Traditional gambling in many developing markets has historically developed with local betting shops where customers would go to place bets on sports or lottery tickets, and occasionally gamble through low-stakes games of luck.
Those shops can be seen as physical spaces that would typically see the same customers congregate in. There was a social aspect to gambling’s local shops as those establishments play a greater role in local neighborhoods.
But like everything in life (banking, grocery shopping, and media), gambling has changed quickly, as technology has changed the entire nature of gambling.
Online outlets are replacing physical betting shops around the globe, creating obvious benefits and challenges for areas that are struggling to regulate what are rapid changes in technology.
The Shift from Street Corners to Smartphones
The first driver of this transformation is access. In the last ten years, smartphone penetration in developing parts of the world has skyrocketed. In many regions there has been much faster growth than more traditional banking or broadband network infrastructure. This means millions of users who previously had visited a physical shop can now access a gambling platform from their own device. They can install a sports betting application, access a platform for gaming, and even play online live dealer games through their local operator, typically with features tailored to the individual market.
Consider Africa. Countries like Nigeria, Kenya, and South Africa are now filled with online betting platforms that are riding a wave of passion for football and prior use of mobile payment systems like M-Pesa. What once required cash at an operator in a shop is now done in seconds through a mobile wallet. This creates the convenience of engaging with gambling that blankets the potential audience of gambling operators. It not only changes the physical location of the gambling, but also changes the culture. It is no longer a weekly trip to a shop, it is an everyday option to gamble from home, on a bus or from a football match watch party.
Opportunities and Challenges for Regulators
The accelerated rise of online gambling in developing markets brings exciting opportunities for economic growth along with governance challenges. On one hand, governments see that regulated digital platforms will generate considerable tax revenue. When operators are licensed, and transactions can be traced, gambling revenue can provide a contribution for public funds.
On the other hand, regulations have not kept pace with technology in many emerging economies. Many of these countries have gambling laws that are outdated and modelled for physical betting shops, rather than global digital platforms. This creates a grey area, in which unlicensed operators thrive. Players in these emerging markets are also exposed to risks of fraud without the player protection that regulated markets are designed to achieve.
This tension between innovation and regulation also exists in Latin America. Countries like Brazil and Mexico have debated how to regulate online casinos and sportsbooks, while Colombia has undertaken development steps in creating licensing systems where social and consumer protection are balanced with market growth. For investors and its tech entrepreneurs, these regulatory debates determine if digital gambling should be considered a business opportunity worth pursuing, or a legal maze.
The New Face of the Gambling Experience
In emerging markets, the progression of gambling is also changing the player experience beyond the development of economics and regulation. A live dealer game that streams from a studio, interactive slots that offer global jackpots, and esports betting platforms offer types of entertainment you would never get in a small corner shop.
Similarly, bonuses and promotions are now a fundamental part of online gambling. This is generally the area where the majority of international operators distinguish themselves from their local counterparts. For example, sites like CasinoBonusCA summarize all site promotions together, so players can easily shop around for the best bonuses and promotions. Emerging market players are exceptionally value sensitive and affordability conscious, so these types of offers can (and often are) decisive factors in where they choose to wager.
The pairing of smartphones and mobile payments that devices like Apple’s iPhones allow, brings opportunity for access like never before, yet also calls for a new regulatory policy to protect players and provide business opportunities.
Countries that successfully implement well-thought out regulatory policies that are transparent, fair, and enforceable, will be the ones who protect their citizens, attract investors and be at the forefront of online gambling on a global scale. The shift is already well underway, and the betting shop on the corner may soon be remembered more as a relic of the past than as the future of the industry.
