of people. This also contributes to its worldwide economic success, as it’s able to tap into the needs and preferences of a wide range of people. The economic benefits of an industry that caters to the masses needs are not just obvious, but speak to the longevity of the industry’s success.
Online gambling can come in the form of Poker, Bingo, Sports Betting, Casino Games, Lotteries and Horse Race Betting. The majority of online gambling sites also have a user friendly mobile option which makes it even easier for players to enjoy the games. Normally, players create an account on the site, upload funds to their account, and play exclusively within that site. Payments are issued via credit cards, certified checks, money orders, Bitcoin or, wire transfers.
Economic Effects – What’s the Story?
As of today, the online gambling market has a volume of $41.4 billion U.S. dollars, significantly increasing from 2010, when its volume was just under $30 billion. The statistics speak for themselves, outlining this industry’s massive economic footprint. Within these numbers lie interesting global trends that explain this incredible growth.
Steady increases in online gambling revenues since 2004
The most significant benefits of online gambling come in the form of employment and taxes. Online gambling sites employ a significant amount of people in order to build, run and maintain the sites effectively and efficiently. These sites require an extra level of maintenance in order to ensure that players have the accessibility to their gaming environments whenever they please. As gambling fans have become more reliant on the sites themselves than brick and mortar casinos, it’s imperative that these sites are functioning optimally at all times. Moreover, the credit and payment processing factor is an aspect of the online gambling transaction that contributes to necessary maintenance needs. In order to avoid fraudulent behavior, by minors or scammers, security systems must be put into place which also leads to further employment opportunities.
According to the American Gaming Association, the casino industry claimed $25 billion in total revenue and paid almost $3 billion in taxes to local governments last year. From the states where online casinos operated in 2011, casinos contributed close to $8 billion in tax revenue to the state and local governments which lead to a 5% increase, year-over-year. The money these states make by taxing gambling profits is reinvested into the economy which is beneficial for overall growth, both on the state level and on the global level. These numbers are just as obvious worldwide, with local economies growing to incredible scales due to online gambling and its presence within the world’s financial environment.
Furthermore, online gambling has proven to build communities and social networks of loyal fans. Much is debated about the economic benefit of socializing within the online gambling space but site operators are seeing that this loyalty contributes to their own longevity and word-of-mouth appeal. For instance, fans of popular bingo sites such as, LuckyCow Bingo, are loyal to the site, not only for its impeccable portfolio of games, but because the interactive nature of the experience has provided them with a community of people that they want to constantly reconnect with. It is this loyalty, as proven by many successful gambling sites that will continue to contribute to the economic health of the industry.
Online gambling sites have made their mark since their initial introduction to the online space in 1994. With players building strong interactive communities, sites are expected to stay for some time. Additionally, employment opportunities and tax benefits have greatly contributed to the global economy, making this one of the most lucrative and sought after businesses of our time. As trends outline, this economic growth is expected to expand even further as more countries will continue to experience the benefits of legalizing online gambling.
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