Investment summary

The Online Gambling industry is affected by ongoing massive secular growth trends. These factors are among others improved living standards and more free-time, digitalization, the smartphone era and the re-regulation of the market.

Key industry drivers:

Digitalization of traditional gambling

The main driver behind the substantial growth of Online Gambling is that Landbased betting and casino experience is moving to the internet and becoming interactive. During 2017 only 22% of the total amount spent on gambling activities took place online, the room to grow is still significant. Accessibility of internet connection, low-cost computers, an increasingly vibrant online experience and conveniences drive the digitalization of gambling.

Smartphone is the next step

If Online or Interactive gambling was the first wave, then mobile gambling is the following. An increasing share of the total Online Gambling Gross Gaming Revenue (GGR) is conducted through mobiles. The rise of the smartphone has resulted in an even increased accessibility which reduces the “hurdle” to Gamble. The mobile has also lead to game developers focusing on short and fun experiences to increase the entertainment factor of gambling. We view gameification of gambling as the third “step”, all this is enabled by the mobile experience.

The search for entertainment and more free time

Just like most industries, Online Gambling benefits from that global living standard are improving. The improving living standard in many countries leads to more free time, more excess capital and an increased demand for entertainment.

Market re-regulation

For many years countries ignored the growing Online Gambling market and tried to create state monopolies. In most countries, this did not work out that well, and there is an ongoing wave of re-regulation of the European market. Re-regulation is now regarded as one of the most critical drivers of growth in the industry, and it will create opportunities for the industry innovators.

Why now?

We believe that the main secular forces behind the growth of the Online Gambling industry will continue for many years. The inevitable digitalization of traditional gambling, trends of re-regulation, mobile gambling, and gamification are the true opportunities for innovative companies as well as investors.