Tech

Examining how online casinos match their land-based competitors

The gambling industry has long been associated with fun and decadent abandon, but one of the themes most synonymous with the gambling industry is competition. Not the type that goes on at the tables between Russian oligarchs and American tycoons but the competition that goes on behind the scenes between companies.

In the early days of gambling and particularly in its prohibition era that competition was often meted out with ruthless violence and intimidation. Now it’s meted out with ruthless pragmatism and innovations from the gambling companies.

In this article we dissect the biggest showdown in the gambling industry at present, online casinos versus their land-based counterparts.

A brief overview

In the past century casinos have mainly faced competition and opposition from other developers and changing legislations. However in the past 2 decades a new contender has emerged – online gambling.

In the 10-year period between 1995 and 2005, technology in the online casino industry was basic to say the least. Simple 2D platforms, often with limited connectivity did nothing to worry the traditional powerhouses of the casino world.

Yet in the past 5 years the technology used by online operators has advanced almost immeasurably. Consumers are now being offered the opportunity to play in ‘live casinos’ to match the vibe of playing a real casino.

But what challenges lie ahead for the online industry and how can they claim parity if not superiority over the land-based venues?

Mimicking the traditional offering

One thing that land-based casinos have always had over their online competitors is authenticity. No matter how advanced technology becomes there is no way that an online company can match the experience of visiting an actual casino, or so we thought.

In recent years live casinos have come into the mainstream with the vast majority of companies offering them in some form or another. Players can now access a stream that takes them to a live casino table with a real dealer allowing them to interact with the dealer and also other players.

Classic 2D technology is still popular amongst online players but live streams are beginning to overtake them in participation levels. Despite the highest levels of transparency from online providers, some punters still do not trust playing against a simulated dealer.

Live casino streams mitigate these fears amongst customers and more importantly, give them a higher level of engagement. Although the technology has not quite been fine-tuned, there are plans afoot to introduce virtual reality live casinos.

If this technology is implemented well then surely there will be no need for gambling enthusiasts to even contemplate visiting land-based venues…

Expanding beyond the niche

Whilst online casinos with virtual reality technology may appeal to seasoned gamblers more than land-based resorts, they will be unlikely to win the battle for the casual gambler. Land-based resorts, particularly those in Las Vegas and Macau have much more to offer to customers than just gambling.

Enormous resorts such as The Bellagio and The Venetian are hubs for local and foreign tourists. They draw people in with their stunning architecture, quirky designs and entertainment offerings.

Some of the best restaurants in the world and the most famous performers on the planet can be found in casinos. These attractions work not just to keep guests content, but to draw in those who wouldn’t traditionally be interested in gambling.

Hundreds of thousands of British tourists head off to Las Vegas every year to visit casinos, when at home they would never think of playing online or heading to their local casino. Instead they are interested in the ‘experience’ of visiting a Las Vegas casino.

Regardless of advances in technology it is highly unlikely that online casinos will be able to match this allure. The most incredible innovations in technology would be required to offer customers immersive 5 dimensional virtual reality – something which we can’t envisage ever happening.

Who is winning the financial battle?

In the United Kingdom the battle for financial supremacy between online and offline casinos is incredibly lopsided. Traditional casinos account for just over £1 billion in annual gross gambling yields.

However online slots alone are estimated to be worth £1.8 billion a year in the United Kingdom, with the entire online industry representing £4.5 billion of the gross gambling yield.

That makes the online sector the biggest contributor to gambling yields in the country, significantly dwarfing traditional casinos.

Despite that the British market appears to be somewhat of an anomaly, with the online sector representing 11% of the market share in the United States compared to the 24% proffered by traditional casinos.

Worldwide that figure is replicated with the entire industry being estimated at around $495 billion, with well over a quarter of that coming from land-based casinos. The rest is made up by national lotteries, sports betting, land-based poker and finally online casinos.

However a big factor in that figure is global legislation that tends to favour land-based establishments rather than their online counterparts. The United Kingdom is often seen as the blueprint of how to successfully run a gambling economy and if the rest of the world mimics their approach then online casinos will eventually overtake offline ones.

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Examining how online casinos match their land-based competitors
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