Investment in Gambling Startups and Innovations

Technological Advances in Gambling

According to Statista, in 2023, the industry generated $540.3 million. By 2026, this figure is expected to reach $744.8 million. The average CAGR indicator will be 6.6%.

The iGaming vertical has traditionally pulled ahead in terms of profitability and growth rates. The land-based sector also does not lose ground. The bulk of global revenue comes from large casino complexes located in Macau, Las Vegas, Atlantic City, and other metropolitan areas.

The introduction of technologies is one of the catalysts for the sector’s growth.

Innovations perform a wide range of functions:

• increase in the security of entertainment platforms;
• improvement of the user experience;
• assistance in the fight against fraud;
• automation of routine tasks, etc.

Blockchain

This is a distributed network consisting of a billion interconnected blocks. They store information about all transactions (already protected and only planned ones). Data is securely encrypted via such advanced cryptography tools as SHA-256 and Scrypt. These algorithms were previously used in the US military industry.

According to the Crypto Reporter report, in the first quarter of 2024, blockchain players spent $300 million on cryptocurrency bets. This is $63 million more than the same period in 2023.

Examples of the blockchain’s application in the gambling niche:

1. Transactions in digital tokens. This money improves the casino payment policy, making transfers faster and safer. Most often, such financial services are integrated into online casinos but there are also land-based halls that support this method. A significant advantage of cryptocurrency is the variability of settlements. It is possible to use Bitcoins, Litecoins, Thrones, Ethereums, etc.
2. Smart contracts. Blockchain can generate digital contracts that are automatically executed when specified conditions are met. The function is successfully applied in such entertainment areas as prize payouts and the accrual of bonuses. The Provably Fair option is also based on the same principle.
3. AML protection. This is the fight against money laundering and other financial crimes. The implementation of blockchain extensively protects the site and confidential data of players, creating an honest and safe environment.
4. NFT. In gambling, non-fungible tokens are presented in the form of exclusive incentives, avatars, artefacts, chips, and other valuable items. They can be collected, given as gifts, or sold on specialised exchanges.

The introduction of distributed ledger makes iGaming projects decentralised when the operator's work does not depend on several external factors, such as the state's tax policy or regulatory requirements.

Evolution was one of the first companies in the market to use this progressive technology. The provider created a personalised CryptoPunk bonus system with the awarding of NFT assets.

These are 4 collectible characters, the value of which is constantly growing. All slots of the developer with the Megaways mechanic were connected to the proprietary loyalty program.

The use of blockchain in gambling is well-regulated at the legislative level. The Isle of Man can be used as an example. The jurisdiction was one of the first to create a balanced regulatory framework and start issuing licences for crypto casinos.

Today, the Blockchain Office and Sandbox department operates on the island. It actively supports the distributed ledger sector and consults on such matters as certification and participation in government programs.

Artificial Intelligence and Machine Learning

These 2 technologies are closely related and are often used in a complex. They allow entrepreneurs to quickly collect and process huge amounts of details, as well as make informed decisions based on the data received.

How AI is Used in the Industry

Applications of innovations in gambling:

1. Improvement of the customer experience. Systems that imitate human intelligence study the player’s previous gaming sessions, views, and requests on the Internet, as well as reactions and other information. Based on the collected details, it is possible to create the most accurate portrait of the client. A casino visitor receives only the content (slots, bonuses, and tournaments) that will definitely interest them. This approach qualitatively affects conversion.
2. Automation of routine tasks. Today, operators focus on such areas as user verification, accrual of bonuses, communication with the audience, etc. The application of AI and ML simplifies all these tasks, making customer service more personalised and effective.
3. Security improvement. Artificial intelligence and machine learning help project owners fight against fraud, hacker attacks, bonus hunting, and other abuses. Solutions based on advanced technologies reveal hidden associations (for example, linked accounts) that signal multi-accounting or theft of incentives.
4. Prevention of gambling addiction. AI and ML can study and analyse the behaviour of players in dynamics, as well as record any deviation from the norm. It may indicate the loss of concentration and control over the game on the part of clients, as well as the appearance of ludomania signs.

Using the capabilities of artificial intelligence is the best way to make the casino business more personalised and safe. It simplifies routine tasks and reduces operational costs.

Experience of the World’s Leading Providers

Let us consider how industry giants benefit from AI and ML:

1. 888 Holdings. The proprietary ORBIT platform uses such tools to improve customer service. The brand’s main goal is popularisation of AI-powered chatbots, improvement of marketing campaigns, and maintenance of game integrity.
2. Entain. Its cutting-edge ARC service was introduced in 2021. The platform uses artificial intelligence to improve player safety and create a transparent gambling environment. The platform is offered in 22 international markets, including such prestigious offshore zones as Curacao, Malta, and the Isle of Man.
3. PokerStars. The vendor has created an interactive simulator to help clients develop their skills. The program analyses the history of bets and tournaments to provide personalised feedback on past rounds and bids. The simulator contains training tools.
4. Stats Perform. The company provides AI-based analytics. The proprietary solution is used to evaluate sports data and formulate wagering strategies. The product will be useful in studying the latest trends and predicting gamblers' behaviour.
5. Sportradar. The fraud detection system from a well-known company is based on AI and ML capabilities. The service specialises in monitoring and identifying suspicious betting patterns, which often indicate the organisation of fixed matches.

Virtual and Augmented Reality

According to the G2 report, the AR and VR markets are estimated at $31.12 billion. In just 2 years (from 2021 to 2023), revenues in these segments grew from $12.45 billion to $21.03 billion, demonstrating an almost two-fold increase.

The main goal of the technologies is to provide a realistic experience. Content with AR and VR elements engages the senses of players, fuels their imagination, and encourages them to return for new and unique experiences.

The most common way to implement virtual reality in the gambling niche is to create VR casinos. These platforms imitate the gameplay in land-based clubs with 360-degree coverage of what is happening with a 4K resolution.

AR is popular in virtual sports. Developers design special tracks where horse, dog races, and car races take place. Clients receive unique interactive impressions, bet money, and win.

SlotsMillion is the world's first online casino platform with VR support. The project was created by Alea Gaming and is licensed by the MGA organisation. Using a special headset, players find themselves in a 3D environment where they can walk, activate slots, and relax in a virtual bar.

NetEnt is the first developer to release a VR slot. The product, called Gonzo's Quest VR, is a continuation of the famous saga about the adventures of the Spanish conquistador.

Progressive Web Apps and 5G

PWA are hybrid entertainment solutions. They are created using web technologies and launched on different devices from a single code base. The direction has become a continuation of the rapidly developing mobile gambling.

The product’s advantages include lightness, maneuverability, hassle-free installation on devices of any type (from smartphones to consoles), and safe play. PWA combine the benefits of traditional mobile entertainment and cloud technologies, providing an interactive UX experience.

According to the Facts & Factors report, in 2023, the global market of progressive web applications was estimated at $1.1 billion. Experts predict that by 2026, the sector's turnover will reach $7.6 billion, and the average annual growth rate (CAGR) is going to be 34%.

Leading gambling corporations (Bet365, William Hill, and others) have already implemented PWA in their work, providing:

• first-class user experience;
• transactions with minimal fees;
• privacy and anonymity of data.

Experts believe that the spread of 5G will further strengthen the position of progressive web applications in the industry.

The integration of both solutions will:

• create a more dynamic landscape for mobile games;
• guarantee increased speed, lower latency, and an exciting user experience.

The Main Things about Innovations in the Entertainment Niche

Technological Advancements in the Gambling Industry

Global Gambling Industry Revenue

$540,3 million

2023

$744,8 million

2026 forecast

Compound Annual Growth Rate (CAGR)

6,6%

Blockchain in Gambling

$300 million

Player spending on crypto bets in Q1 2024

+$63 million

Growth compared to 2023

$95,05 billion

Projected blockchain market value by the end of 2024

AR and VR Market

$31,12 billion

Valuation in 2023

Nearly twofold

Growth from 2021 ($12,45 billion) to 2023 ($21,03 billion)

Innovations in the Gambling Industry

Decentralised network

Cryptocurrency Transactions

• Fast and secure transfers in Bitcoin, Litecoin, Tron, Ethereum, and other tokens

Smart Contracts

• Automatic execution of conditions, transparent payouts, and bonus systems

AML Protection

• Combating money laundering and other financial crimes

NFT

• Collectible items, avatars, and bonuses that can be sold or traded

Artificial Intelligence (AI) and Machine Learning (ML)

Enhanced User Experience

• Personalised content recommendations based on player behaviour analysis

Automation of Routine Tasks

• Fast verification, bonus allocation, and AI-powered chatbots for support

Increased Security

• Fraud detection, multi-account identification, and protection against hacking

Problem Gambling Prevention

• Monitoring player behaviour to identify signs of gambling addiction

AI Use Cases

AI-powered chatbots, marketing campaign improvements, and fair play assurance

ARC platform enhances player safety across 22 countries

Interactive simulators for skill development

AI-based analytics for sports betting

Fraud detection system for betting operations

Virtual Reality (VR) and Augmented Reality (AR)

VR Casinos

• Immersive experiences with 360-degree views in 4K resolution
• Example: SlotsMillion – the first VR casino by Alea Gaming

AR in Virtual Sports

• Interactive tracks for horse racing and car racing
• Example: NetEnt with the VR slot Gonzo's Quest VR

Progressive Web Applications (PWA) and 5G

PWA

• Hybrid solutions for various devices with a unified codebase

PWA Market

• 2023: $1,1 billion
• 2026 forecast: $7,6 billion
• CAGR: 34%

5G Integration

More dynamic mobile gambling experiences

Enhanced speed and reduced latency

Integrating innovative technologies into the gambling industry boosts market growth, enhances security, and provides personalised experiences for players

The gambling sphere is a favourable environment for the implementation of breakthrough technological solutions.

Key aspects that entrepreneurs need to take into account:

• The catalysts for the sector’s growth are blockchain, artificial intelligence, machine learning, VR, and AR. Investors also have great hopes for the popularisation of PWA applications and the development of 5G.
• Among the leaders in the implementation of innovations, we can name Bet365, Entain, 888 Holdings, William Hill, and other well-known manufacturers.

To begin a productive cooperation on attractive terms, you can contact our managers.